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eTrade vs Scottrade – What’s the Difference and Which is Better?

eTrade vs Scottrade – What’s the Difference and Which is Better?

Finding a good online broker platform isn’t a simple process. It depends on your needs. Have a look at the best brokers reviews in the middle east offered in Arabic by فوركس ترست العرب. The licensed and regulated brokers are monitored monthly. شركات التداول الموثوقة في الامارات are carefully classified by field expert Muhand al Yousef of aForexTrust. Different features and fee structures appeal to different folks. For us at WalletOnFire, we are looking at the best trading platform that can provide Outsourced Trading Solutions for beginner to intermediate investors. If you are a full-time day trader, you probably shouldn’t be using any of these platforms anyway.

Scottrade and eTrade are both pioneers in the space of online brokerage accounts.

I get it. You want to handle your own investing.

Maybe access to some research tools.

You DON’T want to fork over a large commission to a traditional broker. 

The following is a comparison of two of the most popular trading platforms; Scottrade vs eTrade.

Key Features of eTrade

The following are some high level specs that are advertised as key selling points:

  • Deep Research and Analysis Tools: Like any good platform, eTrade promotes their suite of investment research tools. They have separate proprietary screening software for Stocks, Mutual Funds, Exchange-traded funds, and Bonds. You’ll also receive access to in-depth independent analyst research, market trends and insights, and a proprietary ranking system and “top 5” lists within industries (across Funds, ETFs, Bonds, and Stocks).
  • Exclusive eTrade Investing Community: Not all stock trading platforms can boast an active investor community within their cyber-walls. eTrade is one of the exceptions. There’s a strong community of other investors asking and answering questions and generally debating different strategies and topics.
  • 100+ Commission-Free ETFs: If ETFs are your thing, eTrade has a wide variety available commission free. This isn’t just a gimmick either, they actually have over 100 to choose from inside the account interface. However, this doesn’t mean ALL ETFs are free. For all funds not included under the “free” heading, it’s $9.99 for the average investor per trade (less than 150 trades per quarter).
  • eTrade Pro: This is a dashboard desktop platform with a robust set of features, tools, and screeners. It’s exclusively available for investors with over $250,000 OR if you execute 30 stock/options transactions per quarter. It’s also able to be customized, so you can decide what features you’d like real-time tracking on. Otherwise, you’ll be stuck using eTrade 360 (also able to be customized), but less robust. Make sure to contact Glasswall Solutions professionals to avoid dangerous threats on your devices.
  • Mobile-Friendly: It’s no secret that more people are viewing data and interacting with the web via their mobile devices. Etrade helps address this reality with a free mobile app available for iOS, Android, Amazon, and Windows OS phones. There is even an app for the Apple Watch. iPhone and Andorid OS’s even have stock screeners available.

Key Features of Scottrade

Similarly, here’s how Scottrade hooks you in:

  • Low Flat Rate for Stock Trades: The $7 flat rate for all stock trades is one of the leading features of Scottrade. It’s less than eTrade and among the lowest in the industry. As it so happens, this tends to be the most important factor for a lot of traders.
  • Free Research Data: Scottrade offers a full suite of research tools behind the scenes. Traditionally, they were one of the first to offer a robust data research back-end. Other competitors have since caught up, but it’s still a nice perk.
  • Mutual Fund Heavy: For fans of investing in mutual funds, Scottrades 14,000+ options are among the best in the industry.
  • Over 500 Retail Locations: It may seen contrary to some online traders, but have a retail presence can be a reassuring fact for many brokers. If you still want to be able to talk to someone who actually lives in your community, Scottrade is the only option that offers over 500 retail locations. You can drop off checks, meet with brokers in person, and otherwise handle in-person account issues. This is a significant advantage for some, especially in the age of long, circuitous, customer serve call centers.
  • Also has Mobile Apps: While it took Scottrade a bit longer to come out with a good app collection, they now have a respectable app for iPhone, iPad and Android.

