»How to open a Scottrade brokerage account online
Tits last sunday i opened a Scottrade online account. It took about 10 minutes and the process was very easy. This account is for a SEP IRA, although the process is pretty much the same regardless of what type of brokerage account you open. In this article, we’ll walk you through what you need to open a Scottrade account and outline the process. However, let’s start with the reasons why I chose Scottrade.
While there are many good online discount brokers to choose from, Scottrade had several advantages. First of all, Scottrade offers a SEP IRA account. While most brokers today offer traditional, Roth, and rollover IRAs, not all brokers offer a SEP IRA. So that restricted my selection. Second, Scottrade doesn’t charge any fees for an IRA account, which is a plus. Scottrade is not alone in this regard, and you can check out our review of some of the best brokers for IRA accounts.
Third, Scottrade has offices all over the place. While the vast majority of my transactions are done online, it’s nice to know that I can visit an office and talk to a real person if needed. And finally, Scottrade is known for its quick execution of trades at the best price. Now let’s move on to my experience opening a Scottrade account. If you want more information about Scottrade, visit our in-depth Scottrade review.
First of all, the only negative experience with Scottrade
Let me start with the one problem I encountered with Scottrade. Several times during the application process, I clicked the next button to go to the next step in the process, but nothing happened. It was if the next page didn’t load. Now the problem could very well have been my internet connection, but I suspect not. In each case, I clicked the button again and eventually the application continued without any issues. Still, it was an annoying problem.
What you will need to open a Scottrade broker account
The information you will need to open a Scottrade account is the same as for any other broker account. But some information may surprise you.
- About 10 minutes to open your new account
- Social security number or individual tax identification number
- Employer’s name, address and telephone number
- Beneficiary’s social security number, address and date of birth (IRA only)
At first I thought it was a little strange that Scottrade needed information about my employer. As it turns out, there are a number of reasons for this, including if you work for a stock exchange, FINRA, or some other securities industry regulator.
One of the useful features of the Scottrade application process is the ability to chat online with a Scottrade representative. I took advantage of this feature for several reasons, including asking them why they needed information about my employer. Here is their response:
That’s a good question! Under current regulations, we are required to “know our customer” and obtaining your employment status is part of meeting this requirement. Please note that we take the privacy and security of your personal information very seriously. Our website is secure. We do not sell or share your entered information and we will not contact your employer. Please complete the fields to the best of your knowledge and click “Continue” to continue.
In addition, you will need to know the type of account you are going to open. Scottrade offers the following types of brokerage accounts:
- Individual brokerage account: Manage your finances with our Individual Brokerage Account. Includes online trading, instant finance and cash management features.
- Joint brokerage account: Up to three people can manage their finances with our joint brokerage account. Includes online trading, instant finance and cash management features.
- Individual retirement account (IRA): Save and grow your retirement assets with our IRA accounts. Provides for tax-deferred growth and potential tax-deferred contributions.
If you select the IRA account, then you will have the option to select the type of IRA you want to open.
Select the nearest Scottrade office
As part of the application process, Scottrade gives you a list of its offices closest to your home. You select from the list the office to which you wish to associate your account. About two days after I submitted my application, the Scottrade office manager called me to see if I had any questions. He didn’t try to sell me anything. He just introduced himself, asked if I had any questions, and encouraged me to call him if any questions arose. It was a nice touch.
Once I entered the required information, Scottrade asked me to check a few things on my credit report. The idea here is to verify my identity, kind of like myFICO done when you apply for your credit score. There were only two questions, one asking who my mortgage was and the second asking how much I paid.
Option trading privileges
As I plan to buy and sell options, a few more steps were needed. This included an option trading deal, selecting the types of options I planned to trade, and information about my income and net worth. These are all required under federal law. Of course, if you don’t plan on trading options, you can skip most of these steps.
The whole process took about 10 minutes. I must print, sign and mail an acknowledgment of receipt stating that I accept the Scottrade brokerage contract. I will fund my account by wire transfer and trade stocks and options on Scottrade in no time.