So many online brokers, so many choices. Three of online broker giants are TD Ameritrade, Scottrade, and ETrade. They are also the most advertised and can be found everywhere over the Internet. Combined, they have more than 1000 locations. The thing is, while they all sound great in ads and advertorial, each one of them comes with advantages and disadvantages.
- Review of: TD Ameritrade vs Scottrade vs ETrade
- Reviewed by: Janet Berry-Johnson, CPA (Forbes.com Contributor)
- Join TD Ameritrade today! Barron’s ranked #1 for Long-Term Investing. Open a new account and get up to $600.
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Last modified: November 22
These three firms offer you various solutions for your investing requirements with promises of low fees, user-friendly interface, various platforms, trading tools, research and educational materials, and more choices. The one that’s best for frequent traders, for instance, may not be the best for newbies.
In this article, we’ll be discussing these considerations:
- Commissions and broker costs
- Account Minimums, maintenance fees, initial fees
- Investment choices (mutual funds and Electronic Funds Transfers or EFTs)
- Trading tools and Web platforms
- Research and analyses
- Mobile platforms
- Banking features
- Customer service
For commissions, trading stocks and EFTs at Scottrade only costs $7, while at Etrade and TD Ameritrade would cost $9.99. For options, Etrade and TD Ameritrade cost $0.75 extra per contract, while Scottrade costs $1.25 more. If you trade with a broker at Etrade, it would cost $25, which is the lowest among the three. At TD Ameritrade, it is $44.99 and Scottrade is $32. These costs can add up pretty quickly if you trade a lot.
The great thing about account minimum is all firms require no maintenance fees or inactivity fees, which is the beauty of online trading. For Etrade, the minimum initial deposit is $500, Scottrade $2,500 and TD Ameritrade has no minimum. For IRA accounts, in all three firms, there is no account fee.
On investment choices, investing with TD Ameritrade would allow you to choose more than 11,000 mutual funds. Among these funds, 2,000 have no load and no transaction fee, while transaction fee for mutual funds are $49.99 for the broker. They also offer 101 commission-fee EFT’s. It’s ideal for those who want to have more choices.
You can choose from a pool of 8,000 mutual funds at Etrade, of which 1,300 come without load and transaction fee. However, you pay $19.99 for transaction-fee funds. They also offer 118 commission-free EFT’s.
If you choose Scottrade, you can choose from 14,000 mutual funds, of which 3000 of them come with no transaction fee nor load. However, transaction fee funds would cost $17. Scottrade doesn’t offer any EFT’s.
On trading tools and Web platforms, the easiest one to navigate among the three is Etrade’s. It’s especially useful for frequent traders, as it comes with advanced platforms, which work in browser and on desktop. It’s not very useful for occasional or new traders.
For those who prefer to choose from several platforms, TD Ameritrade comes with three options. First, for Web browser, which is pretty basic and suitable for newbies and occasional traders. For those who are more advanced, there is a Java-based platform. For master traders with advanced skills, there is a sophisticated desktop system. For those prefer to trade on paper, the desktop system provides access to paper trading.
On the level of sophistication of technology among those three firms, Scottrade’s system is somewhat basic. However, if you want to access the more sophisticated platform, consider using a broker. They offer Scottrader Streaming Quotes without extra cost. For master traders with very active trading activities, ScottradeElite offers the most advanced system for high frequency trading.
For both newbies and master traders alike, research and analyses are very important in making the decisions to trade. However, the more advanced your trading skills, the more independent your decision-making process would be.
Etrade and TD Ameritrade offer very helpful research, education, and analysis resources. Etrade provides free stock reports from multiple analysts and several screeners for securities. TD Ameritrade offers equity reports from several analysts and also provides how-to videos. Scottrade provides fewer resources and no stock reports. Thus, you’d need to find your own resources to educate yourself.
More and more people trade via their mobile phones. For this, good mobile platforms are key to successful trades. On this feature, Etrade and TD Ameritrade are much better than Scottrade.
Etrade offers separate platforms for Android gadgets (phones and tablets), Windows phone, iPad, iPhone, Amazon Fire phone, and Kindle Fire. They all come with all kinds of educational charts, videos, and mobile check deposit.
TD Ameritrade’s mobile features are quite impressive too. They offer three different apps, which can be used for Apple and Android gadgets and Windows 10 gadgets. On all apps, CNBC live streaming is always available.
Scottrade also offers mobile features on Android, Apple, and mobile Web browser. However, mobile check deposit isn’t available, while options research sources and market news are always available.
On banking features, all three firms come with a debit card and checks at no cost. However, for Etrade, the broker has ATM fees for accounts over $5,000. At TD Ameritrade, there are no account fees and ATM charges. At Scottrade, you must have $500 in brokerage account to open a bank account.
Customer service is another important aspect in deciding which online broker to join. Both Etrade and TD Ameritrade has 24/7/365 customer service phone support. At Scottrade, the customer service isn’t available 24 hours but only available during office hours. Scottrade, however, has the most branches: 500. Etrade has 30 and TD Ameritrade has 100 locations.
Recommendations
Depending on how frequent you trade and your advancement in trading skills, you can choose based on the above considerations. Fees, tools, and investment research are key to decide which firm is the best.
For newbies who must have dependable research materials, TD Ameritrade provides you with the best available research tools, including Standard & Poor’s, Research Tem, and Market Edge. Also, its desktop trading platform provides a great intelligent trading environment where research comes to live. It also provides great multiple-platform flexibility. PLUS go here to Join TD Ameritrade. Trade free for 60 days + Get up to $600.
For frequent traders who are already familiar with research analyses and are more independent in their decision-making, fees matter the most. With only $7 per trade, plenty of choices of mutual funds, and no futures trading, Scottrade is the best choice. No-fee mutual funds only cost $17 per transaction, which is far lower than other firms. However, Scottrade is notorious for not providing adequate mobile experience.