Bank Deal: Earn 1.00% APY on an FDIC-insured savings account at Barclays.
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.