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Scottrade Review

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For years, I’ve heard good things about Scottrade (mostly from people defending Scottrade in this guest post) but never tried them. I mostly use E*Trade because of their high yield savings account and TradeKing because of their low commissions. Since I don’t have that much to invest, it doesn’t really benefit me to open up all these broker accounts just to put a few dollars here or there.

However, since Scottrade doesn’t have any account maintenance fees and a low minimum ($500), I thought I’d give them a look to see what the fuss was about.

Commissions

In terms of stock commissions, the rates are competitive but not the best. You’ll pay $7 for internet trades, $17 for phone system trades, and $27 for broker assisted trades. It’s not as cheap as TradeKing where it’s $4.95 for everything but it sure beats the larger brokers like TD Ameritrade or E*Trade, both of which are above $10.

Options commission are less competitive, with internet orders at $7 per trade plus $1.25 per contract. Option exercises and assignments will run you $17. By comparison, many of the best options brokers will charge you less. OptionsHouse will charge you a flat rate of $9.95 and TradeKing charges $4.95 per trade and $0.65 per contract.

One area they do excel in is in mutual funds, for no-load, no-transaction fee funds they will charge you nothing to buy and sell. For no-load funds not in the NTF program, the fee is $17 to buy or sell, cheaper than many other brokers (TD Ameritrade charges you $40!). So if you are looking to trade both, Scottrade’s favorable mutual fund commission structure might be good for you.

Fees

One of the nice things about Scottrade is that they are very inexpensive when it comes to fees. There are no:

  • Annual account maintenance
  • Inactive account
  • Transfer out/account closing
  • IRA termination
  • Online confirmations and statements
  • Dow Jones Real-Time News
  • Real-time streaming quotes and charts
  • Cost basis accounting
  • Incoming/Outgoing DRS (Direct Registration System)
  • DWAC (Direct Withdrawal at Custodian)

The two notable “no charge” services they offer are the Transfer out/account closing and the IRA termination fees (or lack thereof). Usually brokers will have transfer out fees to try to keep you from going to another broker. It’s refreshing to see them not charge you a fee to get your own money back!

Awards

For at least the last two years, J.D. Power and Associates has ranked Scottrade the “Highest in Investor Satisfaction with Self-Directed Services.” Outside of that, all of the other awards Scottrade boasts about are employer satisfaction related. While it’s great their employees are happy, it isn’t exactly relevant to us. :)

Click to Apply Today!

Have you used Scottrade? If so, what is your opinion of them?

{ 37 comments, please add your thoughts now! }

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37 Responses to “Scottrade Review”

  1. Flexo says:

    I “use” Scottrade in the sense that I have an account there. I transferred an account from Wachovia Securities (discount brokerage) a few years ago after Wachovia decided to start charging inactivity fees. No inactivity fees from Scottrade yet, so I’m still happy.

  2. freeby50 says:

    I use Scottrade. Their support has been great and they have a local office about 10 miles from my house. THeir website design isn’t the most intuitive or pretty, but it works fine. Overall I’m very satisifed with them.

    I had E*trade years ago and their support was horrible by comparison.

  3. Dylan says:

    I use Scotttrade and like them. I am a financial planner, and I’ve also recommended them to some of my clients. I’ve also heard a lot of good things back from clients too.

  4. Shawanda says:

    I’ve used Scottrade to buy and sell individual stock. I don’t recommend doing this. Now, I know better. Any way, no complaints here. It’s only $7 a trade, and you don’t have to make a minimum number of trades to get the low price. Unlike many brokers, they don’t nickel and dime you with fees.

  5. Darin says:

    I used them in the past, the only reason I switched was that they didn’t offer dividend reinvesting. I do a lot of banking with BofA so I gave their brokerage a chance and am just as satisfied with BofA as I was with Scottrade. The only issue I ever had was that they charged $25 for switching “B” shares for “A” shares when Wrigley did that stock split with B shares (annoying), and wouldn’t transfer them out – BofA has no fee for it, but I couldn’t take advantage because Scottrade wouldn’t transfer them, something about being restricted.

