Scottrade offers all the stock market basics at the lowest price compared to other online investing sites.
Scottrade is one of the most popular online investing sites with more than 2.5 million accounts. The online trading platform offers the unique feature of more than 500+ local offices to which investors can go for one-on-one help with an advisor. I have multiple accounts on other online trading websites so I thought I would check out Scottrade and compare it against the others.
Between my wife and myself, we have online investing accounts on four different websites including E*Trade, TD Ameritrade, Motif Investing and Merrill Lynch. I use the different research and features provided through each site in my freelance work as an equity analyst. Additionally, some sites are better for certain types of investing. I love my Motif Investing account for the ability to create my own funds and buy all the stocks at once though the site lacks in other features. For commission-free ETFs, it’s tough to beat the 100+ options offered on TD Ameritrade.
On my Scottrade review, I found a few things that could use improvement but overall the site wins big on fees and features that cover all the stock market basics. Scottrade offers online banking services that makes it easy to put all your finances together with bill pay and check services. Scottrade also offers one of the best selection of investing tools and calculators among online investing sites.
- 500+ local offices for personal service
- Lowest pricing for stock trades
- Easy to use retirement calculator and portfolio review tool
- Less equity research than provided on other online trading sites
- No commission-free ETFs or mutual funds
- Extended customer support hours
- Basic stock market screener
Scottrade Review of Account Facts and Fees
Scottrade offers all the stock market basics for online investing plus a few extra features. All the basic account types are available including several tax-advantaged retirement options. The basic trading commission of $7 for stocks is one of the best prices among online trading websites.
Scottrade allows investing across stocks, bonds, mutual funds and exchange traded funds, options and CDs. The interest rate on margin accounts is comparable with other online investing sites though most investors shouldn’t use margin for long-term investing.
Scottrade offers extended hours for customer service compared to other online trading sites. Phone support is live until 1am eastern on weekdays and until 7pm on weekends. Email and chat support for Scottrade is always available, a strong benefit for stock market traders outside the U.S. time zones.
Scottrade Review: Tools & Calculators for Stock Market Basics
The Scottrade retirement calculator offers a very detailed and intuitive tool to get you started on retirement investing. Understanding how much you need in retirement and your financial goals is the most important step for investors but too often neglected so it’s nice to see an online investing site that highlights the long-term view.
To use the Scottrade retirement calculator, you change options like age, amount in taxable and retirement accounts, amount you can invest annually and your risk tolerance. The calculator gives you a graphic that estimates the likelihood of your retirement money covering your needs.
The Scottrade Portfolio Review Tool is another benefit of the site and can help you develop an investing strategy more in-tune with your goals and tolerance for investing risk. The portfolio review tool will automatically link your Scottrade account but you can also link other accounts to see a larger view of your investments.
Note: I developed a couple of investment calculators that are simpler and show you more great information. Use this 401K contribution calculator to estimate your retirement income, how long to reach your goal and how much you need to contribute.
The Target Model option compares your asset allocation against pre-defined investment strategies from conservative to aggressive. The tool will compare your asset allocation against one of the models to show you how close you are to matching your investment risk tolerance and the potential to meet your investing goals.
The Portfolio Review Tool will also tell you the exposure to different areas of the market and identify common areas in your portfolio to help increase investment diversification.
The Scottrade stock market screener is fairly basic and one of the few tools I didn’t really care for on the online trading site. It includes all the stock market basics that most investors will need but leaves a little to be desired for more detailed screening. For stock screening, I haven’t found an online trading site that does better than the Morningstar premium screener though the site membership costs $200 a year.
The Scottrade screener allows for searching by company size, industry, profitability and valuation as well as several technical indicators. Most investors won’t need more than a few of these and may not even use the screener.
Another advantage of the site for new investors is the large library of videos on everything from daily analysis to tutorials on how to use the online trading platform. Scottrade videos cover stock market basics like placing an order and how to save on taxes to more detailed analysis provided by analysts. Most of the videos are fairly short, less than a few minutes, though some can be as long as half an hour.
Scottrade Review of Online Banking
The online banking option on Scottrade is inclusive and offers a few features not found on other online investing websites like E*Trade. Scottrade charges no monthly maintenance fees on multiple account types from checking, savings and money market accounts. Scottrade will send you an ATM or debit card for the account and offers online bill pay with banking.
Rates on deposited money suck at just 0.01% APR but it’s like that for traditional banks as well as online banks. Scottrade offers overdraft protection on checking accounts and is the only online trading site I’ve seen to offer Apple Pay on its accounts.
Scottrade Advantages over other Online Investing Sites
Cost is the biggest advantage I see repeated by investors using the Scottrade platform. At just $7 per trade, it beats out TDAmeritrade and E*Trade. Not having inactivity fees is a big cost benefit compared to some of the other online trading sites and the broker-assisted fee is about the same you’ll find elsewhere. I pay a lower $5 per trade fee on E*Trade only because I’ve had the account since 2001 under the Brown & Company. E*Trade is also slightly cheaper for options trading with flat-fee plus $0.75 pricing.
Extended hours on Scottrade customer service are nice though I’m not sure I would ever need to call at 1am. It’s a few hours more than other online investing sites which gives Scottrade the advantage though most sites offer great customer service quality and phone support hours.
Scottrade has a mobile app that is popular with investors. I invest almost exclusively from my home office but like the functionality on the mobile app. The app has integrated bill pay to schedule payments and set reminders. The trading side of the app is a little basic but most investors are not going to be trading on their phone anyway.
Probably the biggest advantage Scottrade has over other online investing sites is its local service with 500+ branches. I’ve been to Scottrade offices in Chicago and Miami and was surprised at the level of service offered with an online trading platform. Being able to go to a local office and speak with a professional is a nice touch and helpful for some of the more detailed financial planning you want to do.
Scottrade Review of Complaints and Disadvantages
I had a few complaints about Scottrade compared to other online investing sites. Scottrade doesn’t offer any commission-free ETFs for investing. E*Trade offers more than 50 ETFs through WisdomTree and Global X Funds that you can buy without a commission. They are not always the most liquid ETFs in a theme but it’s nice to have the option. TD Ameritrade also offers more than 100+ commission-free ETFs to choose from.
Scottrade also only offers research from Standard & Poor’s for stock research. I get research from S&P and Credit Suisse on my E*Trade account and my Merrill Lynch account includes Morningstar research. I use the research quite a bit in my job as an equity analyst though most investors probably won’t need as much. S&P provides all the stock market basics as well as a great overall review of the business for each stock they cover so it is usually more than enough research for regular investors.
While Scottrade requires no minimum balance on retirement accounts, the minimum $2,500 for non-retirement accounts is higher than on other online investing sites. It really doesn’t matter for most investors since you should have more than $2,500 in your account within a year of regular deposits. It would only be a problem for those looking to open a Scottrade account if they haven’t yet saved enough money.
Scottrade Review Summary
There’s a reason more than 2.5 million people have opened an account on Scottrade. The online trading site offers some of the best pricing and lots of features for basic investors. While the site might not be enough for investors looking for trading tools, it offers all the stock market basics that a long-term investor will need. I prefer my E*Trade account for the additional research but Scottrade wins out on price and investing tools for basic investors.
- Scottrade fees are lower than most online trading websites and there are no hidden fees to pay
- Scottrade has more than 500+ local offices to provide one-on-one personal support
- Scottrade tools & calculators are detailed and easy to use
- Online banking offers everything you get from a traditional bank plus mobile features
- Research is limited to Standard & Poor’s and it would be nice to see more independent research providers added
- There are no commission-free ETFs offered for investment