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Zecco Discount Brokerage Review

by Ryan Guina

Note: Zecco has recently announced they will merge operations with TradeKing, another online brokerage firm. These brokerages have very complimentary features and prices. The new company will be known under the TradeKing name, and we recommend reading the TradeKing review for more information.

Zecco is one of the most well-known discount brokerage firms because they offer have an award winning trading platform, a variety of features, and competitive pricing. They launched several years ago with a splash when they offered free stock trades. Zecco no longer offers free trades, but their pricing tiers are competitive with all the major players in the industry, and in many cases, are quite a bit lower.

Zecco Review – King of Low Cost Trading

Zecco Trading ReviewIndustry Awards. Zecco has received several awards for their trading platform, commissions, and other features. Zecco has received high rankings in the annual brokerage reviews performed by magazines such as Kiplinger’s, SmartMoney, and Barron’s.

Fee schedule. Let’s start off with one of Zecco’s most attractive features, and something people almost always look at first – pricing. Zecco offers standard stock trades for a flat $4.95 per trade, with $0.65 options contracts. Penny stocks (defined as those which cost less than $1 per share) cost a flat $6.95 per trade, which is a better pricing plan than many competitors, which charge a penny per share (which adds up quickly if you are buying or selling thousands of shares). There are no account minimums or inactivity fess to worry about with Zecco.

Investment Options at Zecco

Investments offered. Zecco gives investors the opportunity to research and purchase purchase stocks, ETFs, and mutual funds, CDs, Bonds, foreign currencies and precious metals. Investors can trade via options, market and limit orders, trade on margin, etc.

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 or other financial 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 also offers free incoming ACAT transfers if you wish to transfer your funds from your old brokerage account to your new Zecco account (keep in mind some brokerages charge outgoing ACAT transfer fees).

Making trades at Zecco

Making trades. Zecco recently launched an updated trading interface which is very intuitive and easy to use. I have made a few trades already and they were executed as ordered. 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 investing tools such as an options calculator and options analytics. There are also premium services available for those who are willing to pay for them. Among the options available to all Zecco members are the Zecco Streamer (pictured below), screening tools for stocks, ETFs, and mutual funds, quotes and research tools, tools for building your options strategy, GainsKeeper for tracking your gains and losses for tax purposes, and more.

Zecco Discount brokerage review

Zecco Streamer

Zecco Community and Education Center

ZeccoShare Community. Zecco offers a unique feature among discount brokerage firms – they have an investing community, ZeccoShare, which boasts over 100,000 investors and offers investing groups, forums, blogs, and the ability to create your own investor profile. There is a lot to be said about the community experience, especially if you are a beginning or active investor.

Zecco learning center. Zecco has a host of stock trading and research and analysis tools. The research tools and tutorials cover topics pertinent to beginning investors as well as advanced investors, and many of these tools are available to the public for free, regardless of whether or not you have a Zecco account.

iPhone App, Zap Trading and other Zecco features

Zecco iPhone App

Zecco iPhone App

Zecco iPhone app. Zecco recently released their free iPhone app, Zecco Mobile Lite, which is already among the highest rated investment apps in the iTunes store. The iPhone app also works on the iPod Touch and iPad. The good news is that anyone can use it for stock research, updates, tracking your portfolio, maintaining a watchlist, real time streaming quotes, and free push alerts. The downside to the app is that you can’t make trades from it at this time. And if you’re like me and have an Android based phone, then don’t worry – the Android app is currently in development, but the Zecco rep I recently spoke with wasn’t allowed to give me a launch date at this time.

Zap Trade. This is a truly unique feature which Zecco holds a patent to, so you won’t see it elsewhere. Zap Trade is a FireFox browser plugin which gives you the power to make trades from any web page once you are signed in. Zap Trade will automatically scan the website you are visiting and highlight any ticker symbols to give you easy access to more in-depth research on that stock, or the ability to trade that stock from that page. It’s a powerful tool for traders who know what they want.

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 offers a free integrated cost basis tool for all shares purchased in 2011 and going forward. Zecco also offers Gainskeeper, which is an industry recognized tool for tracking cost basis. There is an associate fee with the latter tool.

Account records. Zecco keeps their costs down by automatically enrolling you in e-statements. You can receive paper statements for a fee.

Zecco Customer Service

Zecco has excellent customer service that offers e-mail, live chat, and telephone support through a free customer service number – 1.877.700.7862. 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.

My overall opinion of Zecco

Zecco is a quality trading platform, which certainly can’t be beat for the price. Zecco is a flexible 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.


Published or updated January 25, 2013.
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{ 15 comments… read them below or add one }

1 J. Money

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!

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2 Ryan

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.

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3 Raj

I have a sharebuilder account and they offer fractional share purchase facility. What about zecco ??

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4 Ryan

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.

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5 zecco user

As of March 1st, the minimum for the free trades will be $25,000 rather than $2,500.

Worth bearing in mind.

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6 Eric

Zecco also does not offer after hours and pre-open trading like many other brokers do.

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7 Ryan

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).

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8 ClubbieTim

Zecco is a joke! Its 25k for free trades not 2,500…BTW they’re software is awful…

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9 Brett

I recently opened an account at Zecco after reading some positive external Reviews and the 10 free equity trades per month is nice. However, I’ve never experienced worse execution; the platform is a joke…looks like it was programmed you know where. Customer service is more like an HR complaint line than a ‘let’s resolve the issue’ department. The whole brokerage just feels like an MBA project that got a C- but was launched anyways. They erroneously executed a covered call for me at the worse execution I could ever imagine. Now I have to wait 6 weeks to earn $-3 for this trade. I even had a limit order in but they couldn’t handle it.

Let us get one thing straight: The only people who should use Zecco are LONG ONLY investors with less than 10 trades per month. No one else should touch this joke of an organization. I should have steered clear. I’m going to OHouse ASAP.

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10 Melissa

Brett-
What is OHouse? I did a google search and didn’t come up with anything.

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11 Ryan

Melissa, OHouse is OptionsHouse. You can compare it along with other discount brokers here: Best Online Discount Brokerage Firms.

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12 Jurrell Kemp

seems interesting would you prefer Zecco or E-trade which one do you believe would be the better choice to handle all of my trades?

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13 Ryan

Jurrell, it depends on what you are after. E*Trade also offers a full service bank, so if you prefer to have all your money under one roof, E*Trade is a good way to go. Zecco has cheaper trades, though, so if you are a frequent trader, Zecco may save you money.

Here is a list of reviews, which may be helpful:

discount brokerage firms.
Best IRA Brokerages.

Best of luck!

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14 Jurrell Kemp

Thanks Zecco it is then :-)

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15 addictedtocars

I have been with Zecco for 5 months now and it has been bumpy and now gone bad. They lure you in with a nice web site and free trades, but once you are there it is painful! First the web site would be great if it was not so buggy and slow. They routinely fix one bug to only bring back another. Their first reaction is to tell you to try another browser and be warned their web site performs better with fire fox than anything else, but it still has bugs. They you have the steady declining customer service. Also as of March 2011 the free trades are gone and they raised their rates. Couple that with Penson as their clearing house and you now have a disaster in the making. On numerous occasion Penson has had to retract and repost dividends for various securities in my account, I also caught them on several occasions shorting my dividend by $.01. Sure $.01 is not a big deal to me, but think about how all that skimming ads up. Then in today’s electronics systems how can it take 6 weeks to get out a 1099 then over 2 weeks later (after I already filed my taxes) send me an updated 1099 with different numbers forcing me to for the first time in over 28 years have to file an amended return! All I can say is run as far away from Zecco and in addition any firm that using Penson as their back end.

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