    So my only complaint was something that was a once in a blue moon issue. I would be happy to use Scottrade again and would recommend them.

  6. Raj says:

    Been with them for about a year now, and things work well. Haven’t used another broker, so I have nothing to compare with though.

    I think they make a great “first timers” broker because: 1) they don’t have any/many fees, including fees to transfer out if you don’t like the service, 2) they have local offices all around if you have questions/issues, and 3) they have fairly cheap rates.

  7. FinanceSavy says:

    I’ve been with Scottrade for several years and I haven’t had any complaints EXCEPT! you can’t buy/sell stocks under $1. When some of the big named stocks took a dive I couldn’t buy them through Scottrade. I was quite bummed and disappointed the first time I submit my order and it gave me a very vague error message.

    • Amber says:

      We do allow the buying and selling of stocks under $1. When buying a stock under $1, it should be placed as a limit order, not a market order. If you have any additional questions feel free to contact your local branch at 800-619-7283. They are always happy to answer any questions you have. Regards, Amber – Scottrade Online PR Specialist

    • Paul says:

      Sometimes, when there’s a lot of volatility with a stock, I can’t buy it through their website. I’m instructed to call a broker for assistance.

      Other than that, Scottrade is my friend.

  8. pfmoron says:

    I’ve been a satisfied Scottrade customer for years but my two biggest problems with them are:
    1. No Dividend Reinvestment
    2. Very Poor rates of return on uninvested cash balances.

    I still have an assortment of IRAs with Scottrade but we have recently opened an account with Charles Schwab for our taxable investment account with a linked high-yield savings account.

  9. Maryanne says:

    I recently left Scottrade after having an account there for about 10 years – the reasons? same as pfmoron. They do not allow dividend reinvestment. I think it’s so they can glom another $7 when you buy stocks with your dividends. Also, as I said, I agree with pfmoron, when your dividends are sitting unused in their cash accounts, they pay NOTHING at all for the privilege.

  10. Rachel says:

    My husband has a Scottrade account and didn’t have a complaint until yesterday. He got a phone call from them because one of his CDs was in a California bank that went out last weekend. The deposit was sizable, but in line with FDIC insurance, so we will get it back. But when you are giving a customer that kind of news, flip and obnoxious aren’t the kinds of tones you want to get from the person speaking to you. “I have some bad news and some good news” is a juvenile way to handle a phone call regarding tens of thousands of dollars. My husband is usually a good natured kind of guy, but in this case, he was not amused.

    • Chris says:

      I have to say I am not surprised about your experience with Scottrade.

      Last week they suddenly closed my account without explaining why or notifying me in advance. When I called the person handling the account he couldn’t tell me why. He then put me on the phone with another person that was extremely rude but couldn’t tell me why my account was closed either. All he said was they have the right to close any account after coming to a decision to do so. When asked what I did to bring about the decision he continued to say things like “the committee came to a decision”. He rudely said the decision wouldn’t be reversed and I couldn’t speak to a manager after asking to do so several times. I told him the way the entire situation was handled was very unprofessional but he didn’t care!

      It looks like I will bring my business elsewhere but I am very upset at how I was treated at Scottrade! The people in the office are definitely more professional than people without in-person customer contact.

  11. JohnTop says:

    switching over to Trade King. I have been with Scottrade for 3 years as I found myself learning more and becoming a more savvy investor I found Trade King to be much better with lower trades fees 4.95 a trade and only .65 per contract with options. Trade kings also has much better learning tools to help you advance, especially if you want to learn more on options. When I call Scottrade here in Charlotte they always have a I don’t care attitude about helping you advance more as a personal investor. I highley suggest Trade King if you want something better

    • Chris says:

      John- I just opened a Trade King account myself!… Unfortunately, I’m doing it out of necessity…

      I still haven’t received an answer from Scottrade regarding why they closed my account and I don’t care to keep my business with them anymore! I’m at a loss and they continue to refuse to give me an answer that makes any type of sense.

      Like you, I now feel that Scottrade doesn’t care if they have my accounts that are of decent size and are consistently growing. I suspect something is very wrong has happened at Scottrade!

