In 2017, Scottrade and TD Ameritrade will be merging into one company. It’s believed that after the merger is completed in October, all Scottrade accounts will migrate to TD Ameritrade. We love TD Ameritrade, so don’t worry! Check out our TD Ameritrade review here.
Founded in 1980, Scottrade has a reputation for being one of the best brokerage firms in the industry. It was a pioneer in low fees, with $7 trades being a mainstay of it’s marketing campaigns.
There are many features that set Scottrade apart from the competition, including its approximately 500 branch offices located in the United States. Furthermore, it provides services to customers in other parts of the world (something that many competitors don’t offer).
While many companies only provide online services, Scottrade adds a level of personal service through its branch offices. For the sake of this review, we are going to focus on its online business:
Some of Scottrade’s many online platforms include:
- Scottrade Trading Web Site
- ScottradeELITE Advanced Trading Platform
- Scottrade OptionsFirst
- Scottrade Streaming Quotes
- Scottrade Mobile Website
- Scottrade Mobile Application
Over the years, Scottrade has received numerous awards. For example, in 2008 it was ranked number one in investor satisfaction by J.D. Power and Associates. Despite the fact that the competition has heated up, the company has remained one of the top in the industry thanks to its dedication to detail, customer service, and staying current with trends.
An Introduction to Scottrade
You have seen the Scottrade commercials. You have come across its advertisements online. Maybe you have even experimented with the service at some point.
Overall, Scottrade has built a strong reputation for providing self-direct investors with the tools they need to trade, invest, and manage their accounts. Every tool provided by the company is meant to help the investor succeed.
As you will see on the homepage, Scottrade doesn’t come up short in the “information department.” If you are visiting for the first time, there is a good chance you will find exactly what you want at first glance. It doesn’t matter if you want to learn more about Scottrade or are already using the service, this is your jumping off point.
If you are ready to start, you can click on the “open a new account” box. For those seeking more information, such as a comparison between Scottrade and other services, you can access this data from the homepage as well.
Why is this important? Simply put, the company is not trying to hide anything. Every bit of information you need is right at your fingertips. And when it comes to your money, there is nothing more important than that. You need to feel confident in the service you use to invest.
Scottrade vs. the Competition
You can spend a lot of your own time comparing Scottrade to the competition. In fact, this is a good idea. You want to see what else is out there before you make a final decision as to which service deserves your business. We do it too – you can check out the competition (including the promos each major company is offering) on our tool: Online Broker Comparison Tool.
However, Scottrade does its part in making this easier on you. The following screenshot is a basic comparison provided by the company, showing how it stacks up against some of the top competitors, such as: ETrade, TD Ameritrade, Charles Schwab, and Fidelity.
It goes without saying that Scottrade is only sharing the information that makes it look good when compared to the competition. Even so, this chart proves that the service is on par with the rest of the industry, even taking top honors in some key categories.
What Does it Cost to Invest?
This is the big question for most investors. They don’t want to sign up for a trading account until they know exactly how much it will set them back.
With Scottrade, online trades are set at a flat $7. When compared to others, such as a $9.99 fee at TD Ameritrade, this is a steal.
Pricing for options is set at $7 + $1.25 per contract. This isn’t the lowest price, but it is not the highest either.
There is no account maintenance fee, meaning you won’t be charged for opening an account or if you don’t make a particular number of investments. For “on and off” investors, this is a benefit.
One area in which Scottrade lags the competition is its minimum initial deposit (more on this later). If you are interested in opening a trading account, you are required to start with at least $2,500. This is equal to some key competitors, but far more than others. And this is a big change from the past. Scottrade didn’t have this minimum until 2015, so investors who’ve know the company for a long time (including myself) have trouble with this.
The primary issue with the high minimum initial deposit is that beginners may not have the funds to meet this threshold. Subsequently, Scottrade is losing business.
Customize your Trading Site
Have you ever used a website that simply doesn’t match up with your wants and needs? Scottrade knows where you are coming from, and that is why the company rolled out a feature that allows you to customize your personal trading site.
When creating your trading page, you can customize every aspect of your experience. Your trading style is unique. The information you are interested in may not be the same as every other investor. Scottrade allows you to create a home page with the tools that best suit your style. Some of the features to pay attention to include: drag and drop arrangement, the option to create up to three custom pages, and ease of restoring the default page.
It is this type of attention to detail that shows why Scottrade has been able to achieve so much success in the online trading industry. Almost every other company forces you to use your account as they see fit. This is not the case with Scottrade.
More than One Way to Fund your Account
If you can’t fund your account, you can’t use your account. Scottrade provides five unique ways to add money for investing. These include:
- Electronic transfer
- External brokerage account transfer
- Wire fund transfer
- Check deposit
- Stock certificate deposit
Here is what the team at Scottrade had to say about this:
“There are five easy ways to fund your account at Scottrade, making it simple to start off on the right foot and begin planning your next financial move.”
