Difference between Etrade and Scottrade
If you are in search of an online brokerage company, the two names that you are probably considering are Etrade and Scottrade. After all, the two companies are virtually synonymous with the online brokerage business, although they do have marked differences as well as similarities. Let's take a look at some of them in this comparison article.
Profile
Etrade is a financial services company that provides a variety of discount stock brokerage services to an online market of investors. Among the investment options the company offers are stocks, bonds, mutual funds, IPOs, futures and options. Etrade also provides customer support that gives potential investors information about the latest rates, various account options, and trade news. Etrade charges a fee on each trade as opposed to a full-service broker that charges you for the entire package.
Scottrade offers similar services as Etrade, and it is distinguished by a variety of helpful online features and reasonably priced commission rates. The company also offers a variety of trading tools and services for new traders on the stock market.
Key Points
At Etrade, the average price for mutual funds is $19.99, and $6.99 to $9.99 is charged for stock and option trades that amount to less than $50,000. The company also offers customers an Etrade Complete Savings Account that comes with a 5.05% APY. On the company website, users will find various tools for asset allocation, and integrated access is provided to all Etrade broker accounts, which are available in more than 40 countries around the world.
Scottrade offers traders the advantage of accounts that can be opened with as little as $7. The company also offers what it calls “trailing stops” which basically helps traders execute buy and hold transactions.
The company actually has three varieties of services to choose from: scottrader, Scottrade.com, and ScottradeElite, with the latter being an easy-to-use option that gives new users access to online reviews and news right on their desktop. Scottrade also has the edge over Etrade in that it doesn't charge you anything for an inactive account.
On the downside, Scottrade charges a $7 commission on each trade, which is considerably higher than the fee charged by Etrade and other similar services. Scottrade also doesn't offer mutual funds for free.
Strengths And Weaknesses
While Etrade does offer a good variety of options for experienced investors, it is not really the best choice for beginning traders since the rates aren't competitive enough to warrant long-term membership.
As for Scottrade, its strengths lies in allowing new traders to create a portfolio quickly, although fund transfer rates tend to be slow in addition to the other drawbacks, such as the unavailability of free mutual funds.
Summary
Etrade
- Charges a fee on each trade
- Rates aren't competitive for those new in the market
- Better suited for more experienced traders with larger revenues
Scottrade
- Online accounts can be opened with as little as $7
- Offers “trailing stops” that help traders execute buy and hold transactions
- Doesn't offer mutual funds for free
