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Author: havefunsaving Big red star, 1000 posts Old School Fool Ticker Guide Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 1021  
Subject: Re: Scottrade & Sharebuilder Date: 3/27/2008 9:59 PM
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The thing is that I invest small amounts of money and a $4 transaction fee seems a little better that $7 from Scottrade.

I have an account with both, although I don't much like Scottrade.

The thing you want to look at is the whole picture, not just the commissions.

For instance, I started out with ShareBuilder (SB), planning to only make $4 automatic investment trades. I liked that they allowed fractional share purchases, that they allowed no-cost reinvestment of dividends (I wanted to pseudo-DRIP initially), and they paid a decent return on my cash-on-hand. Scottrade (ST) doesn't allow fractional shares, I don't think they allow reinvestment of dividends, and they pay a pittance on cash in the account.

OTOH, ST allows you to buy lots of mutual funds, whereas SB only allows investing in ING Direct funds.

Now, I find that I like making limit-order purchases. It turns out that just after I opened the ST account, ING bought SB and lowered the real-time trading commissions from about $15.95 to $9.95. I did the math, and figured that with the extra interest I'd earn on my cash in the account, I could make a fair number of $9.95 trades at SB vs. $7 trades with ST, and still come out ahead. I also like the user interface better at SB. But that's just me.

ShareBuilder also posts deposits you make much faster -- usually the next day. Scottrade always puts a 3-day hold on the funds, even if they've cleared the bank sooner than that. I don't like that. A transfer I made from my bank account cleared within hours of requesting it through my ST account. It still didn't post to ST for 3 days.

Transferring your stocks from one to the other shouldn't be difficult. I haven't done it yet (I plan to transfer my ST over to SB soon), but the process is relatively painless. It will take 2-3 weeks to complete, I think, but you can transfer your stocks intact. Any cash will have to be sent to you via check by snail mail. (I've done that, and it was actually handled easily and quickly.)

What you might consider is opening a ShareBuilder account and using it for awhile, without closing your Scottrade account. See which you like better. Then go with the one that suits your needs the best.

Best regards,
Kathie
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