Just discovered problem with Scottrade

[disneysteve]

I just learned of a kind of significant problem with Scottrade. With my old broker (Olde which became H&R Block which became Ameriprise), I could make a trade and bring in the money before the settlement date. The money didn't have to be in the account at the time of the trade. Scottrade doesn't work that way. The money needs to be in your account BEFORE you make the trade. I think they do that to discourage day trading, but it is kind of a pain if you want to jump into something quickly and don't have the available funds in the account. I can do a transfer from my bank, but that takes 3 days.

[Bernz]

Steve, I have switched to Scottrade about 3 years ago and I do have the same issue with them. Luckily, my wife works at a Bank and I usually use their bank to wire money. Money shows up the same day and wiring fees are waived as part of my wife's bank benefits. But you're correct my old broker would allow me to trade before the settlement date as well.

[Broken Arrow]

Unless the rules have recently changed, you can buy before the funds are settled, but not sell. I've done that plenty of times before.

[disneysteve]

Unless the rules have recently changed, you can buy before the funds are settled, but not sell. I've done that plenty of times before.

Good to know.

[tripods68]

Unless you have a margin account option, they won't let you trade. But most investors, trade ONLY on cash-basis like I do with Ameritrade.

The T+3 rule (3 business day to settle a trade). I don't like this rule...but it is there for a reason.

[Broken Arrow]

Unless you have a margin account option, they won't let you trade. But most investors, trade ONLY on cash-basis like I do with Ameritrade.

The T+3 rule (3 business day to settle a trade). I don't like this rule...but it is there for a reason.

Right! And for that matter, the rule should apply to just about any other brokerages out there. Short of using a margin account of course.

[buzz]

I could be wrong, but I thought money transferred into your Scottrade account was available immediately.

ETA:

Easily, quickly and securely transfer funds online into your Scottrade account(s). Money Direct (ACH) facilitates same-day online fund transfers from your bank into any of your individual, joint, IRA, ESA or SEP accounts with Scottrade.

Link

[tripods68]

I could be wrong, but I thought money transferred into your Scottrade account was available immediately.

ETA:

Easily, quickly and securely transfer funds online into your Scottrade account(s). Money Direct (ACH) facilitates same-day online fund transfers from your bank into any of your individual, joint, IRA, ESA or SEP accounts with Scottrade.

Link

Read the remaining of that link.

If your bank participates in an ACH network or if you're a first time Money Direct user whose account is verified by instant account verification, you can use Money Direct and transact the same day. If you use the challenge deposit method, you may have to wait up to three business days.

[disneysteve]

I've used Money Direct before, so maybe I could transfer and trade right away. Maybe that isn't a problem after all, as long as I have the funds in my checking account (which isn't always the case). Still, it would be nice if I could make the trade first and worry about getting the money to them after that, like I could before.

[kv968]

I've done ACH transactions into my Scottrade account and the money posts and is available for trading within minutes. I do think that they put a restriction on the money until it clears though if you want to buy stocks that trade under a certain price. I think it's anything under $5, which in this market can be quite a few

The main thing I don't like about Scottrade is that they don't do dividend reinvestments although I hear they were thinking of changing that. I guess you can't ask for too much with a discount broker.