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Posted By Jim On 07/15/2009 @ 4:00 pm In Investing | 37 Comments
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.
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.
One of the nice things about Scottrade is that they are very inexpensive when it comes to fees. There are no:
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!
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.
Have you used Scottrade? If so, what is your opinion of them?
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 For years, I’ve heard good things about Scottrade: http://www.bargaineering.com/articles/r/scottrade.php?tag=ScottradeReview
 defending Scottrade in this guest post: http://www.bargaineering.com/articles/online-brokerage-comparison-i-gave-up-on-scottrade.html
 E*Trade: http://www.bargaineering.com/articles/r/etrade-ira.php?tag=ScottradeReview
 best options brokers: http://www.bargaineering.com/articles/best-options-broker-review.html
 transfer out fees: http://www.bargaineering.com/articles/beware-broker-transfer-out-fees.html
Thank you for reading!