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Zecco.com and I have a pretty long history. I joined Zecco back when it had just started in the 2006-2007 time frame. This was when I was just beginning to learn about investing and trading stocks (I have since changed my investing strategy to a passive investing approach, investing only in index mutual funds. But, that is another story!).
Zecco blasted on to the market with quite a revolutionary concept – commission free stock trading. Naturally, this was the reason that I (like many others) joined! It was hard to believe at that time that a brokerage could be offering commission free stock trading.
Of course, this was back during the “21st Century glory days” of investing, when the market was going higher and higher and brokers were competing desperately for your money. Since that time, Zecco (like everything) has gradually tightened up and increased their commissions to a level that is less enticing than it once was. However, they are still in my mind, one of the better and cheapest discount brokerages around.
Let’s explore some of the details of this “player” in the investing world to determine if it’s right for you.
Account and Investment Options
Through all of the years I have used Zecco, I have just had one account – an individual, taxable, stock trading account.
Having said that, Zecco isn’t without options. Zecco.com has gradually expanded their offerings, and they now feature the following types of investing accounts and investment options:
- Individual and joint taxable investment accounts
- Traditional, Rollover (from 401k), and Roth IRAs
- Just be careful, a $30 per year IRA maintenance fee applies to IRA accounts.
- Stocks / equities
- Exchange Traded Funds (any ETF that is traded on the AMEX stock exchange)
- *New* Mutual funds!
- This is a fairly new feature that was just recently added to the array of investment options at Zecco.com.
- However, before investing in these, be sure to read the fees section below. Trading shares of mutual funds with Zecco involves a $10 commission per transaction (and most of the mutual funds offered have higher expense ratios than equivalent mutual funds at investment houses specializing in mutual funds, such as Vanguard or Fidelity – which are commission free).
- Foreign Currency Exchange (Forex) and Precious Metal trading.
Fees, Account Minimums, and Commissions
With the exception of offering Forex trading, Zecco (thus far) seems pretty much like your standard online brokerage investment firm, offering the typical account types and investment vehicles. However, as is normally the case in today’s environment where firms are competing fiercely for your business by offering lower fees and better account terms, an inspection of the fee schedule is a key step in determining whether Zecco is a suitable match for you.
As such, the details of Zecco’s fee, commissions, and account minimums can be seen in the table at the following link – fees, commissions, and account minimums. A summary of the key points can be seen below.
- This is one of the strong points of Zecco (especially when compared to the $500 account minimum of its closest competitor, which in my mind is Sogotrade), as there are NO account minimums (except for minimums imposed by specific mutual funds that you decide to purchase) and no inactivity fees.
Fees & Commissions
- The commission for buying and selling stocks and ETFs is pretty straightforward, as it costs only $4.95 per trade.
- For options, Zecco’s fee is the $4.95 from above + a fee of $0.65 per options contract.
- For mutual funds traded online, the commission is $10 per trade. However, for broker assisted trades, this fees is almost doubled at $19.99.
- For bonds/CDs, the commission is $4.50 per transaction, with a $22.50 minimum.
Online Account User Experience
Overall, the online investor/user interface offers the essential information you need to invest and manage your money, but does not feature any of the “bells and whistles” that you might find with other brokerages.
For example, if you are looking for automatically generated performance charts, pretty asset allocation pie-charts, etc, then you probably will want to look someplace else!
Shown below is a screenshot of the “Account Overview” screen that pops up when you first log in to your account. As you can see, it is a fairly simple and straightforward interface, with not a lot of distraction. Displayed on this page are the start of day and real time cash balance, market value, total equity, maintained excess (if investing in options), and total remaining account buying power values.
From the main screen, you can then click “Positions” on the left sidebar, and you will be taken to a list of your purchased assets. An example screenshot is shown below.
As you can see from the screenshot above, you are given the typical information about your ETF and individual stock holdings, including last price, intraday change, share quantity, total profit/loss since you first purchased the shares, and the current market value.
Summary / What’s the Bottom Line?
We’ve gone in to a lot of detail in today’s review of Zecco. So, let’s just do a quick recap.
Overall, Zecco offers the various tax-deferred and individual account options that one would expect from a popular brokerage firm (stocks, ETFs, and mutual funds). However, the addition of Forex trading is somewhat unique. If you are looking to do Forex trading, you may want to look in to Zecco.
Zecco’s commissions/fees on buying and selling individual stocks, ETFs, and mutual funds, are pretty competitive compared to the other online discount brokerages on the market today, especially since they do not have a required account minimum. However, they are definitely not the cheapest!
For example, Sogotrade.com offers $3 commission stock/ETF trading. Sogotrade does require a $500 account minimum to open an account. But, if you are looking to invest large amounts of money, you will spend less in commissions in the long run if you choose Sogotrade.
Another “con” of Zecco is their $30 per year IRA maintenance fee. Because of this (and the fact that Zecco charges a $10 commission per mutual fund trade), I would avoid Zecco for retirement investing. Instead, I would open up an account with Vanguard of Fidelity and simply invest in their proprietary, lower-cost mutual funds or ETFs (which one can do with no trading fees incurred and no account maintenance fee).
So, use Zecco if you have less than $500 to invest in a taxable stocks/ETF account, but look elsewhere if you have more than $500 or are looking to open up an IRA.
How about you all? Have you used Zecco.com before? If so, what type of trading did you use it for? Were you satisfied with your experience?
Share your experiences by commenting below!
***Photo courtesy of zecco.com