Reader Question: I was looking at your investing for newbies article and was interested in Scottrade. How much does it cost to trade with them?
Answer: Good question. The answer is complicated, because there are so many different ways to invest when using an online investing service. Scottrade is traditionally the cheapest all around, beating out other online investing sites like E*Trade, Charles Schwab and others. Here’s a quick breakdown of what each of their services cost:
Stock trading: Scottrade offers $7 online trades, which is less than most other online investment sites. Most others charge up to $10 per trade, although E*Trade offers $7.99 per trade which is close. You can also get 50 trades for free here.
Minimal initial deposit: Scottrade requires $500 to start trading, which is cheaper than most, although the same as E*Trade. The only site that requires no minimum deposit is TD Ameritrade, but that doesn’t apply for for Margin or Options.
Stock Options: For stock options, Scottrade charges $7 plus $1.25 per contract. Even thought the $1.25 fee is more than most other sites’ $0.75 fee, with the cheaper stock trading fee of $7, it evens out.
How Much Does It Cost to Switch My Investments to Scottrade?
Scottrade is also offering $100 in broker transfer fees to be refunded to you. When you switch brokers, your previous broker can charge you $100 to switch, which is what Scottrade would reimburse.
If you are interested in checking out Scottrade for yourself, you can go to the site here.