Zecco is one of the most well-known discount brokerage firms because they offer 10 free trades per month to account holders who maintain $2,500 in their Zecco account. Additional trades are only $4.50, which makes Zecco one of the best places to get cheap online stock trades. But there is more to Zecco than just a few free trades per month. I signed up for a Zecco account a few months ago and after using it for awhile, decided to write a review so you can learn more about Zecco’s brokerage firm.
Zecco – king of low cost trading
Fee schedule. Let’s start off with Zecco’s most attractive feature – free trades. Zecco offers all customers 10 free equity trades (stock or ETFs) per month as long as they maintain a minimum balance of $2,500 or more in their Zecco Account. Additional equity trades cost $4.50 each. Options trades cost $4.50 per trade + $0.50 per contract and mutual fund trades cost $10 each. There are no account minimums or inactivity fess to worry about. Here is more information about Zecco’s fees.
How can Zecco offer free trades? Zecco is able to offer free trades because they make money on normally priced trades, options contracts, premium services (see below), and interest on cash that waiting to be invested. They offer some of the lowest rates among major discount brokerages and they are still able to make money – sounds like a winning combination!
Investment Options at Zecco
Investments offered. Zecco gives investors the opportunity to purchase stocks, ETFs, and mutual funds, and investors can trade via options, limit and market orders, etc. Zecco does not offer Treasuries, bonds, or CDs.
Individual Retirement Accounts. Zecco offers investors the opportunity to open Traditional IRAs, Roth IRAs, and Rollover IRAs. Zecco charges a $30 annual fee to manage IRAs.
Dividend Reinvestments. Zecco offers free dividend reinvestments, but you can only purchase whole shares through Zecco, so any portion of your dividend payments left over after purchasing a whole share will be deposited as cash into your account. The good news is that your cash can at least earn some interest while you are waiting to invest it.
Money Market Sweep Account. Zecco offers a money market sweep account so your cash can earn some interest while you are waiting to invest it in the stock market. You will need to request that your cash be added to the sweep fund for this to take effect. Zecco also has a checking account available for a $30 annual fee.
Opening a Zecco Account
Opening a Zecco account was an easy process which only took about 10 minutes. Be prepared to enter all of your personal information, as well as your employment information, stock trading experience, investing goals, etc. These are all standard requirements for opening a brokerage account.
Transferring money at Zecco
Transferring money. You can fund your Zecco account with a check, via a money transfer, or with an ACH transaction. The easiest and cheapest option is an ACH transaction, which is how I chose to fund my account. ACH transactions are free and can be scheduled in advance, so they are the most flexible option. Keep in mind that ACH transactions take a few days to go through. Zecco advertises 2-3 day ACH transactions, but my transfer took 4 days to go through. That’s not a deal breaker in my book, but it is something to keep in mind. Zecco may also place a hold on your transfer while they verify it has cleared. This is common among some brokerages, so keep this in mind when planning your transactions.
Making trades at Zecco
Making trades at Zecco. The Zecco trading interface is very intuitive and easy to use. I have made a few trades already and they were executed as ordered (I made GTC limit order purchases). I am not an options trader, so I can’t give you too much feedback regarding options trading with Zecco. However, I know customers have the ability to perform most common and advanced types of options trades, and there is a learning center feature that offers more information about options trades if you want to learn more information.
Zecco’s Investment Research and Learning Center
Investment research. Zecco provides investors free access to investment research from Standard and Poor’s and a variety of free tools such as an options calculator and options analytics. There are also premium services available for those who are willing to pay for them.
Zecco learning center. Zecco has a host of stock trading and research and analysis tools. However, quite a few of these research and analysis tools are only available for a monthly or annual fee.
Zecco Community
Like TradeKing, Zecco takes pride in their investing community. Zecco’s community boasts almost 100,000 investors and offers investing groups, forums, blogs, and the ability to create your own investor site profile. While I wouln’t lay my money on the line based on a random opinion I come across in a chat room, there is a lot to be said about the community experience. The key is to learn to read with a filter.