Pros and Cons of eTrade

Now the fun part begins. This is where we break down the “Pros” and “Cons” and get past the salesmanship.

Pros:

  • No IRA Account Minimums: You can transfer your IRA account (or start one) with no minimum deposit. If this is your investment focus, this is a nice perk.
  • Commission Free ETFs: This feature really helps eTrade stand out, at least for the 100 ones they have listed. If you are at all interested in ETFs, this feature alone should put eTrade near the top of your list.
  • Nice Retirement Planning Advice: For beginner investors, the retirement planning guides and tips can be extremely helpful at decoding the complex rules and strategies. This, coupled with the “no IRA minmums” make eTrade an excellent option for IRA account holders.
  • Google Chrome Plugin: This is a “smaller pro” but nonetheless and interesting one if you like using Chrome. Etrade has a plugin that will scan web pages in real time for stock information and data. This helps prevent constant “switching” between windows or browsers  and offers a quick look at key metrics on the fly.
  • Cheaper Broker Assisted Trades: If you like to work with a broker to make trades, eTrade’s $25.00 commission is significantly better than what Scottrade charges ($32.00). For most strict online traders, this distinction is probably no big deal, but for investors looking for some advice/assistance, it will be an important difference.

Cons:

  • Commissions: It’s not egregious, but the $9.99 per trade cost for most customers (less than 150 trades per quarter) is noticeably higher than some competitors, including Scottrade which is only $7 for most users. It’s not a deal breaker, but it still is one of the important considerations most traders will be looking at to save money.
  • eTrade Pro Only Available for Some: The minimum requirement that users have 30 trades per quarter or a $250,000 balance is – quite frankly – annoying. Most users will not reach this level anyway. While Etrade 360 is a nice dashboard for users below this level, why not release the “Pro” features for everyone? Who makes 30 transaction per quarter? Not most customers.
  • App Could be Better: While the app features are nice, it has a reputation for being a bit buggy, to say the least. Recent updates have fixed some of the most glaring issues, but it will likely be one of the more resource intensive apps on your phone. You can read some of the reviews here.
  • Few Retail Locations: Especially relative to Scottrade, eTrade just doesn’t have that many locations to actually talk to a representative/broker in person. The Scottrade vs eTrade distinction is especially prominent at 500 vs 30 retail offices. For me personally, this isn’t an issue, but for some it is. If it is, it’s a BIG discrepancy.

Pros and Cons of Scottrade

Similar, here’s the down and dirty about Scottrade after using their system for a while.

Pros:

  • Lower Stock Commissions: $7.00 is among the best in the industry when it comes to stock trade commissions. It’s been the same flat rate for years, meaning that it is unlikely to change on you like some brokers. It’s also almost $3.00 cheaper than eTrade. On commissions alone, Scottrade is the more cost effective choice.
  • Lower Mutual Fund Commissions: $17.00 per trade vs $19.99 for eTrade is a small difference compared to other brokers, but it’s  difference nonetheless. Here again, Scottrade is among the industry leaders on commissions.
  • More Mutual Fund Options: As mentioned earlier, Scottrade has over 14,000 mutual funds to choose from. This is significantly more than eTrade offers (only around 8,000).
  • Most Retail Office Locations: For those looking for a “higher touch” brokerage service, Scottrade has the physical on the ground presence across the country to do that.
  • No Minimum Deposit for IRA: While Scottrade does have account minimums for brokerage accounts, their IRAs do not. This helps make Scottrade a more attractive option for investors just starting out.