      What really sucks about my Scottrade situation is I don’t know what I did wrong, they won’t tell me what I did wrong, and I can’t make any new trades until I move my accounts. I’ve lost a considerable amount of money on trades I wanted to make in December!!! I also lost a lot of time doing research on other brokerages and setting up my new Trade King account!!!

      So it looks like Trade King will get my personal account while I look for the best option for my business account. So far their customer service has been excellent as they usually respond to my emails within 2 hours. Trade King also answers their phones quickly after I call.

      Needless to say I am VERY disappointed with Scottrade!!!!!!!!!!!!!

  12. Amber says:

    John, We’re sorry to hear that you wish to close your Scottrade account. If there is anything that we can do to retain your business, please let us know as we never like to lose a valued client. When considering whether or not you wish to close your account, please keep in mind that Scottrade does not charge any maintenance, inactivity, monthly, quarterly, or annual fees. You may leave your account open with a zero balance for future funding without incurring any fees or penalties. Regarding the service you received, we’re sorry to hear that that it did not meet your expectations. We would like to hear more about your experiences. Would you e-mail more information to mediarelations (at) scottrade (dot) com?

    Kind Regards,

    Amber
    Online PR Specialist, Scottrade

  13. aua868s says:

    for a person who is like me (loves index funds and try to stick to them), Schwab seems an awesome bet…no Transaction fee on ETFs and also very low expense ratio….for those funds which have lower expense ratio in Vanguard, I got with them.

  14. John Hyndman says:

    Scottrade would not allow me to buy AMFI (Amcore Financial, Inc) today. I attempted to place a LIMIT order, in my unrestricted cash account. I received a message stating that I had to contact a branch office to place the trade. The same event occured a few weeks ago when I attempted to buy CTZN (Citizens First Bancorp, Inc.).

    The whole point of trading online is to eliminate the need of talking to the brokers representative. I use a level II quote service, and had been tracking the bid & ask until it hit my buy trigger. It was an anti-climax to say the least when I could not place the trade.

    I was in a location that prohibited the use of phones. Scottrade’s restriction prevented me from executing the trade, as I watched the price climb out of my buy range.

    I do not understand why Scottrade whould do this. It is my money, and I do not need any “big brother” help or advice to choose my trades. I would be willing to sign a waiver or anything to prevent this from happening again.

    Someone elce posted a comment that it may have somthing to do with “lot of volatility with a stock”. Well duh, that is exactly what I am looking for in a trade. Please help me fix this issue! Thank you – John from Michigan

  15. John Hyndman says:

    I just remembered one other thing: Scottrade allows me to transfer funds from my bank account, INTO my Scottrade account, but not vice-versa. If I want to pull some money out, I have to wait to get a check in the mail. Why is this?

    Even rinky-dink outfits like Sharebuilder let you move money back and forth with ease.

  16. Louie says:

    I will never use scottrade again. If there is ever a class action suit filed for scottrade freezing up at critical moments…I want in. I would advise anyone to steer clear of scottrade. I would love to see the readout of all the customers who were locked out at those times and those who werent. I wonder if a pattern would emerge? PR REP… dont bother, as Ive told the orangatan down at the local office….there is nothing you can say or do to keep me from telling everyone I can………
    DONT USE SCOTTRADE!

  17. Simeon says:

    Terrible customer service. The online part of the brokerage works OK, not great (slow) but OK. I do not ever want to deal with their people at the Towson, MD office. Every time I’ve had to deal with them it’s been a bad experience!

    • Jessica says:

      Hi Simeon,
      I am sorry to hear that you are not happy with your experience at your local branch. I understand that you have spoken with us and will be moving to a new branch office. I hope you will have a better experience at that branch and that we can work through any unresolved issues you might have. We value your business and want to provide you with quality customer service, online and in-person. Should you have any additional feedback, don’t hesitate to contact us at 800-619-7283.

