Intro: Scottrade vs E-Trade
Both E*TRADE and Scottrade are widely-known online brokers with established reputations. But when choosing between Scottrade vs. E*TRADE, how do investors know where to turn?
In this review, we’ll break down the E*TRADE vs. Scottrade battle in several crucial areas to give you the information you need to make the right decision.
We’ll look at E*TRADE and Scottrade reviews, fees, research offerings, support, and banking so that you can have all the information you need when choosing where to invest your money.
Overview of Online Brokerages (Scottrade vs E-Trade)
Before we dive into specifics about Scottrade vs. E*TRADE, it’s important to understand what an online broker actually is.
An online brokerage is a firm that operates over the internet and offers do-it-yourself resources, along with lower rates than most full-service or brick and mortar brokerages. Online brokerages are often a good place for beginning investors to start, since they offer a certain amount of handholding.
However, online brokerages still aren’t free – most, if not all, brokerages take some kind of fee or commission from investors. That’s why it’s important to take a careful look at Scottrade and E*TRADE fees and fully understand where your money is going before investing.
Image Source: Scottrade or E*TRADE
There are a few other considerations to make when deciding to start trading with an online brokerage like Scottrade or E*TRADE. Among the features below, you should ensure that you are employing a low-risk, high-reward trading method.
Though all trading involves some amount of risk, you should manage the amount that you put on the line, especially when you first start out. Until you learn how to trade well consistently, it’s best to be conservative with your money.
Online traders should also remember which stocks they currently have and evaluate when the best times to sell and trade are. Even though online brokerages like E*TRADE or Scottrade can encourage a “set it and forget it” mentality, be diligent about keeping an eye on your assets and looking for opportune times to move if the market is right.
Finally, do your research on the funds and stocks you select.
A large amount of online brokerage trading is self-service, and you can choose between a portfolio of broker-managed or unmanaged accounts. Choose wisely based on the experience you have and the time you have to invest in doing your due diligence to research funds.
History of Scottrade (Reviews)
It may not seem like history matters when trying to select Scottrade or E*TRADE for your online investing, but when it comes to your money, it’s good to understand how each company came into being and who their leaders are.
Scottrade is headquartered in Town and Country, Missouri, but was founded in 1980 in Scottsdale, Arizona. Legend has it that Founder and CEO of Scottrade (back then, named Scottsdale Securities) drove his 1970 Corvette all the way from St. Louis to Scottsdale when he began the company.
In 1989, the company had already gained 16 associates in six branch offices throughout the company, leading them to be designated as one of the fastest growing private companies by 1994.
It’s a little-known fact that the reason Scottsdale Securities became Scottrade was because the domain name was already taken. Scottrade.com launched in 1996, with a new name and a new website that made the company one of the first to offer online trading.
In 2012, Scottrade won Fortune’s “100 Best Companies to Work For” for the fifth year in a row, a designation the company is extremely proud of to this day. The company often touts the dedication and happiness of their employees as one of the reasons behind their award-winning customer support.
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History of E*TRADE (Scottrade vs E-Trade)
E*TRADE was founded right around the same time as Scottrade, in 1982, in Palo Alto. Partners William A. Porter and Bernard A. Newcomb founded the company as TradePlus with just $15,000 in capital to start off with.
E*TRADE’s biggest growth years were in the early 90s. Their revenue was at $850,000 in 1992; just two years later, it was upwards of $2 million. The company followed this success with their initial public offering in August 1996.
At several points in the early 2000s, E*TRADE initiated talks with Ameritrade and then TD Ameritrade about a possible merger. However, the two sides could not agree on governance rights or prices, and so the firms remain separate to this day.
Over the past several years, E*TRADE has gained notoriety for its conspicuous advertising featuring the E*TRADE baby, which first appeared during prime time in 2001. However, this advertising tactic didn’t gain worldwide fame until the Superbowl commercials of 2008, which featured a talking baby in front of a web cam.
Today, the company boasts $1.4 billion in revenue and has an impressive 3,400 employees nationwide.
One of the most obvious ways to compare E*TRADE vs. Scottrade is in fees. E*TRADE fees start at $7.99 each for more than 150 trades per quarter on stocks and ETFs, while Scottrade fees are a flat $7 per trade. Scottrade and E*TRADE fees also differ when it comes to broker-assisted stocks, ETFs, and options fees.
E*TRADE options fees start at $7.99 plus $0.75/contract each for more than 150 trades per quarter. For fewer, they start at $9.99 plus $0.75/contract. Scottrade fees for options are a simple $7 plus $1.25/contract.
This tiered structure makes E*TRADE account fees appealing to active investors, but it is still higher than Scottrade pricing. Alternatively, E*TRADE fees may be better for investors with multiple contracts on options who want to pay less per contract.
