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Zecco Review and Account Opening Process

Written by Nickel - 16 Comments

Over the weekend, I opened an account with Zecco. I’ve been meaning to do this for quite some time, but never found the time to do so. In case you’re not familiar with Zecco, they burst onto the scene back in July of 2006. Their name, which stands for “Zero Commission Cost,” pops up in pretty much every discussion of the best online stock brokers, so I thought I’d check them out.

Advantages of Zecco

The primary advantage of Zecco is, not surprisingly, cost. They currently offer up to ten free trades per month as long as you maintain a balance (include stock holdings) of at least $25,000 (there’s no minimum to open an account). Otherwise, trades will cost $4.50 — still pretty darn cheap. Options trades go for $4.50/trade + $0.50 per contract.

What’s the catch?

According to there site, there is no catch. They say that they can give away free trades because: (1) it’s cheap to run an online broker, and (2) they make money on interest income and options trades. They have, however, been criticized for poor customer service and a lack of fancy trading tools. That doesn’t really concern me, as I’m primarily interested in using them to buy (and hold) ETFs.

Opening an account

Given the above, I decided to give Zecco a try. What follows is a walk-through of the account opening process. All told, it took less than 10 minutes to set up a joint account. It would be even quicker for an individual account.

Step 1: Initiate your application.

Simply visit Zecco and click the “Open an Account” button. You’ll be greeted with a page that looks something like this:

Simply enter your desired username, etc. and click “Sign Up.”

Step 2: Enter your personal information.

You’ll next be asked to provide some personal information…

…and provided with an opportunity to enter a Zecco promotion code. Unfortunately, I haven’t run across anything particularly valuable, so I didn’t bother.

On the next screen, you’ll be asked what sort of account you want to open. If you select “Joint,” then you’ll have to supply information about the co-owner.

Next up… Contact info for both you and the account co-owner (if applicable), followed by a request for your social security number(s). They also ask some questions about your employment status, income, and net worth, as well as a standard set of conflict-of-interest question that are required by the SEC.

Step 3: Account settings and funding options.

Finally, sign yourself up for paperless statements and paperless trade confirmations (if you don’t, you’ll face fees of $2/paper statement and $1.50/paper confirmation) and then choose your funding option. We went with ACH, so we’ll have to wait a couple of days for the trial deposits to be made.

Almost done… Just agree to their terms and conditions and then verify all of the information that you’ve entered. That’s all there is to it.

Our account was approved within a few minutes, and is now up and running and fully accessible. That being said, there’s not much more I can do at this point until the trial deposits arrive. At that point, I’ll just hop back on over to Zecco to verify the amounts. Once that happens, I’ll transfer some money and poke around a bit more.

Published on January 20th, 2009
Modified on March 25th, 2009 - 16 Comments
Filed under: Reviews, Saving & Investing

About the author: is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!

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16 Responses to “Zecco Review and Account Opening Process”

  1. 1
    Craig Prickett Says:

    How did you find the opening process as compared to other brokers? Easier, harder, a non issue and therefore a good thing?

  2. 2
    Ben Says:

    I’ve been using Zecco for a year now and love it. I’ve never paid a fee to buy/sell or for anything else for that matter.

    My experience with customer service has been pretty decent and they’ve certainly ranked much higher than other financial institutions I’m using.

    I’m glad you opened an account with them and for the same reason I did non-the-less.


  3. 3
    Richard Reyes Says:

    Guys take Zecco for what it is. Their business model is no different than Schwab, TD Ameritrade, etc. IT IS NOT FREE. Don’t be so ignorant. If it was FREE how would they be able to do business.

    They make money on the spread between Bid/Ask and also on the spread of money market and other products. And you are paying for this. You are just not seeing it. You are not trading for free.

    However, this is a great place to own a portfolio if you are indeed using a properly allocated portfolio of index funds. It does make perfect sense, especially if you a dollar cost averaging into ETF’s.

