The following is part of our online stock broker reviews series, helping you find a better broker for your investments.
When it comes to online brokers, two of the most popular choices are and Scottrade. Both have low commissions, good customer service and excellent trading tools… so who should the average investor invest their money with? Update: You can now get a $100 TradeKing bonus when you open a new account in 2013.
Commissions and Trading Fees
Overall the fees for both TradeKing and Scottrade are pretty reasonable compared to a traditional brokerage firm but in terms of stock trade commissions and ETF trades, TradeKing is more attractively priced at $4.95 compared to $7.00 for stocks and ETF’s.
Both TradeKing and Scottrade charge surcharges on penny stocks (stocks that are under one dollar) and neither of them charge an additional commission fee for large orders or extended hours trading. One outstanding feature that TradeKing offers the same commission on broker assisted trades. Customers can call a broker and submit orders for the same $4.95 rate as they can place online orders. Few brokerage houses offer this and in fact charge much higher commissions on trades that are broker-assisted.
Scottrade charges $27 for broker assisted trades and seventeen dollars for touch tone phone system trades, so the nod clearly goes to TradeKing on this one. TradeKing charges $0.65 per options contract on each trade plus $4.95 per trade, while Scottrade charges an additional $1.25 per contract plus $7 per trade. The difference between mutual fund trades is around two dollars: TradeKing charges $14.95 and Scottrade charges $17.00. Across the board, TradeKing is considerably less expensive for active trading.
Note: You can compare online brokers fees here for these and other online brokers
Neither company charges a setup fee or require yearly IRA fees. Almost all online brokers charge an IRA termination fee, but Scottrade does not charge anything for IRA termination. Both brokerage firms are considered top brokerages for IRA accounts. Also, neither Scottrade nor TradeKing charge account maintenance or inactivity fees, and neither company has any hidden fees that pile up as you maneuver through their various applications.
Mutual Fund Options
For investors who are looking for a more established brokerage that offers thousands of free mutual funds, the brokerage of choice would be Scottrade, which offers investors who are wanting to invest in large, brand-name companies or in mutual funds a great selection. Scottrade is also highly recommended for customers wishing to plan a retirement account. TradeKing will do everything else and is especially adequate for active traders, options traders and beginner investors.
Those who are new to investing will find ample resources at both TradeKing and Scottrade. Both brokerages offer helpful and educational online investor communities that allow investors to pose important questions and to learn from more experienced investors. They also both offer heaps of comprehensive educational resources and tools that can be easily enjoyed by every skill level, as well as a variety of user-friendly trading tools. TradeKing and Scottrade are listed among the brokerage review’s selection of Best Brokerages for Beginner Investors.
Scottrade does offer programs such as Scottrader and Scottrade Elite. These are tools for high volume traders who are accustomed to the proprietary trading platforms that were in place before the Internet. The advantages of these platforms include being able to save the environment you have been working in so that your screens pull up the same information you were previously viewing each time you log in. Also, prices and new offerings are refreshed automatically so you won’t have to worry about refreshing your screen and missing out on something new.
So who is the better broker? Well, Both TradeKing and Scottrade offer great customer support as well as online resources and trading tools, so the answer depends on your investing needs. If you’re a frequent trader, TradeKing will probably save you money with their lower equity trade fees (especially if you need broker assisted deals), but Scottrade has better options for mutual fund investors.
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Other Broker Reviews
- TradeKing Review
- Scottrade Review
- ShareBuilder Review
- TradeMonster Review
- Zecco Review
- FirstTrade Review