Would you be surprised if I told you I couldn’t find everything I wanted in an online discount brokerage firm? Well, then you’d be right to not be surprised. Although, I came pretty darned close. I compared Scottrade, TD Ameritrade, Charles Schwab, E*Trade and Fidelity.
This handy chart from Scottrade made the comparison simple as...well, things that are simple.
All in all, it looks like Scottrade has the most affordable platform.
-They have no annual or quarterly fees. Schwab, TD Ameritrade and Fidelity also do not have fees but they have higher minimum deposits, more expensive commissions and fees to close or transfer accounts.
-Scottrade has $7 commissions for the positions I’ll be trading. Everyone else charges at least $9.99 for trades. They all charge extra for broker-assisted trades, but at $27, Scottrade charges about half of what the others do.
-Scottrade charges no closing or transfer fees. Fidelity charges $50 for IRA transfer and closing, but nothing for a non-retirement brokerage account. The others charge from $50-$75 for either type.
-With Scottrade, you have access to 1,150 no load mutual funds to buy with no fee other than a sale charge imposed by the mutual fund company if you sell over a short period of time. All the companies (except E*Trade) have more no loads available than Scottrade, but with other charges they impose, it's not worth it to open an account with them just for no load mutual fund selection.
-Scottrade offers free live quotes and online statements. TD AMeritrade and E*Trade both charge over $29 per month for live quotes (which is dumb considering you can get them free at Yahoo finance). Fidelity doesn't even have them available and Schwab only offers them to "active traders" which to me screams, "People who spend a lot of money on commissions."
Here are the things I will have to compromise on if I open an account with Scottrade:
-There is a $500 minimum balance to open. I wanted to find a company that required no minimums simply because I don’t like minimums. Since Scottrade seems to be the only company that charges no fees, has free live quotes and has the cheapest commissions, I’m not going to sweat a $500 minimum.
-No ACH (bank draft). They have check writing privileges for accounts with a $5,000 minimum, so it’s not like you can’t access your money. But I couldn’t find anywhere on their site any bank draft information or availability. It may be that it is available, but not publicized.
Another thing I found interesting about the Scottrade account was that their fee for options trading is pretty cheap. They only charge an additional $1.25 per option contract (a contract consists of 100 shares). They take limit orders and have screens very similar to Reuters.
While I’m not asserting that Scottrade is the perfect discount brokerage for everyone, it certainly seems like the perfect one for me. And if it turns out that it ain’t, at least I can transfer for free! When you decide to open an account with an online discount brokerage firm, make sure you write out the things that are important to you and try to find the firm that offers the most of them.
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There is a lot of red on OmirOni's statement.