Scottrade and E*TRADE both have a reputation as leading online brokers. Beginning investors know them as an easy site to get their feet wet in the world of stock trading, while more sophisticated investors still have the tools and resources they need at their fingertips.
You may have also seen E*TRADE and Scottrade in the news of late, as E*TRADE bought out options trading platform OptionsHouse in July and TD Ameritrade agreed to purchase Scottrade in October for $4 billion. However, neither merger is expected to significantly impact existing users.
Wondering whether one or the other will be better for you? We’ll take an in-depth look at E*TRADE and Scottrade, comparing them in six crucial areas: fees, trading options, user interface, customer support, research, and banking.
E*TRADE vs. Scottrade: Fees
First, let’s look at one of the categories where we can make a real apples-to-apples comparison of Scottrade vs. E*TRADE: the fees they charge.
|Stocks and ETFs (online/no broker)||$4.95 each for more than 30 trades per quarter; $6.95 for fewer||$7 per trade|
|Stocks and ETFs (broker assisted)||$25||$32|
|Options||$4.95 plus $0.50/contract each for more than 30 trades per quarter; $6.95 plus $0.75/contract for fewer||$7 plus $1.25/contract|
|Mutual funds (no load, no transaction fee)||None||None|
|Mutual funds (transaction fee funds)||$19.99||$17|
|Margin trading rates||3.89% to 8.44%||5.25% to 7.75%|
|Account maintenance fees||None||None|
|Minimum initial deposit||$500||$2,500|
Unless you’re going to frequently make pricey broker-assisted trades or you don’t have the $2,500 minimum to open an account, Scottrade gets the edge when it comes to fees. Options and mutual funds are also easier on the wallet. Note than neither E*TRADE nor Scottrade charges account maintenance or inactivity fees.
E*TRADE vs. Scottrade: Trading Options
Both E*TRADE and Scottrade should satisfy most casual investors who want to put their money in stocks, bonds, or mutual funds. You can open a no-fee IRA with either firm. If you’re looking for more variety, however, note that only E*TRADE offers advanced options including foreign exchange (FOREX), futures trading, pink-sheet stocks, and international markets.
If you’re zeroing in on mutual funds, Scottrade may have the edge for you. According to StockBrokers.com, Scottrade offers more than 7,000 no-load mutual funds and over 14,000 in total. E*TRADE offers close to 4,500 no-load funds and just under 8,000 in total. However, if you’re interested in commission-free ETFs, E*TRADE offers more than 100, while Scottrade doesn’t offer any.
E*TRADE vs. Scottrade: User Interface
E*TRADE is known for its sophisticated, easy-to-use interface and trading tools. Traders can research investments and make a trade with a few clicks in the same screen.
In fact, it ranks first among online brokers in StockBrokers.com’s annual rankings for its smartphone app and client dashboard. That site praises the user-friendly drag-and-drop homepage, and also gives a nod to E*TRADE’s new Google Chrome browser trading tool, which lets investors manage their accounts without even leaving the website they’re currently on. The Simple Dollar’s Mike Jelinek also calls E*TRADE’s mobile app “a level above the others on the market.”
While Scottrade also boasts customizable, easy-to-use tools, the site does look a bit more dated than E*TRADE. StockBrokers.com also notes some minor complaints, such as no snap-to-grid functionality for individual windows. The firm’s mobile tools also lag the competition in crucial areas including load speed and ease of navigation, Jelinek notes.
E*TRADE vs. Scottrade: Customer Support
On top of email and phone support, both E*TRADE and Scottrade have a handy chat feature if you want immediate answers without making a call. E*TRADE also has a helpful Frequently Asked Questions section and a repository of its most-requested forms and applications, while Scottrade will also answer questions via Facebook and Twitter.
Both brokers have physical locations, but Scottrade has a major edge here: It has more than 500 brick-and-mortar offices nationwide if you need some face-to-face help. E*TRADE has a comparatively anemic 30 branches, many of which are concentrated in New York and California.
In J.D. Power and Associates’ ratings, E*TRADE wrangles a “better than most” rating for interaction, while Scottrade is “about average.” The category considers investors’ experience with customer service over the web, on the phone, and at physical branches.
However, StockBrokers.com gives Scottrade its #1 Industry Award for both overall client experience and email support. The site notes that customer service calls go through Scottrade’s local offices during regular business hours, helping clients build a rapport with advisors that isn’t possible via a central call clearing house.
E*TRADE vs. Scottrade: Research
Whether you’re a beginner or a seasoned trader, you’ll need a reliable platform to research potential trades. E*TRADE offers reports from Standard & Poor’s, MarketEdge, Thomson Reuters, and SmartConsensus, and the research interface makes crucial information available at a quick glance.
StockTraders.com highlights the firm’s fully featured charting tool, which also allows you to display any post-hours trading, as particularly useful. As a nice bonus, E*TRADE offers an online trader community where you can bounce ideas off others — just be sure not to make a rookie mistake and constantly follow the herd.
Scottrade is no slouch when it comes to research, with similarly easy-to-use tools. StockTraders.com highlights Scottrade’s SmartText feature, which gives you a quick, easy-to-digest analysis for earnings, charts, and sectors and industries. However, Scottrade only offers reports from three third parties, according to StockTraders.com: Standard & Poor’s, Thomson Reuters, and Second Opinion.
E*TRADE vs. Scottrade: Banking
While you probably won’t choose your online broker based on banking services, they’re a nice bonus — especially since you can easily transfer funds between your bank and brokerage accounts.
Scottrade is more fully featured when it comes to banking, offering savings, checking, and money market accounts. It also has certificates of deposit. Generally, interest rates are nothing to write home about, so if you’re looking for high yields, check out our guide to the Best High Interest Savings Accounts Online. Scottrade’s Interest Checking account offers a paltry .01% APY, but you’ll get a free debit card, free online bill pay, and no ATM fees nationwide. Your balances will be FDIC-insured up to federal limits.
E*TRADE does not offer a savings account, but it does have two checking options: a basic, no-fee checking account or Max-Rate Checking, which will get you .05% APY on balances above $5,000. If your balance dips below that number, you’ll have a $15 monthly service fee. (You can also avoid this fee by hooking up direct deposits of at least $200 a month or maintaining a $50,000 balance in certain linked E*TRADE accounts.) This account also offers unlimited ATM fee refunds nationwide. Both accounts will get you unlimited online bill pay, a Visa debit card, and FDIC insurance on your balance up to federal limits.
Scottrade vs. E*TRADE: Which is best overall?
Winner: It’s a tie
You can’t go wrong with Scottrade or E*TRADE — both online brokerages have the tools and resources to satisfy nearly every level of investor. If you’re thinking of opening an account with either one, now’s a great time: Scottrade is offering up to a $2,000 cash bonus if you open a new account or fund an existing account with a qualifying deposit, and E*TRADE is offering up to a $2,500 bonus and free trades for qualifying deposits or transfers.
However, if you’re looking for a general recommendation, here’s our take: If you’re a beginning trader, then Scottrade would be our pick. It has the basic trading options you’ll want, keeps fees low, and has industry-leading customer service to lean on when you need help.
If you’re a more advanced trader, then you might want to go with E*TRADE. You’ll have more trading options, a better interface (both mobile and online), and slightly better research tools. Fees are a bit higher than Scottrade, but they go down if you’ll be doing a higher volume of trading.
If you’re not sold on Scottrade or E*TRADE, we offer more reviews in our guide to the Best Online Stock Trading Brokers of 2018.