When it comes to investing online, it helps to choose a solid, low-cost brokerage. One of the most popular online brokers is Zecco. The company is known for its low-cost investment opportunities, as well as for its active community, which can provide you help with your investment strategy, and provide you with ideas.
Zecco Account Options and Fees
Zecco offers an interesting array of products as an online broker. It is possible to open a basic account and begin trading stocks and exchange-traded funds (ETFs) fairly quickly. This basic account allows you to trade at a flat rate: $4.95 per trade. There are no hidden account maintenance fees and other fees when you trade with Zecco. Understand, though, that there is an extra charge if you trade penny stocks (those that trade for under $1 per share). You will pay $6.95 for penny stock transactions. It is nice that Zecco offers free dividend reinvestment, so you won’t be charged an extra fee if you decide to put your dividends back to work on your behalf.
You also have the option to use broker-assisted trades, although that will cost you much more — $19.99 a trade. Zecco also recently introduced extended trading hours. There is a very small fee of $0.005 per share, on top of the regular commission, when you trade after hours. However, this option is one that many online brokers don’t offer, and if you like the flexibility, it might be worth the small extra cost.
Zecco also offers you the chance trade options. The pricing is a little bit different for options than for regular stock and ETF trades. You can also trade on margin, with the cost to do so decreasing the more you borrow. Be careful, though. Anytime you trade on margin, that leverage magnifies your losses, even as it can magnify your gains. Trading on margin is not something for the uninitiated.
You can also take it up a notch with Zecco, and trade forex. Zecco offers rather low spreads in its forex trading offerings, making it quite competitive. (Understand that, with most forex trading, you don’t pay commissions — brokers/dealers earn money on the spread.) You can choose to open a Zecco Forex Plus account, or open a Zecco Forex Pro account. With the Forex Pro account, you end up with better service, and even tighter forex spreads.
Zecco also offers bonds and mutual funds. Once again, fees are flat. However, the transaction fees for some bond transactions can be a bit hefty. Instead of engaging in a Treasury transaction through Zecco, it might be worth it to open an account with Treasury Direct, and get your Treasury securities from the source.
Finally, you can open an IRA with Zecco. This can be a good way to save for retirement, but it will cost you. There is a $30 annual IRA fee, and you will, of course have to pay that on top of transaction fees. Before you decide to open an IRA with Zecco, make sure that you understand the fees, and how they are charged. You might be able to save on fees by opening an IRA elsewhere.
Other Products and Services
Zecco also offers a number of other investing products and services. One of these services is the Zecco Streamer. For the “lite” version, you pay nothing; anyone with a Zecco account can use it. You can try the advanced version of Streamer free for 30 days, and then it’s $19.99 a month. Streamer offers you access to real time information and news. The service is great for those who want a lot of information. Day traders can find Streamer especially helpful, since it helps them track price movements in real time, and get access to in-depth technical data.
If you have a combined account value of at least $250,000 for three months, or if you average 25 or more trades a month over three months, you can take advantage of the Elite Premium Service. This service allows you access to the paid version of the Streamer for free, as well as waives the annual IRA fee. You can also engage in broker-assisted trades for $4.95, instead of paying the regular price of $19.99 for such trades. In some places, Elite Premium customers can also receive reimbursement for the payment of wire transfer fees for transactions involving Zecco.
Zecco also comes with a great mutual fund screener, and a host of options for the international trader. The community is solid, and there is a host of research tools that can help you make more informed decisions about your investments. For the most part, Zecco offers good value for the money when it comes to certain types of trading.
Opening an Account with Zecco
One of the great things about Zecco is how easy it is to open an account. You can complete the process, when you are opening a regular stock trading account, in as little as 10 minutes (it might take longer if you open an IRA account). The form is fairly easy to fill out, and you won’t have to mail anything in to get started. You do have to wait for account approval, but on many days that process is completely within 30 minutes — and then you get access to the features.
You will have to wait to start trading, though, since you will need to wait for the funds to transfer to your brokerage account. As always, such transfers can take a few business days to complete. You will earn a small amount of interest on the money that sits in your brokerage account, though. The transfer process is fairly easy, though, once you link a bank account to your Zecco account. You can also initiate wire transfers to speed up the process.
Over all, Zecco offers good value for the money. Most trades are inexpensive, and you can access a number of free and premium tools. However, some fees are a little bit high. But, Zecco does offer a wider variety of options than many other online brokerages. If you are a more advanced trader, interested in options and forex, Zecco can provide you access to opportunities other online brokers might not be able to.
IMPORTANT UPDATE: During 2012 Zecco and Tradking merged (you can read our Tradeking review here). They decided to go under the Tradeking brand and their services eventually will be provided under one roof, therefore it is recommended to open an account through Tradeking directly.