      Best,
      Jessica
      Social Media Specialist, Scottrade

  18. Joe Pack says:

    Several items observed with Scottrade;
    When they decide a stock falls in price to a certain percentage, you must call the local branch office to place a limit order. This gives select gang members time to buy the stock at a lower price than you.
    There is usually a 10-15 minute hold on the call to the office? You can then speak to a nasty local branch office broker.
    When you finally get the limit order in your online streaming account window, the site will lock up.
    The Scottrade branch office managers talk to their customers with less than $1 million in account value as peons. It is not their fault, they were born that way..
    I wonder if the branch manager’ attitude would change when a smitten customer followed them and used an “on the way home” 36″ Hickory wood attitude adjuster?

    • Kris says:

      Original Reply: 08/16/2010 at 10:31 am

      Good morning, Joe. I’m sorry to hear that you are having issues with trading in your account.

      If a stock that is held in a Scottrade margin account experiences a significant intraday decrease in share price, the account may reflect inflated buying power. When this occurs, it may have to be temporarily restricted online only. These restrictions are temporary, apply to all accounts (not just margin accounts), and they don’t prevent you from selling these securities online or purchasing them at the Internet commission rate through your local Scottrade branch office.

      We would like to hear more about your issues related to the branch so they can be addressed. Would you e-mail more information to mediarelations (at) scottrade (dot) com?

      We would also be happy to troubleshoot any issues you are having with the website or Streaming Quotes (800.619.7283) with Tech Support.

      Sincerely,

      Kris
      Chat and Social Media Specialist, Scottrade

  19. David says:

    Scottrade is a joke..BUYER BEWARE. Was with them for 4 years until Scottrade could not execute a market order placed end of day and sold me out of my position first thing the next moring at a $1300 loss! I told them that this is unacceptable because I never received a warning and figured that the order expired end of the trading session but those scumbags carried it over to the next day. SCOTTRADE HAS A PROBLEM WITH THEIR TECHNOLOGY AND LATENCY CAN COST YOU $$$$$$. You get what you pay for so don’t think you are saving money with $7 trades because Scottrade can cost investors in the end.

    • Jessica says:

      Hello David,

      We’re sorry to see you go. I see that you might have an unresolved issue and we would like to look further into your situation. Please contact us at (800) 619-7283.

      Jessica
      Social Media Specialist, Scottrade Inc.

  20. Anita says:

    I opened an account with Scottrade in July 2010. Everything seemed to be fine until I relied on some information in their research area regarding a particular ADR stock issuing a special dividend. I placed a trade prior to the ex-dividend date (as published on Scottrade’s site, and in agreement with the date on the stock’s actual company site). The stock shot up a couple days later and I sold the stock.

    Dividend payment date rolls around (about a month later) and no payment appears in my account. I check Scottrade’s research area again and the company’s website and nothing’s changed. I called my Scottrade branch, wondering where my dividend was. THEY WENT TO THE NASDAQ SITE and responded to me that THE INFORMATION ON THEIR SITE was INCORRECT. (According to the NASDAQ site the ex-dividend was changed to a couple days AFTER I had sold the stock.)

    Lesson #1: Poor and inaccurate information through Scottrade’s website. Do your research elsewhere…or even on NASDAQ, where it appears Scottrade does their’s.

    After two days of phone calls between the branch office and Scottrade’s “Compliance” Department, with many flippant responses, I negotiated 10 “free” trades. That was about three weeks ago. (The story gets better….)

    So, yesterday I made a trade on an order I had had open for over a month. One would think things generally work in a first-in-first-out manner, with executed trades taking precedence over unexecuted orders. NOT with Scottrade. When the order processed with a commission charge, I ended up going through the branch and the “compliance” department for another round of excuses and subpar resolutions. According to Scottrade, the “free” trades are “attached” to orders. Because I had placed the open order before receiving the “free” trades, the order executed with a commission charge. Essentially Scottrade’s response was “too bad, so sad.”

    So, I cancelled all my open orders, so that it would appear that I was starting with a fresh page, right? Today, I placed a sell order on a stock to liquidate the entire position. Scottrade splits the sell order on execution
    and charges me TWO of my “free” trades. Then I placed a buy order good for the day. The order expired at the end of the day unexecuted. I GOT CHARGED ONE OF MY FREE TRADES.

