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Zecco Discount Online Brokerage Account Opening Review

This article was written by in Investing, Reviews. 8 comments.


Zecco is a discount online brokerage offering trades for $4.50. I decided to open an account with Zecco recently to try my hand with stocks with a small amount of “fun money.” Trading stocks, not to mention options, is a risky way to manage your money, and I prefer to buy mutual funds and hold them for as long as possible.

I did, however, put some money into Toyota Motors in the midst of the media frenzy surrounding the company’s recalls. I’ve made about $20 after fees on that purchase so far. This would have been more if I had traded with Zecco’s lower-cost brokerage.

With any investment over the long term, fees have the most detrimental effect on your returns. To increase your chances of success, reduce or eliminate those fees by using a discount brokerage.

Opening a Zecco Discount Brokerage Account

To open your account, begin by creating your online profile. I had a profile I created several years ago, so I logged in and selected the option for opening a trading account. At the beginning, I was able to choose to make several account selections. First, I designated the trading account as an IRA, individual account, or joint account. I then chose whether I wanted to trade on margin or not. Trading on margin, borrowing money from the brokerage to make investments, is a risky move.

Trading options with ZeccoDo you want to trade options? Zecco offers options investments, although these will not qualify for commission-free trading. I signed up for Level 2 trading privileges. This will be my first experience with options if I choose to test the waters.

After selecting the configuration for my trading account, Zecco asked for my personal information like address and Social Security Number. I was required to enter my annual income, net worth, and some other details about my experience with stocks and mutual funds and my investment objectives. After this, I entered the routing number and account number for my funding source, my ING Direct checking account.

The next step involves agreeing to Zecco’s terms and conditions and providing an electronic signature. Zecco informed me the approval process could take 30 minutes or longer, and not much longer, I received an email to notify me my application has been approved. I still needed to wait a few days to receive trial deposits in my ING Direct account.

I received those trial deposits yesterday and proceeded with funding the account with an initial deposit. I’m waiting for the funding to reach Zecco before deciding how to experiment with this new account.

I’ll reserve my final judgment on Zecco until I’ve had the opportunity to trade a bit. If you are a customer of Zecco discount online brokerage, what do you think about your account?

Updated August 23, 2011 and originally published March 24, 2010. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 8 comments… read them below or add one }

avatar Craig Schroeder

Zecco had my money locked up for a year without my being able to touch or trade, because my *brother* is a stock broker. They were requesting that his employer provide them a 407 letter for *me.* Of course they refused, and then it took Zecco a year to finally break down and give me back my money once I sent them a letter declaring that my brother did not live with me and was not my dependent. Freaking ridiculous.

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avatar BrIan

I like mine for the most part, especially since I made around 40% on my account last year! I have pulled it all out at this point though to pay off a credit card, but I plan on building up some more fun money in the coming months to start again. It’s really no frills and I wish Zecco had an iPhone app because that would make trading a little easier. However, that’s really the only complaint I have. Trades seem to be very quick and almost always at the prices I expect.

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avatar Investor Junkie

“I’ve made about $20 after fees on that purchase so far.” $20 Seriously? I’m not mocking you for investing, everyone has to start somewhere. Don’t take this comment the wrong way.

I’m just wondering for amount of shares/dollars you are talking about, why not continue investing in index funds? For the amount of money invested you are not being diversified. Knowing your NW and amount invested in the market, what advantage do you have investing in stocks at this moment? Unless your are talking about a pure speculation account. Which again at your NW, which is normally no more than 5% of your investments, would be a very very small amount.

Unless you are doing this to help improving your trading skills and putting your toe in the water.

Same as you mentioned in your tweet about using options. Unless you are doing some sort of hedge (again the amount of money your talking about for say Toyota isn’t that much), why not put a stop loss order in instead? Again unless you are only educating yourself about options. IMHO options for anything else is pure speculation and it appears you don’t have the NW yet to warrant the risk taking.

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avatar Luke Landes ♦127,505 (Platinum)

I’m talking about ten shares in TM. This is a tiny portion of my total investments, which are almost all in index funds, or in the case of my 401(k), an aggressive combination of large cap, mid cap, small cap, and international funds. Anything I do with stocks or options would have just a small effect on my overall diversity and allocation.

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avatar Investor Junkie

I agree it’s a small amount. But is then for education purposes then? Or are you really hoping to make a killing with such small transactions?

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avatar Luke Landes ♦127,505 (Platinum)

Yes, I’m doing this just for educational purposes. I don’t expect to make a killing.

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avatar Scott

I opened an account with Zecco when they first got going but did a majority of my trading with a different brokerage. It was a hassle having multiple brokerage accounts, so I decided to consolidate them with a single brokerage, and I ended up choosing Zecco.

The Good:
Two accounts that qualify for 10 free trades each, an individual and an IRA.
Paperless statements.
BOA checking account linked for easy transfers.
Everything can be handled through email – no faxes, notarizations, etc.
BONUS: Account transfer fee reimbursment – $75/account.

The Bad:
$30 yearly maintenance fee for IRA account.
Website layout could use a little more polish.
Have to subscribe to Gainskeeper tool if you want to track gains/losses. ($50/year)
Tax documents could be improved.

I look for the cheapest way to do things and Zecco is hard to beat.

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avatar Dave

I used to have Zecco. After all the changes that was happening I couldn’t handle it. I moved to Scottrade and I love their system over Zecco. I wish I would of moved years ago. Thank you Zecco for changing your fees so much. Otherwise I wouldn’t of gone to Scottrade.

Scottrade has a new 2011 and 2012 referral code that will get you 3 free trades when you open any type of account.

Scottrade referral code: (3 free trades for you and also me)

I love Scottrade’s new streamer they came out with. Very nice system..

Dave

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