Are you a beginning investor looking to learn more about the stock market? Do you want a reliable online broker that is always working for your money? All of Scottrade’s clients get services from a brokerage firm with an industry-wide reputation for strength. After this Scottrade review, you'll know if this is the right online stocker broker for you.
What is Scottrade?
Scottrade is a favorite online stock broker with clients around the world. This service was created for the individual looking to grow his or her money, taking an active part in all of the decisions. They can handle complex investment situations and a range of account types.
Whether your end purpose is giving your child a better life or saving for your retirement, Scottrade has an account to suit your needs.
In their own words, Scottrade boasts, “From tools for self-directed investors to sophisticated portfolio management from Scottrade Investment Management; we have a solution for you.” Millions of clients have chosen Scottrade for their investing and money management.
How Scottrade Works
After signing up with Scottrade, there are some options available to you. This popular choice comes with a range of investment options. The services and features Scottrade offers are:
- Streaming Quotes: Real-time quotes are available for free. You can easily customize stocks you want to track.
- Trading Platform: More than anything, the Scottrade Trading Platform is easy to use. The windows are divided into Homes, My Account, Trades, and more.
- Scottrade Knowledge Center: Looking for answers? Use Scottrade’s free, helpful documents, video tutorials, web seminars, investment calculators, podcasts, and more.
- FOREX/Currency Options: You can trade foreign currency with Scottrade, but their platform works best with US stocks.
- Penny Stocks: You can buy penny stocks at a reasonable rate and the additional .05% fee.
- Mutual Funds: Diversify your portfolio with one of Scottrade’s mutual funds.
- IRAs with No Fees: No matter the type of IRA being maintained, there is no fee.
- Banking: Scottrade offers banking services as long as there are 500 dollars in equity sitting in an account held by the company.
Once logged into your account, Scottrade offers a mobile app and a convenient online site for you to check. ScottradeELITE is a platform provided for active traders that wish to analyze, identify, and measure trends or market shifts. SmartText summarizes complex information so you can understand what is important, this includes charts, sectors, and earnings.
Commissions and Fees
The underlying cost structure of Scottrade is based on a flat-fee. When you are making a stock trade for shares that are valued at more than $1 per share, the cost is $6.95 per transaction. In the case of shares valued at less than $1, the additional charge of .05% of the principal value to the commissions on the trade. When opening a new account with Scottrade, you can get up to 700 trades free or a $2,500 cash bonus if you qualify.
It is important to note Scottrade does have a complicated fee structure which charges clients for different trades. A few examples include paying $32 for a broker-assisted trade, a $50 cashless stock options processing fee, and a $121 monthly professional quote fee.
Steps to Get Started
Getting started with Scottrade is simple. All you need is a minimum amount of $2,500 for a cash account or $0 to start an IRA. They offer five ways to add money to your account and get started with the company.
These options are electronic transfer, wire fund transfer, check deposit, stock certificate deposit, and an external brokerage account transfer. The steps to get started are relatively straightforward. It takes about ten minutes to open your account, which includes the following steps:
- Enter your primary account holder information.
- Select the type of account you want to open. The options fall into several categories which include brokerage, retirement, custodial/guardian, business, and specialty. (You can get help choosing your account with this step).
- Choose an individual or a joint account.
- Enter personal information about yourself including Name, Address, and Zip Code.
- Add your employment information which covers your annual income.
- At this point, you’ll need to enter information to verify your ID.
- After registering your personal information, Scottrade requires a transfer of funds into the account and the selection of account activities. For beginners, this may require a conversation with a customer service professional.
- An alternative option to open an account is to visit a local branch for assistance.
If you have any questions about the process, contact customer service by phone or online chat during registration.
Pros and Cons of Scottrade
Perhaps the greatest advantage of working with Scottrade is the support you get from their more than 500 branch offices across the country. Many companies offer only online services, but the in-person element gives Scottrade the edge you may want in selecting a broker.
There are many positives to choosing Scottrade for all of your needs. These include:
- Offering a broad range of investment products include the traditional IRA, Roth IRA, mutual funds, ETFs, bonds, CDs, and options
- A convenient mobile app and mobile website for checking your accounts
- More than 500 branch offices to visit with account questions
- The customer service options are varied including phone assistance, web chat or email, and visiting your local brand
- Investors looking at directing their own money are given comprehensive tools to trade, manage, and work with
- Reimbursement of transfer fees when you set up an account with Scottrade
Choosing Scottrade does have its downsides which focus on many concerns:
- Usability of the platform can be difficult when the company rolls out new updates
- The costs of Scottrade exceed that of other services
- The $2,500 cash account minimum is tough for some people to manage
- When you need broker-assisted trading, the fee gets much higher
- Beginning investors may be confused by the number of options available from Scottrade
Because Scottrade is a well-known brand, customers often select this product because of its reputation. After getting acquired in 2016, Scottrade went through a few updates, but the brand has stuck to its roots. Recent customer review says, “I personally find Scottrade pretty good to deal with. I find they are very professional and knowledgeable when you call or email them and quite prompt with response time as well.”
A review by Barron’s says, “Scottrade adjusted its business model during 2015, reorganizing to include banking services along with portfolio guidance…turning its focus to guidance, building tools for long-term investors rather than frequent traders. Several never screeners have been added, along with lists of ETFs and mutual funds, which change monthly to help clients choose.”
The competition is stiff in the world of brokers and investment management. The direct competitors to Scottrade are:
- TD Ameritrade: They offer a flat fee on their trade plan, and a $0 minimum deposit but fees add up to make them a very expensive firm to work with.
- E*Trade: They have a customer-focused business, but it is easy to feel like you aren’t getting personalized service with this organization.
- Merrill Edge: Owned by Bank of America, Merrill’s costs are affordable, but it is a service best suited for Bank of America account holders.
- Optionshouse: Their flat fee is lower than Scottrade, but they have less customer service options.
Should You Get Scottrade?
When compared with the competition and all of its features are laid out, Scottrade is the right solution for you to try. The fees for trading are fair and lower than others in the industry. With Scottrade, you get access to all of your accounts in one place. After reading this Scottrade review, you've decided to join but don’t know where to start? Visit their website and reach out to them for customer service if you still have questions.