Although E-Trade and Scottrade offer many identical features for brokerage accounts, the primary distinction is that Scottrade is geared more toward casual and infrequent traders, while E-Trade is more robust and better-suited for highly active or more experience traders. Scottrade also offers virtual trading, a service that allows users to practice without using real money, which E-Trade does not.
Scottrade’s fees are generally lower, but there is also a lower number of total investment and research options on offer, although this might not matter to casual or beginner investors.
|Products||Stocks, Options, Futures, ForEx, ETFs, and Bonds||Stock broker, investing online: Stocks, Options, Mutual Funds, IRAs, CDs, Fixed Income, Etc.|
|Customer Service||Live broker chat, resourceful online trader community. Very few local branches.||500+ local branches for in-person assistance. Rated #1 in customer service. Large online user community.|
|Good For||Highly active traders and IRA accounts.||Casual and infrequent traders.|
|Research Tools||S&P, Morningstar, Thompson Reuters, Credit Suisse, and Smart Consensus||Exclusive S&P and Dow Jones content, market calendar of important events, virtual Trading (ScottradeELITE)|
|Size/Popularity||3 million brokerage accounts, $2 billion in customer assets.||2.5 million brokerage accounts, $51 billion in customer assets.|
|Stock and Options Fees||$9.99 (under 149 trades/quarter); $7.99 (150 or more trades/qtr.); 0.75 contract fee for options.||$7 (if ordered online); $32 (if ordered by phone or via broker); $1.25 contract fee for options.|
|ETF Fees||$9.99 (under 149 trades/quarter); $7.99 (150 or more trades/qtr.)||$7 (if ordered online); $32 (if ordered by phone or via broker)|
|Mutual Funds Fees||No charge for no-load, no-transaction-fee funds; $19.99/trade on mutual fund transactions.||No charge for no-load, no transaction fee funds; $17/trade for no-load funds not in the NTF. $17 for selling/exchange of load funds, no charge for buying|
|New Account Promotion||Make initial $10,000 deposit to receive 60 days of free trades & up to $500||One free trade for every $1000 deposited ($10,000 minimum, maximum of 250 free trades, must be executed in 6 months)|
|Revenue||$1.723 billion (FY 2013)||$776 mil. (2012)|
|Founded||Palo Alto, California (1982)||Scottsdale, Arizona (1980)|
|Headquarters||Time & Life Building, New York U.S.||Town and Country, Missouri, USA|
E-Trade requires a $500 minimum to open a new brokerage account. There is no platform fee for users who make at least 10 trades per month. E-Trade commission fees for trades are a little steep relative to the competition.
Scottrade also requires a $500 minimum balance for a new brokerage account. Fees and commissions are generally lower than with E-Trade. However, there is an additional 0.5% of the principal value commission for penny stocks. Scottrade also charges slightly higher margin rates.
Stock and Options
For stocks and options, E-Trade charges $9.99 for under 149 trades per quarter and $7.99 for 150 or more trades/qtr. It has a contract fee of $0.75 for Options.
Scottrade charges $7 for stocks and options if ordered online, and $32 if ordered by phone or via broker. Scottrade charges an additional $1.25 per contract for Options.
Like its stocks, E-trade charges $9.99 for under 149 trades per quarter and $7.99 for 150 or more trades/qtr. for ETFs. Scottrade charges $7 for stocks and options if ordered online, and $32 if ordered by phone or via broker.
E-Trade has no fee for its no-load, no-transaction-fee funds, but has a trading fee of $19.99/trade on mutual fund transactions. In addition, broker-assisted trades are charged $25 plus the commission fee.
Scotttrade does not charge a fee for its no-load, no transaction fee (NTF) funds, but charges $17/trade for no-load funds not in the NTF program. Scottrade charges $17 for selling or exchange of load funds, but waives the fee for buying load funds.
One of E-Trade’s selling points is the great research and analysis tools offered by the site. In addition to real-time stocks, charts and news, users have access to in-depth company comparisons and analyses offered through Credit Suisse, Thomson Reuters, S&P and others. Investors also have access to current market commentary, educational videos and web seminars. E-Trade also offers industry-specific suggestions for investing opportunities based on a user’s desired strategy. Stocks and funds can be searched for using an advanced screening and filter settings.
Scottrade’s research tools can be summarized as more basic and easy to use. Highlights include virtual Trading (ScottradeELITE), exclusive content from S&P and Dow Jones, a market calendar identifying important upcoming financial events such as IPOs, earning, and dividends, and sector and industry comparisons. The basic interface is powerful and streamlined: users simply type in a stock symbol and are shown all of the relevant data on that stock, including news, analyst reports, financials, and ratings from third parties.
Banking and Transfers
E-Trade offers users a wide array of financial resources, and can function as a full service broker. Banking services on offer include credit and debit cards, and access to a variety of other resources, such as small business tools, retirement planning, and college savings plans. The fee for a full account transfer is $60, while a partial transfer is $25.
Scottrade has a reputation for good banking services: savings accounts, CDs, money market and free checking accounts (with free ATM withdrawals, Visa check card, and first order of checks free). EFT and check withdrawals are free, and domestic wire withdrawals cost $20. There are no fees for full or partial account transfers. Scottrade charges a $25 fee for domestic wire transfers, and $40 for international. The full account transfer fee is $75.
E-Trade offers fewer local branches than Scottrade, and since it is generally geared towards more experienced users, there less educational resources available for beginners (although more resources are slowly becoming available). Virtual trading, which allows users to practice without using real money, is NOT available with E-Trade. A live broker chat is available, and the online trader community is perhaps the best in the field.
Scottrade has more than 500 local branches throughout the country offering in-person customer service and help. The website also offers a large amount of educational material for new investors including virtual trading, and there is a large online community where investors can get additional advice. Scottrade customers are routinely very satisfied with their experiences on the site.
E-Trade users are overall very satisfied, perhaps a bit less so than Scottrade users, but the site generally receives better ratings from industry websites and users. Reviews.com gives E-Trade 5 out of 5 stars for having the best all around account view, wide range of investment products, powerful online trader community, and a superior mobile app. The downside is the higher fees and lack of virtual trading for beginners.
Scottrade is consistently the most-used online broker. A study by J.D. Power and Associates found that Scottrade leads the pack in terms of customer satisfaction. Customers said they were particularly happy with the customer service, account data, and fee structure. Reviews.com gives Scottrade a 4 out of 5 star rating, praising the customer service and ease of use, while finding fault with the mobile app and general lack of innovation.