Zecco Customer Service
Zecco offers e-mail and telephone support through a free customer service number – 1.877.700.7862. Unfortunately, Zecco does not offer a live chat support, which is a nice featured offered at some other brokerages such as TradeKing. Zecco’s FAQ section can take care of many questions, but if you need immediate assistance, you will need to call between the hours of 9am-6pm est, Mon-Fri.
Security and insurance
Your money is safe with Zecco. Zecco is a member of Financial Industry Regulatory Authority (FINRA), which is the largest non-governmental regulator for all securities firms doing business in the United States. Zecco is covered by the Securities Investor Protection Corporation (SIPC), which is an organization that acts as insurance against your broker filing for bankruptcy or otherwise going under. Funds are available to meet customer claims up to a maximum of $500,000 in cash and securities with a $100,000 cash maximum. Zecco has additional coverage from Lloyds of London insurance and is secured through a VeriSign SSL Certificate to assure your confidential information remains secure.
Trading Key. Before making a trade, Zecco members must enter a trading key – this is a separate step that occurs after logging in to their account. This prevents unauthorized users from causing some major damage to your account.
Other features at Zecco
Premium investing tools. If you are a day trader, you will want a tax planning tool to help you make the best decisions regarding which shares to sell for the highest tax efficiency. Zecco has the Gainskeeper tool for just this purpose, which is free for the first 2 months, then $24.99 every 6 months after that. While some people may scoff at the idea of paying $50 a year for a tool offered for free at some other discount brokerages, the cost averages out to roughly the cost of one trade per month at those same brokerages. So if you are active trader, you will more than come out ahead due to the 10 free trades you will receive monthly.
Account records. Zecco keeps their costs down by automatically enrolling you in e-statements. You can receive paper statements for a fee.
My overall opinion of Zecco
I think Zecco is a quality trading platform, which certainly can’t be beat for the price. Zecco is a felxible brokerage and will meet the needs of many different types of investors – from the investor who buys and holds ETFs (such as myself) to the day trader who makes dozens of trades in a month. The biggest complaint that some people have is the additional expense of certain premium tools. But in my opinion, if you are trading often enough to need those tools, you are most likely saving a lot more money based on the average trade commission with Zecco compared to the average trade at another brokerage.
Other brokerage reviews: How to choose and online brokerage, Sharebuilder review, TradeKing review, Zecco, ShareBuilder, and TradeKing comparison, Free Stock Trading and Investing Tools.
{ 8 comments… read them below or add one }
Yeah, i’ve heard nothing but great things from Zecco actually
I’ve stopped dabbling in stocks myself (i get super crazy buying and selling and all sorts of junk), but if i ever get back into it i’ll be sure to use them.
nice breakdown and all!
Thanks, J. Money. It’s not just stocks though – you can fund your IRA with ETFs or mutual funds, and it is much cheaper than going through many other brokerage firms.
I have a sharebuilder account and they offer fractional share purchase facility. What about zecco ??
Raj: Zecco does not offer a fractional share purchase. That is one of the benefits of ShareBuilder for making automatic investments and reinvesting dividends.
Zecco’s strong point is the 10 free trades per month with a portfolio of $2,500 or more. It depends on which feature is more important to you to determine which broker is better – it’s all based on personal needs.
As of March 1st, the minimum for the free trades will be $25,000 rather than $2,500.
Worth bearing in mind.
Zecco also does not offer after hours and pre-open trading like many other brokers do.
Good point, Eric. For the casual trader looking for a once a month ETF trade or similar low volume trades, Zecco was a great option because of the free trades. They are still a good option, but now that the restrictions for free trades are tighter, I think I’ll stick with TradeKing (by the way I put myself completely in the casual trader status; I am by no means an advanced trader).
Zecco is a joke! Its 25k for free trades not 2,500…BTW they’re software is awful…