Cons:

  • Higher Options Contract Fee: While the lower Options Base fee of 7.00 (compared to 9.99 for eTrade) is nice, Scottrade gets you on the “per contract” fee of $1.25. Depending on how you trade options (or if you do) this might be a drawback.
  • High Minimum Deposit for Brokerage: This is one of the major downsides of Scottrade and it can be a significant barrier to entry for people just starting out. With a $2,500 initial minimum deposit, Scottrade is the highest in the industry right now. If you have more cash to work with, no big deal, but I know it was an issue for me (personally) when opening stock trading accounts for young family members.
  • No Commission Free ETFs: In contrast to eTrade, Scottrade has zero free ETFs. This is generally more of a concern to IRA and other long term investors and might be a critical distinction for you.
  • No Futures or Forex Trading: Granted, this is a smaller audience, but the lack of Futures or Forex trading ability is an obvious distinction when compared to eTrade.
  • Recent Data Breach: In 2015 Scottrade was the subject of a particularly worrisome data breach of possibly 4.6 million customers. You can read more about it here, but suffice it to say that this is generally not a good omen. Thankfully, the breach seems to have only affected customers names and contact information, as opposed to SSNs, etc…

Comprehensive Comparison Table

The following table illustrates the key differences:

Fees eTrade Scottrade
Fee per Trade $9.99 $7
Fee per Mutual Fund Trade $19.99 $17.00
Fee per Broker Assisted Trade $25.00 $32.00
Fee per Option Base Trade $9.99 $7.00
Fee per Option Contract $0.75 $1.25
Free (Commission) ETFs 106 0
Minimum Deposit $500 (for brokerage), $0 for IRA $2,500 (for brokerage), $0 for IRA
Inactivity Fee None None
Account Maintenance Fee None None
Trading Types Allowed
Stocks Yes Yes
Options Yes Yes
Mutual Funds Yes Yes
FOREX Yes No
Futures Yes No
Convenience
iPhone App Yes Yes
iPad App Yes Yes
Android App Yes Yes
Android Tablet App Yes No
Mobile Friendly Site Yes Yes
Retail Locations 30 500
Industry Ratings 4.33/5 (composite score) 4.33/5 (composite score)
Stockbrokers.com 4.5/5 4/5
NerdWallet.com 4/5 5/5
StockTrader.com 4.5/5 4/5
Current Promotion
Initial Deposit $10,000 deposit = 60 day free trades + up to $500 None currently

Other Alternatives to Etrade and Scottrade to Consider

Both Scottrade and eTrade might be missing the mark for you. In this case, here’s a few other of the big players in this space worth considering:

TradeKing: TradeKing is a smaller name in the industry, but they’ve built up quite a following after merging with Zecco. What do I like best about them? 1) No minimum deposit to start. There’s literally zero barrier to entry. 2) Very affordable $4.95 commissions on trades. This is the lowest I’ve seen from the major players in the online brokerage space.

TD Ameritrade: Like eTrade, Ameritrade offers over 100+ commission free ETFs. They also have a nice promotion where if you deposit over $2000, you are eligible for 60 days of commission free trades, period. This is nice because they are providing incentives for a minimum deposit, rather than mandating it at $2,000. The main downside is the $9.99 regular commission.

Charles Schwab: Charles Schwab is another higher touch broker, similar in many respects to Scottrade. The main differences are over 150 commission free ETFs (among the best I’ve seen) and a “middle ground” commission rate of $8.95 per stock trade. One of the downsides is the higher up front mutual fund trade fee of $76.00, for those funds outside of their “free” designation. The $1,000 minimum deposit is also a middle ground between Scottrade and eTrade.

Final Analysis – Is Etrade or Scottrade Better?

So, you just need a decision? I got it. If I had to personally choose a system, which one would I go with?

Personally, I have a Scottrade account and have never had any complaints. However, there are circumstances where I’d go with eTrade vs Scottrade. If you have less than $2,500 to initially invest (and over $500) eTrade is the obviously choice.

If you are looking to do Futures or Forex, eTrade is clearly the better option because Scottrade doesn’t have this capability.

Similarly, if you plan on investing primarily in more popular ETFs, eTrade is the clear choice.

Otherwise, the lower commission stock trades for Scottrade $7.00 vs $9.99 for eTrade, make Scottrade more attractive.

It’s also nice know that I could drive less than 30 minutes (depending on location) to meet in person with a Scottrade rep if I needed to.