    All I can say is that I will be using whatever “free” trades I have left (if they don’t just disappear), and even fully commissioned trades to get out of Scottrade as fast as possible. Their system and excuse for “customer service” is a joke.

    BEWARE!!!! Look elsewhere for a PROFESSIONAL brokerage service.

  21. Gail says:

    I have used Scottrade for about 4 years but am currently looking for another online broker that I like. I’ve become dissatisfied with them since they “upgraded” their website at the start of 2011. I call it a downgrade. Since then the charts have not worked properly. I havn’t really been able to use it as I would like for 3 weeks now. It has been frustrating and I’ve had to find other sites to view the charts. A real pain. They will keep telling you that they are working on it but that has become hard to believe. Either they are not telling the truth or they are not very competent.

    That is really the only issue I have with them.
    I don’t have lots of money to trade with and don’t do anything but basic stock buys and sells.

    When I first opened the account I really liked the layout of the site and it was great to use.
    Then they changed it so the charts timed out after about 20 minutes of inactivity saying it was for security. I wasn’t logged out just the charts were gone and had to be reset. Over and over again. Hmmmmm. Security?

    What they have done now it too much for me to want to deal with. Besides the site not working properly it loads too slowly on my computer and it’s not as easy to navigate. Lots of constant clicking around. It is not nice looking any longer and I can’t seem to do anything fast on it.

    They do have the streaming quotes that are nice. They are great when you want streaming qoutes but that is not usually what I need. Maybe they are not thinking of those of us who want easy to access and easy to read charts to do research and monitor out stocks.

    Also, I found a site called Glassdoor. com where employee’s leave reviews and after reading some of them I’ve lost even more confidence in Scottrade.

  22. Demetre says:

    There ok but I use googlefinance.com for viewing live charts and reading stock news. I am starting to like sharebuilder.com since you can view everything easier and actually cash out to your account easy. You can also reinvest your dividends or cash them out.

  23. notgiven says:

    I like to trade using the Scottrade elite platform. The only thing I have trouble with sometimes is trying to sell my positions when the market turns against me. Their whole platform freezes up for some odd reason and it ends up costing me big bucks. Other than that the platform works perfectly when I’m not holding any positions. Yes, I know…I should probably just go somewhere else where these problems can be avoided altogether.

  24. Jose says:

    I have been using scottrade for about 2 months now and i have made about 3000 dollars! which is about 1500 a month, its kind of like a part time job for me. However, thiers this new thing they have called scottrade smarttext and what it does is analyze stock charts for you and interprets them so you can understand them easily, which has helped me make money.

    Thanks, and Happy Trading!

  25. Chris says:

    I’ve been a long-time Scottrade customer, but as of today I will no longer be one. They refuse to accept any responsibility for software problems in their products, and are perfectly willing to leave their customers holding the proverbial bag.

    Recently, I decided to move funds into my Scottrade account to take advantage of recent sell-offs, and build good positions in stable stocks. I used Scottrade’s “Money Direct” program to make ACH transfers from my bank account to my Scottrade account. Unfortunately, Money Direct didn’t correctly validate the account, and began attempting to transfer money from an account that didn’t exist. As a result the transfers bounced from the bank, and that resulted in a negative balance. No one at Scottrade decided to tell me anything about any of this until I called them to find out why parts of my account were locked out. Only then did they decide to tell me about the bounced transfers, negative balance, AND that if I didn’t wire them money THAT day, that they would be liquidating my account. All of this has resulted in my having been assessed nearly $200 in fees (not a small thing, to a small investor), and all because their software didn’t work like it was supposed to.

    If Scottrade is going to offer a product, they need to stand behind it when it fails to work. They didn’t for me, and can only apologetically insist that they’re “simply passing along their costs.” As a result, I’m unapologetically moving my investments to another brokerage who is willing to stand behind their products and software, especially when it doesn’t work as expected.

    My advice: stay away from Scottrade.


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