    Richard Reyes

  4. 4
    nickel Says:

    Craig: It was a bit easier than opening an E-Trade account, though E-Trade is also a bank, so the requirements are slightly different. I’ll probably open accounts with the other major online broker just to compare.

  5. 5
    nickel Says:

    Richard: All brokers make money on the bid/ask spread. Do you have any evidence that the bid/ask spread is greater with Zecco than elsewhere? If not, then stock trades at Zecco really are “free” in a comparative sense (or at least the first ten are, assuming that you’ve satisfied the minimum balance requirement). Note also that I also directly addressed the fact that they make money on interest (on idle money) as well as through the trading of options and stock trades in excess of 10 per month. Of course they make money. “Don’t be so ignorant” and think that making money and offering a portion of your services for free are mutually exclusive. They’re not.

  6. 6
    thomas Says:

    it’s amazing how far we have come as far as the cost of making a trade. Even if the spread was $.02 greater than others, the cost for transaction is lower for the amount of shares purchases (I’m assuming we aren’t in the 300+ share purchasing category).

    Thanks for the review.

  7. 7
    Gabriel Dalporto Says:

    Hello Richard,

    We saw your comment about Zecco Trading trade execution. Normally, quality trade execution doesn’t go together with the lowest commissions in the industry, but with Zecco Trading you get both. We’re tracking our scores right against the industry averages on our new trade execution page: http://www.zecco.com/trading/tradeexecution.aspx

    Check it out, we hope it’ll help clarify where we stand.

    Gabriel Dalporto
    CMO, Zecco Holdings, Inc.

  8. 8
    the weakonomist Says:

    If I ever start trading outside of my Roth IRA again, I’ll be sure to check out Zecco. They sure as hell beat sharebuilder, my current stock trader.

  9. 9
    Swamproot Says:

    I opened an account with them back in September. I only recently built up to a $2400 balance so I haven’t got the free trades yet, but I moved from Sharebuilder because I would rather pay $4.50 for a trade I could make on any day at any time, than $4 for a trade only on Tuesday that I couldn’t get limit orders on. If you buy with limit orders it would seem the bid-ask spread is irrelevant because your still getting a stock for the price you say you want it for.

    I expected a little more from the trading interface. It is a little confusing and I’m finally getting used to it and getting around OK now. They also have you fill out and fax or snail mail a lot of forms, such as the one that sets your sweep account up as a money market account with higher interest than the default sweep account.

    My only non-interface problem so far has been that I had an ACH deposit to Zecco processed twice and they dinged me for an NSF. But an email to customer service was quickly answered and the NSF charge reversed.

  10. 10
    Danielle Says:

    I read around on their site a bit but was unable to determine… can you invest in college savings plans of any kind out there (529 or coverdell)?

  11. 11
    thosspot Says:

    Well, it’s not free anymore, or at least not free for an account balance under $25,000. Trades are now $4.50. Still cheap, but not free.

  12. 12
    Frank Says:

    Be careful with Zecco. In two separate months they charged me margin interest, though I made no marginable trades. The second month, there was NO activity at all & they charged my account interest as well as issued a margin call! Very scary.
    I transfered out to TradeKing. So far, this was an easy application & quick transfer process. But option trade executions seem to be very slow.

  13. 13
    JJ Says:

    Zecco is the worst because there is NO in betwen bid/ask option contract acceptions. Options express in fact fills every order at less than the ASK price therefore if you figure that in, with all the OXPS, which will be paying a hefty $4.50 cent dividend to ANY shares purchased before close on 12/13/2010, that’s a 25% Instant profit on $17 shares. I could go on and on but all I did was blow through $1200 with Zecco. Only use for Stock buys————–NOT OPTIONS!!

  14. 14
    Glenn Says:

    There are no more free trades with Zecco and the price per trade is up to $4.95 per trade. Still pretty cheap though.

  15. 15
    Richard Couture Says:

    How do you retrieve forms you have submitted already.

  16. 16
    Richard Couture Says:

    How do you retrieve copys of the forms you already sent.

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