Scottrade is Forcing Customers to Use Scottrade Bank
A couple of days ago I received an email from Scottrade notifying me that my check writing privileges for my brokerage account were being terminated due to inactivity for over a year. They nicely recommend that I open a Scottrade Bank Account instead. Ironically, I just recently signed up for check writing privileges about two months ago and have actually used it.
What the local branch says
I called my local branch office to see what the deal was. I was informed by the local representative at the branch that Scottrade is actually phasing out and cancelling all debit/check cards and check writing privileges for their brokerage accounts. Not quite the message I get from the email I received, but I can see why they’re doing this on the down low. The representative briefly tried to up-sell me on opening a Scottrade Bank Account where I can transfer funds easily. Here’s the thing though…
I really don’t need another bank account. I’ve actually been trying to reduce my number of accounts. I have too many bank accounts and do not want to add another one to the list. Currently, to withdraw funds from my brokerage account, I initiate an ACH transfer from my personal checking account with another institution that I’m completely happy with. Now that Scottrade is removing check writing/ACH privileges from the brokerage account, I would have to open up a Scottrade Bank account, then transfer from my brokerage account to my Scottrade Bank account, then initiate an ACH transfer from my personal checking account.
It’s one more step and one more thing to keep a track off that I shouldn’t have to. There are many brokerages out in the market that offer ACH transfers. Some time ago I wrote about how Scottrade implemented a transfer-out fee for the first time in years. Now I know why they did. I explained my opinion to the local rep on the phone and although he didn’t come straight out and agreed, he did say, “I definitely understand and let me just put it this way… I have been made aware [by managers] that this is a growing concern and ummm… well I’ll just leave it at that.” So there’s definitely been some resentment among other customers at Scottrade.
I’m out…
I for one will be transferring my account to another brokerage. There’s plenty of other brokerages out there that are willing to cover my transfer-out fees. Overall Scottrade has been good to me for the past several years, but I’m not liking this new direction they’re taking.
Related Posts:
Print article | This entry was posted by JLR on March 15, 2013 at 10:18 am, and is filed under Money, Personal. Follow any responses to this post through RSS 2.0. You can leave a response or trackback from your own site. |
about 11 years ago
I left them because there was no way for me to withdraw funds unless I got mailed a check. Is this the same as an ACH Transfer? Why wasn’t I able to do this before? Ugh. Liquidated/transferred my account to USAA and got charged a $75 or something fee, of course.
about 11 years ago
They really didn’t push their check writing option on the brokerage service. When I first signed up for it, the local branch tried to convince me to just open a Scottrade Bank account. I asked them straight out, “So you’re telling me that I can’t sign up for it?” They figured I wasn’t going to change my mind so they brought me the right form to get me checks and a VISA/debit card for my brokerage account. When I got the checks, I used the routing/account number at the bottom of the check to set up my ACH transfers with my bank. Now it seems that’s going away.
There’s too many other competitors for them to create an inconvenience when it comes to withdrawing funds. They should make it easier, not more difficult or make you go through other steps. Ironically, I got a call from Scottrade just a couple of hours ago about this blog. The call was from the branch manager and she iterated how easy it is to set up and use Scottrade Bank. I explained to her again (since she read my blog), that I’m not interested in opening yet another bank account, especially for the sole purpose of just withdrawing funds from my brokerage account given that most other brokerages don’t have such a requirement.