My Zecco Review
<Update: Zecco has officially merged with TradeKing, and moved to the TradeKing platform – so my recommendation would be to start a new account with TradeKing>
Zecco Review: $4.95 Stock Trades
What follows is a Zecco review based on my personal experience with them, updated for 2012. I maintain my Zecco account to this date.
If you invest in stocks or mutual funds, you know how limiting trading fees can be when you want to buy or sell through your broker. If you like to dollar cost average or simply have smaller amounts to invest, you know how $8.95 (Schwab) or $9.99 (E-Trade) trading fees can cut into your returns. It’s for this reason that I decided to try Zecco, to take advantage of their $4.95 stock trades and free account with no inactivity or maintenance fees.
Discount Brokers I’ve Tried other than Zecco
In addition to Zecco for my personal account, I recently switched my ETrade IRA to TradeKing, who offers $4.95 trades and a no-fee IRA (Zecco’s IRA’s are $30 per year, but non-retirement accounts are free). Both have zero inactivity fees. I had been using Scottrade for my personal account, whose $7 trades were once considered the lowest in the business. However, new competitors such as TradeKing and Zecco have really challenged the industry. I’m a little disappointed that ETrade and Scottrade haven’t lowered their stock trade pricing to stay competitive.
- $4.95 trades is still among the best prices out there (only Optionshouse is cheaper at $3.95). Mutual funds are only $10 to buy into, which is extremely competitive versus other online brokers.
- There are no inactivity or account maintenance fees for non-retirement accounts, a true rarity these days.
- These guys are legit. They are SIPC members and your account is insured up to $500,000 ($250,000 max in securities).
- Their trading tools are very good.
- They have a social network aspect so that you can communicate with other investors.
- Service. The one time I did call for customer service, I was on hold for less than a minute. I spoke with an native English speaking American, and he was extremely friendly.
Where Zecco Reviews Not so Well:
- IRA’s have a $30 annual fee and $30 closing fee. For that reason, I have opted to use TradeKing for my IRA. Note that this only applies to IRA’s, not regular non-retirement accounts.
Who is Zecco a Good Option for?
Zecco is an excellent option for non-IRA stock investments (i.e. for your regular trading account), which is exactly what I was looking for. However, lately, Optionshouse has been the cheaper alternative with a better sign on bonus, so you may want to check them out.
For retirement savings, I would opt for TradeKing because their IRA accounts have no annual fee, zero inactivity fee, and $4.95 trades (I don’t trade much in my IRA, but when I do, I want it to be cheap).
And that concludes my Zecco review.
- Which online broker do you use? Why?
- Do you have any really good or really bad experiences with Zecco or another broker?