Scottrade Review

A Scottrade review is something I’ve been meaning to do after seeing the online brokerage rank pretty high in the SmartMoney survey of discount brokers.  With their competitive fees, low minimum requirements, and wide range of investment options Scottrade is an attractive option for many investors who like to manage their own portfolios.

Scottrade Fees

I’ll start off with investing fees since that’s one of the first things people usually ask about. You’ve probably already seen Scottrade’s ads online for their $7 trades, relatively low as you’d expect from a discount broker.  If you’re interested in options trading, those also run $7 plus + $1.25 per contract on all limit and market orders.  Their margin rates are competitive with the other national online brokerages.

You’ll need $500 to set up a Scottrade account ($2,000 for margin accounts) and there are no account maintenance or inactivity fees. Funding a Scottrade account is pretty flexible, with options including an ACH money transfer, a personal check, or a wire transfer. You can also transfer funds into your Scottrade account from another investment account with a different firm and they’ll reimburse your transfer fees.

Scottrade Investments

Scottrade was rated highly for their available investment products.  Using your online brokerage account you have access to stocks, options, mutual funds, ETFs, bonds, and certificates of deposit. They give you a selection of around 15,000 mutual funds (load and no-load) — 2,800 of which have no transaction fees. Scottrade also offers fixed income investments including municipal, corporate, and treasury bonds.

If you’re looking to save for education or retirement, they offer a Coverdell Education Savings Accounts (ESA) and an IRA account. There are no setup fees, annual fees, or termination fees for a Scottrade IRA.

Scottrade Customer Service

Unlike some of the other online discount brokers, Scottrade has a network of almost 500 local branches.  Personally, I don’t need to sit down with someone, I’m fine handling it all online.  However, if you like having the option of dealing with someone face to face the local branch is a nice feature.

Scottrade received four out of five stars for customer service in the broker survey so although they’re not perfect, they certainly make the effort to keep their members satisfied.  One of the things that helps them offer this level of service is that Scottrade puts an emphasis on educating their investors.

Investor Education

You may not be looking for extensive investor education, just a good place to buy stocks. However, if you are interested in learning more about investing and the markets Scottrade’s does have live webinars and on-demand webcasts for members.

They also offer local branch seminars and regional user summits that not only go over investing in general but also specific aspects of using the Scottrade platform.

Trading Security

Scottrade has been around for 30 years so they’re not a new online stock broker.  They certainly have a reputation to uphold so one of the things that they pay close attention to is your account security.  From an investment perspective, Scottrade offers $2.5 million in account protection through their membership in the Securities Investor Protection Corporation (SIPC). 

From an online perspective, Scottrade gives all their members free McAfee Security Software and suggests a security checklist to follow to protect your computer and account.  They also offer the Scottrade Online Security Guarantee, if a fraudulent trade is placed using your account they’ll reverse it at no cost to you.

Scottrade Comparison

Overall Scottrade stacks up pretty well against other online brokers.  While their $7 trades are cheaper than many other options, there are one or two discount brokers that offer lower trading fees.

Scottrade does have the lowest minimum initial deposit and has a wide selection of investment choices.  It’s also the only online stock brokerage in its class with no account closing fees or transfer fees so if you ever decide to switch to another firm it won’t cost you anything. If you want to give Scottrade a try, you can find more info here.

Ben Edwards, the founder of Money Smart Life, saved up enough to buy a Nintendo back when he was 12 years old. When he used the money to buy shares of Wal-Mart stock instead, he knew he wasn't like the other kids... His addiction to personal finance has paid off for his family and now he's helping you to afford the life that you want. Check him out on the web at Google Plus, Twitter and Facebook.

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