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I’ve been asked a few times to review online brokers that I think are suitable for you guys, and today is Scottrade’s turn. Scottrade is what I think of as a safe bet when shopping for a brokerage. They don’t offer all the crazy bells-and-whistles, but they do offer a solid service and a rock-solid experience.
A little background…
Scottrade is one of the original pioneers in an increasingly crowded online discount broker market. The online service was launched in 1996, although the company: Scottrade Securities was formed as far back as 1980 and is among the most established discount brokers is USA.
Scottrade has over 500 local branch offices spread throughout the US which probably accounts for the fact that Barron’s has rated it as having the best in-person service in its 17th annual review of online stock brokers. The following review contain a brief description of what investors like you might expect from this firm.
Investment Types Offered
Various investment types including stocks and options are offered to the trader. Additionally, stocks from over 20 countries are also made available to the trader. The cost of trading in most of these international stocks is just $7 per trade. Scottrade also offers an astounding number of mutual funds, with over 15,000 mutual funds, 3000 of whom have no transaction charges involved. ETF’s are also offered.
You can either choose to open a joint account with up to two other people or an individual account. There is also the option of opening up Business, Trust, education and retirement accounts. The process of opening up these accounts is also incredibly simple. A low sum of $500 is required to be deposited in order to open the account.
The absence of any maintenance or account inactivity fee is a godsend, especially for casual and novice traders. In an added incentive, Scottrade now offers to pay up to $100 to a new investor to cover for the account transfer fee charged by the previous broker.
Apply now: Open Account
Their pricing structure is very straightforward and uncomplicated. Stock Trades cost a flat $7 per trade, irrespective of the number of order size. In case the stocks are priced under $1, an additional 0.5% of the principal value will be added to the base rate of 7$. A flat rate of $7 is charged per options trade with an additional $1.25 per contract. Mutual funds cost only $17 per trade.
Great Customer Service and Support
Scottrade has over 500 local branch offices which contribute to Scottrade’s excellent customer service by making it more personalized. In addition to meeting Scottrade officials in person, you can also quickly get in touch with them through telephone, email or live chat.
Recognizing the rise of China in the world, Scottrade also provides customer support in the Chinese language.
Scottrade also has an active online community which provides a platform for investors to come together and discuss the latest market news, products and stocks/options.
Additionally Scottrade also offers comprehensive education programs to the investors who need it. These programs are completely free of charge.
Scottrade also provides its investors with great security features. The cash deposits in most Scottrade accounts get a cover of up to $1 million in FDIC insurance. Since Scottrade is a signatory of FDIC, its investors also have the option to avail of an extra $25 million protection through their insurers.
Apply now: Open Account
Great Trading Technology
Scottrade provides an above average trading platform with some great features built into it. Whether you are a frequent trader or just a novice, Scottrade provides you with customized tools in order to achieve your trading objectives.
You also get access to real time data such as charts, quotes and account balances. This can help you to actively track the performance of your portfolio.
Screening tools help you to stocks, ETF’s, mutual funds etc and find the investments that better suit your needs. They also have some great mobile apps which allow you to trade while on the move. You also get access to quality research sources and tools which enable you to be more aware of the market.
Apply now: Open Account
There are several areas where Scottrade could do with some improvement. Although some of their trading tools are really good, their platform is nothing to write home and some of their tools are pretty basic compared to brokers aimed at more advanced investors.
For example, screening tools don’t take chart patterns into account. They do have an advanced trading platform but it’s only available to those who maintain at least $25,000 in their account leaving the other traders with basic tools. In addition the stock screener is only limited to common stocks.
The Final Verdict
In conclusion, despite a few shortfalls, Scottrade is still one of the best brokers in the United States. Most reviewers around the web have given it high ratings. Their personalized customer service is a huge plus and for just $7 a stock trade, Scottrade is still a really good deal.