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Scottrade Review

Est. $7 per trade
Reviewed
July 2013
by ConsumerSearch
Scottrade

Best online broker

Pros
  • Low transaction fees
  • More than 500 branch offices
  • Good educational resources
Cons
  • No futures, Forex (foreign-currency) trading
  • No 24-hour customer service
Where to Buy
 

Bottom line

Scottrade is an award-winning broker that offers clients hundreds of branches, outstanding customer service and educational resources along with clear, modest fees. Its tools and mobile options aren't as robust as some of its competitors', but its cost structure and service make Scottrade a top choice for average investors.

Ease of use

Suited for the average investor. Scottrade is a popular online broker with low trades and a successful banking service. It ranks first in overall satisfaction in a J.D. Power and Associates survey of investors, and wins top marks from other leading publications like SmartMoney magazine and ConsumerReports.org as well as the American Association of Individual Investors. Scottrade has a clean interface and executes trades quickly as well. Experts say the tools and trading options are more basic than those of some of Scottrade's competitors (there's no mobile deposit, and you can't trade futures or Forex/foreign currency), but Scottrade's platform is easy to use and tailors data and information for its customers.

Pricing and services

$500 minimum opening; $7 trades. Scottrade has a minimum opening balance of $500, and market orders are $7. It's not the cheapest online broker out there, but it is ranked first for commissions and fees in SmartMoney's 2012 broker survey, in part because "its commission structure is bracingly clear and easy to understand." There are no maintenance or inactivity fees. In 2011, Scottrade added a well-reviewed online banking service that reimburses customers for ATM fees, and its educational resources are outstanding, according to the American Association of Individual Investors. Its mobile and other trading tools aren't the most sophisticated on the market, however; reviewers say Fidelity (Est. $8 per trade) or E*Trade (Est. $10), could be a better choice, although their costs are slightly higher.

Customer service

Hundreds of offices, seminars boost service. Scottrade offers in-person services at an unparalleled 500 branch offices, where you can go for one-on-one support. (Its phone and online support isn't available 24 hours, however.) Barron's is one of many publications ranking Scottrade top for customer service, and reports that the company held 300 seminars weekly at its offices in 2012. Kiplinger.com isn't as impressed with Scottrade's customer service; an email sent in July 2012 still hadn't been returned as of November of that year. That poor customer-service experience appears to be the exception rather than the rule, however.

Where To Buy

Our Sources

1. SmartMoney.com

Scottrade comes in second to Fidelity in SmartMoney magazine's survey, where it gets high marks in nearly every category except trading tools; commissions and fees and banking services get 5 out of 5 stars.

Review: Best and Worst Brokers of 2012, J. Alex Tarquinio, May 16, 2012

2. Barron's

Barron's ranks Scottrade best for in-person service, and reports that the company held an average of 300 seminars weekly at its offices in 2012. It gets just 3 stars overall, however, scoring low in costs, reports and range of offerings.

Review: Back Online!, Theresa W. Carey, March 9, 2013

3. J.D. Power & Associates

More than 3,600 investors who make all of their investment decisions without an investment adviser responded to J.D. Power and Associates' 2013 self-directed investor satisfaction survey. They rate firms' performance in six areas, including interaction, account information and trading charges and fees. Scottrade comes in first, with 810 out of 1,000 points (and a score of 5 out of 5), and Charles Schwab and Vanguard follow close behind.

Review: 2013 U.S. Self-Directed Investor Satisfaction Study, Editors of J.D. Power and Associates, June 17, 2013

4. ConsumerReports.org

ConsumerReports.org ranks the performance of nine discount- and four full-service brokerage firms based on a 2010-2011 survey. USAA leads the group, with Scottrade coming in second with a rating of 89 out of 100.

Review: Where to Put Your Money, Editors of ConsumerReports.org, Feb. 2012

5. Reviews.com

Scottrade gets 4 out of 5 stars from this expert reviewer, who notes that the brokerage's in-person customer service is unparalleled but that its mobile apps and trade limitations fall short of the competition.

Review: Scottrade Review, Ed Carlson, June 7, 2013

6. Kiplinger.com

Scottrade is given 3.5 out of 5 stars, and is the number 3 pick out of 10 online brokerages. It scores 4.5 out of 5 stars for user experience but just 2.5 out of 5 for research/tools. While Kiplinger.com praises its low fees, Scottrade's email customer service never returned a query.

Review: Best Online Brokers for 2012: Scottrade, Nellie S. Huang , Oct . 2012

7. AAII: The American Association of Individual Investors

Scottrade comes out on top of the American Association of Individual Investors' member survey. Not surprisingly, those surveyed marked commissions as the primary factor in choosing a broker, with services named second and convenience third.

Review: Online Discount Brokers, Joe Lan, Not Dated

8. Stockbrokers.com

StockBrokers.com gives Scottrade an award for Best Overall Client Experience and ranks the firm fourth out of 17 online brokers. Scottrade gets an overall ranking of 4 out of 5 stars, including 4.5 stars for education and, on the low end, 3 stars for platform and tools and mobile trading.

Review: Online Broker Review 2013, Blain Reinkensmeyer, Feb. 19, 2013

9. DoughRoller

Rob Berger gives his strongest endorsement to Scottrade, noting that he's personally opening up an account with the company because of its no-fee options. Scottrade is also praised for its speedy trade executions.

Review: Scottrade Review -- Online Discount Broker, Rob Berger, June 10, 2013

10. CashMoneyLife.com

This ad-driven website recommends four leading online brokers for IRAs, but mostly summarizes their fees and features without making critical comments. Scottrade is praised for its free tax management tools, discounted trades and local branches.

Review: Scottrade, OptionsHouse, and TradeMonster Review, Ryan Guina, Not Dated

Online Brokers Runners Up:

E*Trade Est. $10 per trade

7 picks including: Barron's, Kiplinger.com…

Fidelity Est. $8 per trade

6 picks including: Kiplinger.com, SmartMoney.com…

Interactive Brokers Est. $0.005 per trade

5 picks including: Barron's, Technical Analysis of Stocks & Commodities Magazine…

OptionsHouse Est. $4 per trade

5 picks including: Barron's, TopTenReviews.com…

Charles Schwab Est. $9 per trade

4 picks including: J.D. Power & Associates, Stockbrokers.com…

optionsXpress Est. $10 per trade

4 picks including: TopTenReviews.com, Reviews.com…

Vanguard Est. $7 per trade

3 picks including: J.D. Power & Associates, Yelp.com…

ShareBuilder *Est. $4 per trade (automatic investment)

2 picks including: Barron's, SmartMoney.com…

USAA Brokerage Services Est. $8.95 per trade for most traders

2 picks including: J.D. Power & Associates, ConsumerReports.org…

Lightspeed

2 picks by top review sites.

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