When an online trading platform forces you to deposit in a particular manner, it can quickly turn the experience sour (while also slowing you down). Scottrade has taken the time to setup five deposit methods, ensuring that every investor is able to quickly and efficiently add funds to his or her account.
Each of these five options has pros and cons. For example, a wire fund transfer is typically among the fastest option, with same day delivery of your funds. If you are in a hurry to invest – maybe because you have your eye on a killer stock at a bargain price – you don’t want to wait around.
However, what they don’t tell you is that Scottrade makes it very difficult to withdraw money from your account. Very difficult. They only offer wire transfers and a check from your account. That doesn’t sound too bad, right? Well, wire transfers cost money, and if you want a check, you have to go into your local office or call a broker – you can’t do it online. I don’t know if this is supposed to be some type of “retention” check, but it makes it a big pain in the butt.
Variety of Investment Products
There is more to investing for the future than throwing your money in the stock market and hoping for an above average return. You want your money to work for you. You want to invest your money in the appropriate type of account.
Some companies, such as Loyal3, don’t provide a variety of investment products. Sure, they allow you to invest in the stock market, but that is the end all.
With Scottrade, you can do more than that. Some of its most popular products include:
- Traditional IRA
- Roth IRA
- SEP IRA
- Mutual Funds
- Certificates of Deposit (CD)
Don’t know what type of account to get? Check out our retirement account guide to find out.
There are times when you want to invest your money in the stock market. There are also times when your cash is better off in another investment vehicle, such as a retirement account or product with less risk.
Opening an account with more than one service can be time consuming, challenging, and costly. With Scottrade, there is no need for this. There is a product for everybody, regardless of financial goals.
It may sound harsh, but there is no place in today’s investing industry for a company that doesn’t have top of the line mobile applications. People are busier than ever before, but this doesn’t mean their financial goals come to a halt.
Hands down, Scottrade is a leader when it comes to mobile applications.
Through Scottrade Mobile, you have access to stock research, trading tools, and your account from anywhere in the world. You can place a trade from your bathtub. You can research an IPO from the subway or bus.
The Scottrade Mobile iPhone app, for example, is one of the company’s most popular mobile solutions. Getting started and using the app is simple:
- Log in with your four digit Passkey
- Trade securities
- Monitor performance
- Transfer funds
- Pay bills (if necessary)
Best yet, you don’t have to be on your desktop or laptop to take advantage.
In addition to the iPhone app, Scottrade also provides an iPad app, Android app, and mobile trading website.
This is one area where Robinhood really needs to figure itself out.
Scottrade Customer Service: Good or Bad?
If we have said it once, we have said it a thousand times: you don’t want to invest your money with a service that doesn’t care about you as a customer.
You are putting your trust in your online investing platform. For this reason, you deserve access to the best customer service. Scottrade doesn’t disappoint.
There are many ways to get in touch with a Scottrade customer service rep. While phone service has been and always will be among the most popular options, many people are opting for live chat. You don’t have to wait on hold. You don’t even have to pick up your phone. Instead, you can connect with a representative via your computer in real time.
Note: Scottrade live chat customer service is available Monday to Friday: 7 a.m. to 1 a.m. ET and Saturday and Sunday: 9 a.m. to 9 p.m. ET. Some companies only provide chat services during regular business hours, Monday through Friday.
What’s Wrong with Scottrade?
The benefits of Scottrade cannot be denied, but it is far from a perfect service. Let’s examine some of the areas in which the company needs to improve:
- Minimum initial deposit of $2,500. We mentioned this above, but it is worth touching on again. Scottrade is pricing itself out of a large market. There are many people, such as new college graduates, who are just getting started with investing and trading. They don’t have $2,500, which forces them to consider another provider.
- Difficult process to withdraw your money from Scottrade if you want to.
- Lack of futures trading.
- High broker assisted fee.
- Too many options to choose from. This isn’t a bad thing for investors who know what they want, how to get it, and where to get started. For those who are new to online trading, it can cause a bit of confusion. Beginners may find themselves asking: which product is best for me?
All in all, the benefits of Scottrade far outweigh any disadvantages. There are things the company could do better, such as lowering its minimum initial deposit, but overall there isn’t much to scare users away.
If you are interested in giving Scottrade a try, the registration process is simple, straight forward, and fast.
As long as you have the $2,500 required to open an account, it won’t be long before you are customizing your trading page, learning more about a variety of products, and tracking your investments.
For more than 35 years, the Scottrade name has stood for quality, reliable service. With a powerful and advanced online system, there is no reason to believe that this won’t hold true well into the future.
As a result, we give Scottrade 4 out of 5 stars. We really love their platform and their fees. We dislike their high minimum account requirement and the pain in the butt process to withdraw money from their platform.
Not sold on Scottrade? Check out our reviews and the promos for all of the other major online brokers.