Scottrade and TD Ameritrade are currently two of the most popular brokerage firms. Both offer various features that are designed to help traders of all experience levels to get the most out of their investments. These two discount brokers have similar stock/ETF commission rates, but the other aspects differ quite significantly. So, between Scottrade vs TD Ameritrade, which one is better for you? See the comparisons between these two options below!
Minimum Initial Deposit and Commission Fees
First of all, let’s begin comparing Scottrade vs TD Ameritrade by taking a look at their minimum initial deposit amounts and commission fees. Note that the minimum initial deposit of Scottrade is $2,500, which means that you have to prepare at least that amount of money in order to create an account in Scottrade. On the other hand, TD Ameritrade is a lot more flexible, as it does not have any minimum initial deposit – you can create an account with as little as $1. So, TD Ameritrade is a suitable place if you have a limited budget to start investing.
Both Scottrade and TD Ameritrade now have similar commission fees for stocks and ETFs, which are $6.95 per trade. For options, Scottrade’s fee is slightly lower at $0.70 per contract, whereas TD Ameritrade charges a little bit higher at $0.75 per contract. See also: TD Ameritrade vs Charles Schwab.
Finally, if you ever need to place a trade with a human broker in TD Ameritrade, the commission fee is rather steep at $44.99. The same thing only costs $32.00 in Scottrade. Both platforms do not charge any maintenance or IRA fee.
The next difference between Scottrade vs TD Ameritrade that you need to know is regarding the mutual funds. If you are planning to invest in mutual funds, Scottrade may be the better choice. This is because the platform comes with more than 14,000 mutual funds, of which almost 3,000 are no-load no-transaction-fee (NTF) funds. By the way, load funds are free to buy in Scottrade, but they cost $17 to sell. Meanwhile, no-load funds in Scottrade that do carry a transaction fee cost $17 to trade.
On the other hand, TD Ameritrade also provides diverse options with more than 11,000 mutual funds, of which almost 2,000 are no-load no-transaction-fee (NTF) funds. However, the funds that have a transaction fee are quite pricey at $49.99 per trade. However, the transaction fee becomes less of an issue if you only trade the NTF offerings.
By the way, we also need to point out that TD Ameritrade provides forex and futures trading. Scottrade does not have them.
Education and Research Resources
TD Ameritrade is easily the better one if we compare the resources for education and research. TD Ameritrade is packed with good-quality research tools; it provides its investors the access to free stock/ETF reports from Morningstar, Credit Suisse, TheStreet.com, and some other third-party research tools. TD Ameritrade also has the Investools, which offers education classes that cover a wide range of financial subjects for beginner, advanced, and expert levels.
On the other hand, Scottrade has fairly limited resourced for education and research. It does not provide any research report tool, which is a little inconvenient. However, Scottrade does have some articles and videos in the Knowledge Center. These articles and videos cover various investment topics, and they are quite useful especially for beginners.
Features and Trading Tools
TD Ameritrade is very flexible and versatile that it is available in several platforms. All of the platforms come with Level II Quotes without any additional cost. The first platform is the regular website, which is simple, neat, and highly responsive. The second platform is the Trade Architect, a Java-based application that is launched from the website.
The third platform is Thinkorswim, a stand-alone program which has slightly different offerings. This platform is very useful for investors who want to practice trading because it has the paperMoney feature, a virtual platform that simulates trading with a practice currency.
TD Ameritrade provides a checking account with free checks and a free Visa debit card. It does not charge any monthly account fee. The ATM fees are reimbursed throughout the United States. The broker does this by depositing the balance in up to two FDIC-insured bacnks. The account balance is insured up to $500,000. Nevertheless, TD Ameritrade allows you to transfer funds from a brokerage account to an external bank account via ACH.
On the other hand, Scottrade also has three platforms. The first is the simple and intuitive website. The second is the Scottrader Streaming Quotes, as Java-based application for users who need some more advanced features. The third is the flagship platform, ScottradeELITE, available only for active traders.
Scottrade does have an FDIC-insured bank which provides checking and savings accounts with a standard protection of $250,000. The checking account includes free checks and a debit card. However, to open a Scottrade bank account, you need to have at least $500 in your Scottrade brokerage account. Note that Scottrade does not allow you to transfer funds from your brokerage account to an external bank account.
Finally, let’s have a look at the customer service quality of Scottrade vs TD Ameritrade. Honestly, both Scottrade and TD Ameritrade have excellent customer service. Scottrade has many more brick-and-mortar branches across the United States, with more than 500 locations. This is a plus if you feel more comfortable meeting a real person face-to-face for support. However, note that Scottrade’s phone service is only available from 5.00 AM to midnight CST on Monday till Friday, and from 8.00 AM to 6.00 PM on Saturday and Sunday.
Another nice thing about Scottrade’s customer service is their proactive support. They also often hold helpful seminars at their local branches.
On the other hand, TD Ameritrade has at least 100 physical locations across the United States. But the phone service is always accessible, for 24 hours a day and 7 days a week. So, you can always get support whenever needed. The representatives who speak Spanish, Mandarin, or Cantonese are available at certain hours.
|- $2,500 minimum deposit; the fees are $6.95 per trade (stocks/ETFs), $0.70 per contract (options)||- Zero minimum deposit; the fees are $6.95 per trade (stocks/ETFs), $0.75 per contract (options)|
|- Over 14,000 mutual funds, of which almost 3,000 are no-load no-transaction-feefunds; doesn’t have forex/futures trading||- Over 11,000 mutual funds, of which almost 2,000 are no-load no-transaction-fee funds; has forex and futures trading|
|- Limited education and research tools||- Has many education and research tools|
|- Limited banking options||- More flexible banking options|
|- At least 500 physical locations, phone service, seminars||- At least 100 physical locations, 24/7 phone service|
All in all, TD Ameritrade is generally the better choice. TD Ameritrade is a lot more flexible that it does not have any minimum initial deposit requirement, is available in several platforms, and has more flexible banking options. It is also packed with various resources and research tools. The phone customer service is available 24/7.