When it comes to online stock trading, choosing the right brokerage website is nearly as important as choosing the right stocks. With a multitude of varying features and fees, picking the wrong site can be costly and frustrating. Two major competitors in the brokerage arena are Scottrade vs. E*TRADE. Both websites have the same basic features, but as you dig deeper into the two sites, it will quickly become clear which offers the better value.
Naturally, the first question on any investors mind is what each site's cost is. In the competition between Scottrade vs. E*TRADE, there is minimal discrepancy, but the differences are certainly notable. The Initial startup cost for an account with Scottrade is $500, while E*TRADE requires a $1000 initial payment to open a trader account.
When it comes to individual trades, Scottrade charges a flat fee of $7 for stocks and exchange-traded funds, while E*TRADE charges $9.99 for anyone who trades between zero and 149 times per quarter, and $7.99 for those who make more than 150 trades in a quarter. For those looking to trade mutual funds, Scottrade offers slightly more than 2,800 mutual funds that you can trade free of charge, while other mutual funds have a $17 transaction fee. E*TRADE charges a flat fee of $19.99 for all mutual funds. For anyone looking to trade options, Scottrade charges $7, with an additional $1.25 for each contract. E*TRADE costs $9.99 plus $.75 per contract for anyone who trades between zero and 149 times per quarter. For those who trade in excess of 150 times per quarter, the cost is $7.99 plus $.75 per contract.
In addition to lower costs, Scottrade also has no hidden fees for inactive accounts or account maintenance. The clear winner in terms of cost in the Scottrade vs. E*TRADE matchup is Scottrade.
Money is not the only thing to consider when choosing a brokerage website. Each one offers different trade options. Scottrade will trade stocks, CDs, options, mutual funds, municipal bonds (Munis), exchange-traded funds and Canadian stocks. E*TRADE offers stocks, bonds, futures, options, mutual funds and exchange-traded funds. There is no clear winner between Scottrade vs. E-trade in this case. It depends entirely on which options you require from your brokerage.
The other features are where the difference between the two companies becomes clear. Between Scottrade vs. E*TRADE, Scottrade has a huge user community and numerous resources for first-time investors and those who are new to online trading. E*TRADE offers limited support in both areas. Scottrade has streaming quotes that operate in real time, as well as charts that show stock histories and help you make sense of the data. Scottrade also has a much stronger information base and a simpler user interface. The only downside is that Scottrade does not offer electronic withdraws, making fund transfers time consuming, but also more secure. In terms of features, the clear winner between Scottrade vs. E*TRADE is also Scottrade.
Generally speaking, E*TRADE is geared toward more high-powered users rather than average investors. The company seems to be trying to carve out a niche for those who are seeking to trade extensively, or who intend to trade for a living, with its higher initial cost and higher cost per transaction. It is honestly unclear, however, why anyone who does not require E*TRADE's features would use that company when Scottrade offers a much simpler, easier and cheaper alternative, with a far greater level of community support and educational resources.
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