- Review: Scottrade
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What Is Scottrade?
Scottrade got its name from its city of origin, Scottsdale, Arizona. The year was 1980, and online stock trading was still years away. Scottrade, then known as Scottsdale Securities, started by slowly building a network of brick-and-mortar branches.
The corporate headquarters for Scottrade is now centered in St. Louis, but to this day Scottrade keeps true to its “offline” origins by maintaining 500+ branch offices located throughout the United States. This is much higher number of brick-and-mortar stores than any other online discount stock broker. That said, Scottrade is very much a product of the ’90s “dot-com bubble,” albeit a successful survivor of that era.
You are probably familiar with Scottrade because of their rock-bottom prices. Scottrade charges $7 per online stock trade, an amount considered low even back in 1998, when Scottrade charged the exact same amount! $7 per online stock trade. *(See footnote.)
|Options Trades||$7 + $0.70/contract|
|Mutual Funds||$0 – $35|
|Accounts Available||Traditional IRA, Roth IRA, SEP IRA, SIMPLE IRA, 401(k), Custodial, Coverdell, Keogh, Trust, Individual and Trust|
|Mobile App||Yes — Apple iOS and Google Android|
|Customer Service||Phone, Live Chat and Email|
Fees and transaction costs — There are no account fees and no inactivity fees for a Scottrade account. Transaction costs are as follows:
- Stocks and ETFs: $7 per trade
- Options: $7 + $0.70 per contract
- Mutual Funds:
- No-Load, No-Transaction Fee (NTF): No Fee to buy or sell
- No-Load: $17 per trade
- Load: No Fee to buy, $17 to sell
- Listed Corporate Bonds: $35 + $3 per bond (minimum $1,000 increments)
Funds offered — With Scottrade you can trade in more than 14,000 funds.
Account protection — Cash balances, including your Scottrade Bank account are covered by FDIC insurance for up to $250,000 per depositor. SIPC protection is provided on account balances up to $500,000 in cash and securities, including up to $250,000 in cash.
In addition, Scottrade provides supplemental SIPC insurance in excess of regular SIPC limits, for up to $24.5 million, including up to $900,000 in cash claims. This coverage is subject to certain conditions.
Clearing agency — Scottrade is “self-clearing.”
Minimum deposit to open an account — $2,500 on regular investment accounts, but there are no minimums for IRA accounts.
How Does Scottrade Work?
ScottradeELITE — This is the most advanced trading platform Scottrade offers. It is continually updated to make sure you get the latest technology and the best available insight into the market. With cutting-edge generation tools, it is designed to help give you a trading advantage.
ScottradePRO — Available for web, desktop and mobile platforms, ScottradePRO provides you with multi-leg option trading, advanced analytics, risk management tools, in-depth option chains and dedicated professional support.
Trading options online — Scottrade provides option trading tools and comprehensive online education to help you, regardless of your investment and trading experience level. Options can be traded from any Scottrade platform.
Free portfolio review — Not only will Scottrade review your portfolio, they’ll do it on a one-on-one basis. The review includes discussing your goals and a review of all of your investments, including those you hold at other brokers. They will also make suggestions to help you reach your goals.
Choose your own level of investment support — You can fly completely solo with self-directed investing, or you can choose from several levels of support. For example, there are levels that will provide support assistance to help your self-directed efforts, but direct investment management is also available, should you choose to go that way.
Online banking — You can bank where you invest. Online banking comes with a debit card, ApplePay, online deposits and online bill pay. And on top of all of that, there are no monthly fees. It is also fully integrated with the Scottrade Mobile App.
Scottrade Mobile App
Scottrade offers its Mobile App for iPhone, iPad and Android through its mobile trading site, m.scottrade.com. It matches the Scottrade website platform. You can place trades and access market and investment research from any Internet-enabled mobile device, or quickly transfer money between your Scottrade brokerage and bank accounts.
Scottrade offers inexpensive prices, but you can find cheaper prices without looking too hard. That said, you have to appreciate the consistency of Scottade’s pricing.
Scottrade has cool online tools, but even Capital One Investing navigation system might be slightly better. Overall, however, if you want a nice, dependable firm and a place where you can invest your money with as little hassle as possible, then Scottrade might be the place for you.
Rating: Four stars out of five. Scottrade offers comprehensive online investment and trading services at reasonable prices. Transaction costs however are at about the middle range for large, online brokers, and the minimum initial deposit of $2,500 could be an obstacle for new investors.
Footnote: This price applies to online unlimited stock purchases of over $1.00 per share. Please note that a $1.25 contract price may apply as well. Please also note that prices are subject to change and only you can make the proper determination as to which online stock brokerage houses, if any, are right for you and your financial goals. This is a personal review and of course you should meet with the proper financial experts prior to making such an important decision.