SmartMoney’s Top Online Broker for 2008
I’ve written in the past about the best online discount brokers, and I also did a preview of SmartMoney’s best and worst broker ratings. However, I completely forgot to wrap it up the SmartMoney business with a discussion of the top overall broker in their competition, so… Here goes…
While TradeKing took top honors as best discount broker in each of the last two years, they fell back to third place this time around. To be fair, this was most likely due to a change in the ranking scheme. While SmartMoney used to split brokers into three categories (Premium, Full-Service, and Discount), they’ve started throwing everything into one big category. As such, TradeKing is now competing against the higher-end outfits, and they fell down a few pegs because they don’t offer banking services.
So, with TradeKing out of the way, who took top honors? If you’ve read my earlier coverage of the SmartMoney competition, you won’t be too surprised to learn that E*Trade wound up ranked as the #1 overall broker. E*Trade actually offers a nice combination of (relatively) trades, good customer service, and integration with their online bank.
Here’s a complete rundown of SmartMoney’s rankings:
Disclaimer: Discover is a paid advertiser of this site.
Reasonable efforts are made to maintain accurate information. See the Discover online credit card application for full terms and conditions on offers and rewards.
Modified on September 4th, 2009 - 10 Comments
Filed under: Saving & Investing
About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!
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July 11th, 2008 at 4:32 pm
Now, if only the E-trade stock (ETFC) would go up. I’ve lost a small fortune on that stock.
July 11th, 2008 at 11:59 pm
I’m glad to see ETrade ranked number one. My main brokerage account is there and I have actually been consolidating my other brokerage accounts into it lately. I really love the entire interface, the execution, the services, and the customer service has been good for me. I have a lot of money with them so I get a special number to call and never get put on hold, which I heard they can be bad with. And the fact that you can put your uninvested cash into a savings or high-interest checking account instead of having to sweep it is great. I think the E-Trade checking account pays more than the savings account right now (as a promo).
My big concern with E-Trade though is their sustainability. With Citadel holding such a large stake in them and being on the board it makes me much more comfortable, but they are not immune from going bankrupt.
July 12th, 2008 at 11:09 am
I am with Scottrade and the thing I really hate about them is that they refuse to reinvest your dividends. So the dividends just sit there in a low interest account.
Does E-Trade allow you to reinvest the dividends?
Also, I’d be interested in E-Trade if they allow you to sweep the dividends into a 529 College Savings Plan. Do they do this?
July 13th, 2008 at 3:25 am
I’ve been with E*Trade for several years and have been pleased with their performance. I’ll echo TSModie’s comments about site usability and performance, banking options, and customer service. I don’t have huge sums there so get “regular” treatment, but rarely have to wait long, and the agents on the other end have been generally knowledgeable and helpful. On the banking side, they’ve consistently offered reasonable rates – if a fraction below the weekly rate-chaser specials at some outfits – for both checking and savings, and fast transfers. Brokerage and bank balances are combined for determining interest rate tiers, which makes it easier to get the top rates.
Re. dividend reinvestment – my mutual fund dividends are reinvested automatically. As for stocks, I’ll let someone else take the question.
July 14th, 2008 at 11:28 am
I am a big fan of Firstrade and am very happy to see that it has beat Scottrade, which I had used in the past.
@ Maryanne: You should consider transferring to Firstrade. They have similar, and slightly cheaper, commission rates while offering more features such as free DRIPs.
July 14th, 2008 at 1:00 pm
Maryann: I have an account with Scottrade (for a mutual fund, AIVSX) and they reinvest dividends for free without any problem.
July 14th, 2008 at 1:55 pm
I currently don’t have an online brokerage account, but I do plan to open an account with Scottrade in the future. I keep meaning to but haven’t gotten it done yet.
July 16th, 2008 at 4:57 pm
Scottrade does not allow you to reinvest dividends on stock.
I really wish they would pay a higher rate on the cash account. Currently I think it is somewhere around 0.10 while Etrade is around 3.25 or so. Big enough difference there for me to consider transferring.
July 16th, 2008 at 7:33 pm
Titleist, Does e-trade allow dividend reinvestment on stocks?
July 18th, 2008 at 12:06 pm
I hope everyone is using their online brokers to invest with a few ETF’s that mimic a good bond index, a US stock index and an international stock index.
If you are buying and selling individual stocks, good luck. But over the long haul you are not going to succeed. Well, maybe a very few of you will do OK, but the vast majority will not match the returns of the market.