Scottrade has a significantly higher minimum initial deposit for investors. It starts at $2,500, while E*TRADE begins at a $500 minimum. Therefore, E*TRADE may be more attractive to investors with less to invest when just starting out.
It’s also important to note that neither Scottrade nor E*TRADE have account maintenance or inactivity fees, which can compound at other types of online banking institutions.
Most Scottrade reviews pronounce the brokerage the winner when it comes to fees. However, if you frequently make pricey options or broker-assisted trades or don’t have $2,500 to start your investment account, E*TRADE could be more appealing.
Banking Comparison (E-Trade vs Scottrade)
Image Source: Online Trading
When it comes down to it, banking features are probably not high on the list of reasons why investors choose between E*TRADE or Scottrade for their online trading. However, banking features are a great value-add and can make a big impact on your savings.
Both online firms allow you to transfer funds between your regular bank account and your brokerage account with the click of a mouse, which can be highly convenient. However, Scottrade has more features when it comes to banking, offering checking accounts, savings accounts, and money market accounts.
E*TRADE has just two checking options: a basic package that has no fees, or a max rate checking account that earns investors .05 percent APY on balances above $5,000. In comparison, Scottrade only offers .01 percent APY – but you do receive a free debit card, free online bill pay, and waived ATM fees.
Though these features can make your life easier, if you’re looking for a high yield savings account, you should probably look elsewhere than Scottrade or E*TRADE. But if you really want to compare E*TRADE vs. Scottrade for online banking, Scottrade is the winner for low-yield investors who want convenience; E*TRADE is the best option for those looking to make as much profit as possible, efficiently.
Research Offerings (E*TRADE vs. Scottrade)
One of the biggest reasons investors choose online brokerages is for their vast array of educational materials that cater to both the inexperienced and the seasoned trader. Therefore, it’s important to compare Scottrade vs. E*TRADE’s research offerings to select which one has resources that are right for you.
Both platforms feature an easy-to-use interface with tools like Scottrade’s SmartText, which provides traders a quick analysis of charts, sectors, and high-growth industries for earnings. However, this tool only offers reports from three third parties: Standard & Poor, Thomson Reuters, and Second Opinion. E*TRADE’s similar tool offers reports from S&P, MarketEdge, Thomson Reuters, and SmartConcensus, meaning they have more information collated to give you the most holistic understanding of the market.
Additionally, E*TRADE is well-known for its sophisticated app and mobile site. This makes it easy to customize your dashboard and check your investment performance on the go. All these tools can be used right inside the app, without having to be directed to another browser. Being able to access an easy-to-use interface on mobile is imperative for investors to act quickly based on the market.
If you’re looking to choose Scottrade or E*TRADE for their research offerings, it’s best to go with E*TRADE for their experience in the industry, seamless mobile experience, and wealth of digestible investing information.
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E*TRADE vs. Scottrade Support Comparison
Especially for beginners to the online investing market, getting the support and help you need from your brokerage is crucial. One of the major complaints against online brokerages is that they don’t offer the same support as brick and mortar or full-service agencies that have the resources and facilities to host clients face-to-face.
However, this is where Scottrade has a leg up: many Scottrade reviews tout their 500 brick-and-mortar locations nationwide. These branches offer face-to-face help with technical support or account troubleshooting. This is especially impressive compared to E*TRADE, which has only 30 branches, many of which are only in New York and California.
However, both E*TRADE and Scottrade do offer email, phone, and chat support for immediate answers to pressing issues. They both make use of social media for customer questions and complaints, plus navigation to FAQ pages on their websites.
When investors compare Scottrade vs. E*TRADE when it comes to support, most agree that Scottrade wins out in this department. Stockbrokers.com gave Scottrade a #1 Industry award for their email support and their overall client experience, which says quite a bit, especially considering the financial industry’s poor reputation in the area of customer service.
E*TRADE vs. Scottrade Trading Options
Stocks, bonds, and mutual funds – the most commonly traded types of funds in online brokerage today – are both available on most platforms, no matter if you choose E*TRADE or Scottrade. For these options, E*TRADE does offer slightly more higher-powered options, like the ability to enter into the foreign exchange, pink sheet stocks, engage in international markets, and dabble in futures trading. For the internationally-minded investor, the clear winner of the Scottrade vs. E*TRADE battle is E*TRADE.
However, Scottrade does have some advantages in other trading options. The brokerage offers 14,000 mutual funds in total, while E*TRADE offers about 8,000. When looking for variety in mutual funds, Scottrade could be your best bet.
Both Scottrade and E*TRADE received at least four stars on NerdWallet for online brokerages, and when combined, have over $250 billion in client assets. For years, traders have trusted these sites to provide affordable and safe transactions along with handy advice and resources. Investors who are choosing either Scottrade or E*TRADE will enjoy a professional interface and relatively low fees when compared to traditional brokerages, no matter what option they choose.
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