When you think of online trading, two names likely come to mind first: Scottrade and E-Trade.
These companies give one another stiff competition, with comparable trading platforms, quality customer service and large investment selections. The battle will likely heat up as Scottrade is folded into TD Ameritrade, which purchased the broker last year.
- NerdWallet editor review
- Trade Commission $6.95
- Account Minimum $500
- Promotion 60 days of commission-free trades with qualifying deposit
- NerdWallet editor review
- Trade Commission $6.95
- Account Minimum $2,500
- Promotion 50 commission-free trades with deposit of $10,000 or more
Scottrade vs. E-Trade at a glance
|Stock trading costs|
$6.95 per trade
$6.95 + 70 cents per contract
$2,500; waived for IRA accounts
$500; waived for IRA accounts
|Account fees (annual, transfer, closing, inactivity)||
Multiple trading platforms for web, desktop and mobile; access to some platforms requires meeting minimum account balance and trading activity requirements
Advanced features mimic a desktop trading platform
More than 2,600 no-transaction-fee mutual funds
More than 4,400 no-transaction-fee mutual funds
Over 100 commission-free ETFs
|Research and data|
Free and extensive
|Customer support/branches|| ||
50 commission-free trades with deposit of $10,000 or more.
60 days of commission-free trades with deposit of $10,000 or more.
Fees, commissions and account minimums
Neither broker charges inactivity or annual fees. But looking at straight-up stock trading costs, E-Trade is the pretty clear winner. The company’s $6.95 commission is even with Scottrade’s, but E-Trade also offers a tiered pricing structure for high-volume traders. Investors who trade 30 or more times per quarter qualify for the $4.95 reduced trade commission and option contract fees of 50 cents.
Scottrade may be less expensive for option traders who don’t qualify for E-Trade’s active trader discount. The company charges 70 cents per contract on top of its $6.95 base commission; E-Trade charges 75 cents per contract on top of its $6.95 commission.
Winner: E-Trade. NerdWallet’s online brokerage search tool can help you estimate your potential costs based on your trading frequency.
E-Trade, which was one of our picks for best online brokers for investment selection, has a leg up here, for a few reasons. The company offers more than 100 commission-free exchange traded funds. That’s not a standout number compared with the rest of the online broker landscape, but it beats Scottrade handily, as that broker offers none.
E-Trade also offers futures trading, and Scottrade does not, and E-Trade brings 4,400 no-transaction-fee mutual funds compared with Scottrade’s selection of 2,600.
Winner: E-Trade, for its larger selection of investment options and its list of commission-free ETFs. ETF investors choosing Scottrade will pay a $6.95 commission for each trade.
Research, tools and trading platforms
Let’s get research out of the way: Both brokers offer a respectable amount, but E-Trade’s offerings come from a wider selection of sources, including Credit Suisse, S&P Capital IQ, Thomson Reuters, MarketEdge and Morningstar.
Both E-Trade and Scottrade got docked a star in the trading platform portion of our reviews because their premium platforms — read: best and most advanced — have minimum balance requirements and are reserved for high-volume traders:
- ScottradeELITE: Available for customers with balances of $25,000 or more who have placed nine or more trades in the past three months.
- E-Trade Pro: Available for customers who have at least a $250,000 balance or who execute at least 30 stock or option trades per quarter.
Of the two, E-Trade Pro will be most impressive to active traders. The platform offers robust idea-generating tools like Strategy Scanner, backtesting, a professional-level options screener and customizable charting. But ScottradeELITE isn’t far behind, and some investors may prefer it. One standout feature is Intraday Trader from Recognia, which helps investors spot trade opportunities and track and receive custom notifications about technical events.
E-Trade also has a quality web trading platform, with free streaming data and real-time quotes and the ability to trade complex options right from the site. Then there’s the company’s mobile app. Perhaps the best available from any online broker, the app includes advanced features like stock and ETF screeners, options chain filters, educational videos, real-time quotes, charts and CNBC Video on Demand. It does its best to mimic a desktop platform and mostly succeeds.
Scottrade gets points for offering a platform suitable for every kind of trader. Aside from ScottrateELITE, the company offers:
- Scottrader Streaming Quotes, another desktop platform with advanced charting and advanced order entry with provisional trade commands.
- ScottradePro, available through a recently formed partnership with Interactive Brokers. The deal essentially brings that broker’s powerful option-trading platforms — Trader Workstation for desktop, Trader Web and Trader Mobile — to Scottrade customers under the name ScottradePro, alongside discounts on equity and options trades, as mentioned above. Scottrade acts as the introducing broker to Interactive Brokers, which ultimately executes ScottradePro trades.
Finally, Scottrade’s website trading wins points for user-friendliness by translating the technical indicators on charts and screeners into language a beginner can understand. The site also offers a Morningstar-powered tool that reviews client portfolios to identify imbalances, then serves up investment suggestions to tip the scales back in the right direction.
Winner: It’s a bit of a toss-up, given that E-Trade’s trading tools are a bit more advanced but the company has such a high minimum for E-Trade Pro. Still, we’ll give this one to E-Trade, with the note that option traders should check out ScottradePro for access to Interactive Broker’s strong platforms without that broker’s minimum activity requirements.
Which one is right for you?
E-Trade pretty cleanly edges out Scottrade on most of the factors that active traders weigh heavily, including platforms, tools and investment selection.
But most investors will pay lower commissions at Scottrade, and costs count. Scottrade is also known far and wide for its high-quality customer service; with 500 local branches, the company likely has one near you. New or beginner investors may appreciate chatting with an expert in person, which is one reason why Scottrade landed on our list of best brokers for beginners.
There’s a reason many investors find a happy home with both of these brokers: They excel in different areas. Advanced traders and ETF investors are likely to prefer E-Trade, while Scottrade is a very strong match for beginner investors.
Updated March 15, 2017