Scottrade — one of NerdWallet’s picks for the best IRA account providers — is known for its strong customer service. The broker appeals to beginner investors by offering no account minimum for IRAs, mid-range commissions and a wide network of branches, so customers can visit a representative in person to ask account questions or attend a live investor education seminar.
Scottrade is best for:
- Beginner investors
- IRA investors
- Investors who prioritize customer service
- Infrequent traders
Get up to a $2,000 cash bonus if you open a new account or fund an existing account ($2,000 on deposits of $1,000,000+; $1,000 on $500,000 to $999,999; $600 on $200,000 to $499,999; $300 on $100,000 to $199,999; and $100 on $50,000 to $99,999).
Scottrade at a glance
|Account minimum||$0 for IRAs; $2,500 for brokerage accounts|
|Account fees||$75 outgoing transfer fee|
|Mutual funds||Over 2,500 no-transaction-fee mutual funds|
|Options||$7 + $1.25/contract|
|Research and data||Free|
|Customer service||Phone support weekdays 6 a.m. to 1 a.m. ET,
Saturday and Sunday 9 a.m. to 7 p.m. ET;
email support and live chat; 500 local branches.
Where Scottrade shines
Low costs: Scottrade’s $7 stock and ETF trade commissions put it between fellow full-service brokers like TD Ameritrade and E-trade and discount brokers like OptionsHouse and TradeKing. The company offers a large selection of commission-free mutual funds, but has no commission-free ETFs. Scottrade also has low account fees, with no inactivity or annual account service charges, and very competitive mutual fund trade fees of $17.
Customer service: This is part of the company’s secret sauce. Scottrade is consistently given high marks for customer service, in large part due to its 500-branch network, which is the largest among online brokers. Customers can speak to an investment advisor in person and attend local investor-education events. The company’s phone system automatically routes callers to their local branch during business hours. Scottrade also has an extensive online education center, with live webinars, videos and articles.
Trade platforms and tools: One of Scottrade’s platforms, ScottradeELITE, is available only to customers with balances of $25,000 or more who have placed nine or more trades in the past three months. That desktop platform, designed for active traders, was revamped in 2014 with much stronger functionality and a better user experience.
Other customers can place trades through Scottrade’s online trading platform, or Scottrader Streaming Quotes, which has no balance or trade requirements. It offers a good number of features for a basic platform, including customization, advanced charting with 30 technical indicators, watch lists and, of course, streaming quotes and live news updates.
Scottrade also announced a partnership with Interactive Brokers this year that allows customers to trade complex options and create advanced orders. The partnership also brought enhanced options analytics tools to Scottrade.
Mobile apps: Scottrade’s mobile apps are well-designed and fairly advanced, allowing customers to place trades, monitor market performance with watch lists and — on some platforms — access research. Apps are available for iPhone, iPad and Android.
Account minimum: Scottrade doesn’t have a minimum for IRA accounts, which makes it ideal for beginner investors. Brokerage accounts do impose a $2,500 minimum investment.
Where Scottrade falls short
Limited investment selection: A lack of commission-free ETFs isn’t unusual for an online broker, but it’s worth pointing out because those are a popular vehicle for beginner investors and IRA account holders. The company also doesn’t offer futures trading or Forex trading.
Access to ScottradeELITE: Again, having an advanced trading platform that is out of reach for some customers isn’t uncommon. However, customers who want a professional-level trading platform and can’t meet Scottrade’s minimums might prefer TD Ameritrade, despite its higher commissions.
Data breach: The company learned of a data breach in 2015, with up to 4.6 million customers possibly affected. It quickly moved to remedy the situation and — as is now the norm after a data breach — extended free credit monitoring services to all potentially affected customers. The breach was thought to be limited to customer contact information rather than more sensitive data such as Social Security numbers. There’s no reason to believe that Scottrade is any less secure than any other online broker, but customers should be aware of this history.
The bottom line
The kind of hand-holding offered by Scottrade through its branch network can be comforting for beginner investors, who can also benefit from the company’s $0 IRA minimum and reasonable commissions. Active or advanced traders may want wider investment options and more advanced tools and research.