Mostly not recommended
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Scottrade is consistently one of the highest-rated brokers in the business, particularly for its customer service. Scottrade combines a powerful online platform, with an extensive network of brick-and-mortar branches that offer regular investor training seminars. It has a $0 account minimum requirement for IRA accounts (unfortunately, the minimum is high for other accounts) and well-designed education programs. Scottrade is an excellent broker for beginners and intermediate investors. More sophisticated traders will enjoy Scottrade’s advanced research tools. However, they will have to decide whether the advanced trading tools are worth the mid-range fees and commissions.
What You Will Love About Scottrade
Customer Service: This is where Scottrade stands out from the pack of full-service brokers. When you call during business hours, your call is routed to your local branch, which you can visit and speak face to face with an investment advisor.
Trading tools: Scottrade offers quality research and sophisticated data analysis tools. Scottrade has two trading platforms: ScottradeELITE and its basic platform. ScottradeELITE is a state of the art trading platform designed for active and experienced traders with advanced functionality. However, it is only available to traders with balances above $25k and who have made at least nine trades in the last three months. The good news is Scottrade’s basic online trading platform still offers enough advanced charting and data analysis features to keep most traders satisfied.
Commissions and Fees: Although Scottrade is not a discount broker, its prices are lower than most full-service brokerages. It also provides access to no-transaction-fee mutual funds.
What You’ll Miss From Scottrade
High Account Minimum: Scottrade requires investors to maintain a $2,500 balance. That may scare away some beginner investors. IRA accounts are the exception: they don’t have an account minimum.
Investment Selection: Scottrade does not offer futures, commission-free ETFs or forex trading. Not having commission-free ETFs is to be expected from discount brokers, such as OptionsHouse and TradeKing, but not with a nationwide full-service broker like Scottrade.
Options Contracts: Although Scottrade has competitive trade commissions ($7 per trade), it is on the expensive side when it comes to options trade contract fees.
Advanced trading platform: Scottrade’s advanced trading tools are only for pros. If you don’t have $25k to invest or you don’t make at least nine trades every three months, you will not be allowed to play with the big boys’ toys.
What Are Scottrade’s Fees and Commissions?
- $7 for stock trades.
- $7 for options with an additional $0.70 charge per contract
- Margin rates range from 8.25% (>$25k) to 6% (> $1 million)
- $25 for Outgoing Wire Fees (Domestic)
- $32 Brokers Assist Fee
- $17 per trade for mutual funds but it does have access to no-load, no-transaction-fee mutual funds.
(Click on the link above for a complete list of fees)
The Bottom Line
Scottrade is a great option for serious traders who can access Scottrade’s ELITE trading platform and for beginners who want top-notch customer service from an online broker with a nationwide network of branches.