The following is part of our online stock broker reviews series, helping you find a better broker for your investments.
E*Trade and Scottrade are two leaders among online brokers, each offering practical ways to buy and sell stocks. If you are new to online investing but would like to dabble in or even master the stock market, it is essential to do your due diligence and research the various options and benefits that each broker offers.
Depending on the amount of activity present in your account each period, there are different types of accounts and fees. Some brokers even charge inactivity fees, as well as minimum balance requirements and variable commission rates. Pinpointing the best place to invest is the first step in building a strategic portfolio. Here is a quick comparison of E*Trade and Scottrade so that you can make the investment decision that is best for you.
E*Trade has a diverse line of trading and investment services that cover many options in mutual funds, stocks, bonds, Futures, Options and IPOs. Their robust offering of online resources may be initially overwhelming for the novice investor, but thankfully there is a user-friendly help center that will take you on an informative tour of news, rates and different account options.
Commissions and Trading Fees
With E*Trade a flat commission of $6.99-$9.99 is charged depending on how many stock and/or options trades you make and fees of up to $12.99 are in place for purchases below $50,000. Transactions for mutual funds are $19.99. There is an amazing ‘no load, no transaction fee fund’ available with each account, but do not forget that there are early redemption fees involved.
E*trade also offers online asset allocation tools and access to advisors who can help you with all of your asset allocations. The overall consensus seems to be that E*Trade offers a diverse spread of options for seasoned investors, complete with premium services for clients who trade actively.
On the other hand, beginning investors may find that the rates are not competitive enough to hang around for the long term.
For inexperienced investors, Scottrade is ideal in that it offers competitive initial rates and low monthly fees. The main features of Scottrade start with a minimum account balance of $500. There is a $7 flat rate fee for both market and limit orders, which means that there are no extra fees to calculate and worry about.
If your account lies inactive, there are also no inactivity fees, which means you can leave it untouched for periods of time and not be concerned about racking up fees.
Scottrade has three platforms available to choose from: Scottrader, Scottrade.com and ScottradeElite. Basically, Scottrade is an ideal online discount broker for beginners who are just learning how to invest and can allow you to easily create a nice portfolio in a reasonable amount of time.
Minimum Investment and Balance
At Scottrade you can open an account for $500, whereas at E*Trade it will cost $1,000 for cash accounts and $2,000 for margin accounts. Scottrade is also free of hidden account maintenance fees and has one of the highest customer satisfaction ratings according to JD Power and Associates. At E*trade there are no IRA account fees and no minimums required with electronic statements and trade confirmations.