One of the most well-known online brokers in the United States is Scottrade®. This brokerage firm offers you the opportunity to trade stocks, bonds, mutual funds, ETFs, and options fairly quickly and easily. It has an array of free tools for the do-it-yourself investor, and also provides you with a low-cost trading experience. On top of that, you can find face-to-face support at one of Scottrade’s 500 branch locations around the U.S.
Types of Accounts Offered
You can open an account fairly easily. It takes about 10 minutes to open an account online if you have all of your information readily available. It is important to note, though, that you will need $2500 as a minimum opening deposit in order to get started. If you want to trade options, the minimum deposit is $2000 that can be either in cash or in negotiable securities for a margin account.
Once you get through the preliminaries, you can choose what type of account to open. There are 5 types of accounts you can open at Scottrade:
- Individual: A basic brokerage account for an individual to buy and sell stocks.
- Joint: Up to three people can manage a joint account. This is an option if you want to have an account with a spouse, or with someone else that you trust.
- Business: If you want to open a trading account on behalf of a business, it’s possible with Scottrade. You can open an account for a corporation, LLC, or partnership. It’s also worth noting that an investment club account can be opened as a business trading account.
- Trust: It’s also possible to open an investing account on behalf of a trust. There are four trust account options with Scottrade: PSP, MPP, Keogh, and Regular.
- IRA: You can also open a retirement account plan. Various types of Individual Retirement Account are offered, including Traditional, Roth, SIMPLE, SEP, and Rollover.
You can open different accounts at Scottrade to fit your needs. Carefully consider your options before opening an account.
Fees and Costs
With any online brokerage, you are going to have costs to pay. Scottrade, however, has fairly low fees in general. The cost for trading stocks and ETFs is $7 per transaction. This price also includes many foreign stocks available for trade with Scottrade. With options, the cost is $7 + $1.25. Also, the brokerage offers close to 3,000 funds that come with no transaction fee (other funds cost $17 to trade). There are different fees and minimums associated with fixed income investments like CDs, bonds, and UITs.
Realize that those are the fees associated with online transaction costs. If you use the touchtone phone system to make trades, you will pay more. It will cost you even more to use broker assisted trades. So, it is in your best interest to understand how to make trades online, including online trades with the help of Scottrade’s great smart phone app.
Additionally, you never have to pay a monthly fee, or a fee associated with account inactivity. Trade as much or as little as you like. On top of that, you can avoid paying transfer fees and account closing fees. If you move $10,000 from another account into a Scottrade account, you can be reimbursed up to $100 for the fees incurred with another broker in the transfer process. This is Scottrade’s way of encouraging investors to perform rollovers.
Other Features
Scottrade offers some helpful trading tools for the average trader. Scottrade Mobile works with your smart phone to allow you to trade on the go. As long as you have a Scottrade account, and a smart phone, you can use it to trade on the go — provided you have Internet access. This is a nice touch for active traders who want to access the trading platform from anywhere. Any Internet-enable phone can be used to access Scottrade Mobile.
Additionally, it is possible to access Scottrade’s free streaming charts. There are no trade requirements, so you can get real time information about investments. On top of that, you can receive real time market announcements and news. There is also some great educational content on their web site. There is a trading dictionary that offers great reference points, as well as articles on the basics of trading, and webcasts on a variety of subjects. Beginners can find solid information, and advanced traders can look for interesting techniques and ideas they may not have thought of before.
Scottrade does offer an advanced trading platform, called ScottradeELITE, that is fully customizable. It can allow you to trade right from your desktop. However, in order to get access to this platform, you need to have at least $25,000 in your investment account. ScottradeELITE is a powerful trading tool that offers an advance stock screener, as well as trade ideas and other perks. For those with larger account balances, it is possible to access this tool and customize it to fit your needs.
Bottom Line
Scottrade is one of the most trusted names in online brokers. It is easy to use, and offers a range of basic investment options. For traders more interested in stocks, mutual funds (especially the fee-free options) and ETFs, Scottrade is a solid investing choice. However, if you want more advanced options, you will have to look elsewhere. Scottrade’s offerings are very basic, and the options contracts are a little pricier than some of the options trading you can do at other web sites.
However, Scottrade does offer some good research tools, and it offers great information, including free streaming. The mobile app is also useful. An account is easy and fast to open, and the trade costs are competitive with other online brokers. Additionally, Scottrade offers the advantage of having a number of brick and mortar branches, as well as good phone support — as long as you are willing to pay. For the do-it-yourself investor that isn’t interested in anything particularly fancy, Scottrade is a great choice that provides adequate opportunities, and that can help you keep some of your transaction fees and other costs down.
