Note: Zecco merged operations with TradeKing in 2012. TradeKing is another well-respected online brokerage firm with complimentary features and pricing. The new company was run under the TradeKing name. TradeKing was acquired by Ally Bank in 2016, merging their brokerage under the Ally Invest name and the Ally brand. You can now link your Ally Bank account and Ally Invest brokerage under the same login. Ally Invest has taken the best features from Zecco, TradeKing, and other platforms and merged them into a best in class trading platform. We recommend reading the Ally Invest review for more information about their trading platform.
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
Industry 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 stocks, Exchange Traded Funds (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 a Roth IRAs, Traditional IRAs, and Rollover IRAs. Investors can also open a Coverdell Education Savings Account, which is often referred to as an Education IRA, due to its similar tax rules.
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 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 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. Zecco is registered with Finra.
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.
Securely link your Zecco account. You can create a secure connection from your Zecco account to a third party financial institution such as your bank or another investment platform. You can also securely connect to app, such as Yodlee, Quicken, Mint.com, and Personal Capital.
How Does Zecco Compare to Competitors?
Zecco has all the features most investors need to be an informed investor. And trades are quick and easy on the Zecco platform. The biggest difference maker for most investors will be either pricing, or ability to link their investment account with a bank. For example, some of the larger discount brokerage firms also have a bank, including Capital One Investing, E*TRADE, and TD Ameritrade.
This makes it convenient to transfer money in and out of your investment account. However, individual stock trades are almost twice as expensive at E*TRADE and TD Ameritrade, and slightly more expensive at Capital One Investing. So you would need to determine whether or not that convenience is worth the added cost. It’s probably not a big deal if you only make a few trades per year. But it adds up quickly if you dollar cost average into investments, or make frequent trades.
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.