Scottrade Bank Review: Best Discount Broker with Bank Account
Scottrade Bank may not have the best rate, but it does provide investors a quick and secure way to fund their Scottrade brokerage accounts. The account is easy to open and convenient to use. Open a Scottrade brokerage account with promo code KGKP0724 to receive 3 free trades and enjoy Scottrade Bank service.
I have been a Scottrade customer for years and whenever I need to add fund to my brokerage account, I use an external bank account linked to the Scottrade brokerage account to transfer money before buying stocks (see my post on how to fund Scottrade brokerage account). It is quite convenient actually, though the system has changed a couple of times. Basically, I can transfer money from my bank account at any time during the day and use the money just transferred to buy stocks immediately even before the fund is settled (the exception is stocks below $4 a share which require cleared funds in order to purchase). This actually is one of the features I prefer Scottrade over other discount brokers because most of them require at least 3 business days of waiting period before any new money can be used for trading.
In addition to using Scotrade Money Direct to transfer fund from an external bank to Scottrade, you can also use Scottrade Bank account to fund your brokerage account.
Though I don’t have a Scottrade Bank account, I would imagine that money in the Bank account can be used to purchase stocks immediately without the above mentioned limitation because the money in the bank account would have already been settled by the time you want to buy shares (there’s no point to transfer money from an external bank account to the Scottrade Bank account right before purchasing stocks).Of course, having fast fund transfer is one of the benefits, or conveniences, of having a Scottrade Bank account. Just like what I usually do when selecting a bank account, I also want to have the benefit of having my money in the account, i.e., the return of the money. That’s exactly the reason I don’t want to keep any extra money in the brokerage account because I got nothing for having the money there, though I can use the money to buy shares with no restrictions. Unfortunately, the new Scottrade Bank accounts, including checking, savings, CD and Money Market account, don’t impress me in terms of returns. For example, the savings account has a rate of 0.03% APY for balance below $10,000. That’s close to nothing. And if the daily balance goes up to $100,000, the yield is just 0.10%, better than nothing but still.
So basically, the Scottrade Bank account is a better place to park your money that you want to be ready for purchasing shares, cheap or expensive, than the brokerage account, though you still earn almost nothing for your money.
In addition of being a better tool to transfer money between Scottrade broker account and bank account, there are some other features of the new Scottrade Bank account, including
- No monthly account maintenance fees
- Free online bill pay
- ATM fee refunds on cash withdrawals (you will be charged when withdrawing cash using Scottrade debit card, but Scottrade Bank will reimburse the sum total of your transaction charges at the end of the month)
- Free Scottrade debit card
- Convenient local customer support
- FDIC insurance
There’s one condition for the Scottrade Bank account though. The bank account is tied to Scottrade brokerage account, which means that you have to have a Scottrade brokerage account including individual, joint, trust, traditional IRA or roth IRA. So you can’t open the bank account directly without having a broker account first. Scottrade Bank has no minimum account balance requirement.
The initial deposit for the bank account is $100, which is pretty low. And you can fund the new account through a external account. The Scottrade Bank ABA routing number is 081086674.
If you are interested in a Scottrade brokerage account and a bank account, you can open open a Scottrade account using promo code KGKP0724 to get 3 commission free trades.
- 3 free trades
- editor rating4
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