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30
Scottrade vs. Zecco
May 30, 2007 | 7 Comments
Thru the years I’ve tried a number of online brokerages including both Ameritrade and TD Waterhouse (before they merged), Wells Fargo (WellsTrade), ShareBuilder, and Scottrade. Scottrade has been my favorite–have had an account maybe 5 years. One complaint is that they never added back ACH out after a security issue arose maybe two years ago (despite saying they would). Anyways, that’s not what this post is about…
Last Feb. I was hearing quite a bit about the free and uber low cost brokerages starting up, including Sogo Invest, Zecco, and Just2Trade, and a change to free at Bank of America for accounts over $25,000 (note: Wells Fargo recently started offering free accounts too). I dismissed Bank of America because they aren’t offering any interest on cash.
Now, I’m not sure whether free trades will turn out to be a fad, and Scottrade trades are already a low $7. Yet, the appeal of free is that I can make small trades without guilt. For example, if I want to place a bet of $1000 on a very speculative stock, at Scottrade the buy and sell will eat 1.4%. Which is why I don’t usually make trades that small on my Scottrade account. Anyways, I thought I’d give one of these free trade brokerages a try. Below is my original homework…
| Sogo Invest | Zecco | Just2Trade | |
| Cash Interest (MM) | 2% | 1% (4.35% MM) | (4.44% MM) |
| Trade Cost | $3 | $0 | $2.50 |
| Min Investment | $0 | $2500 | ? |
| Services Not Free |
$50 ACAT out |
$50 ACAT out | |
| Funding Method | ACH | ACH | ? |
| Free | Email statements Account closing ACAT (both) |
Email Statements Account Closing ACAT in |
Checking |
| Thoughts | Backed by big trading house |
Sketchy business model |
No ACH yet Crappy website |
My original notes 02-28-2007
Went with Zecco…because it seemed like the most likely to reach maturity of the three. And the 40 free trades a month. The process of getting a Zecco account is crude (you’ll understand if you try it), as is much of the website. Particularly annoying is that certain tasks require re-entering your password even when logged in. That said, I’m actually very happy with the service. Although Scottrade is still my primary brokerage, I now make most of my short-term trades in the Zecco account. I’ve put far more money into my Zecco account originally planned. The things that matter most to me–trade execution and cash interest–are great.
Bottom line: I’m not sure whether Zecco’s business model will stand the test of time, but right now I’m a happy client.
Comments
7 Comments so far
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Portfolio
2010-09-08 16:01
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Admin
Scottrade does allow ACH transfers now. They have not advertised it much but if you go to the deposits section it is present.
I’m glad I ran across this post. I’m currently a Scottrade client but of late I’ve been considering Zecco…I mean who can resist free trades?
I noticed on the Zecco site earlier that the minimum to open an account is now $2000. I’ve heard that the account setup process is a bit cumbersome, but I’ve also heard a lot of good things about Zecco as far as trade execution and reliability.
I think the Minimum account is only for getting the free trades at Zecco.
Looking at opening on Zecco…as of Dec 2007, looks like they’ve ditched the 40 free trades idea, and are now at 10 (w/ $4.50 additional. Still…i like
I researched Zecco and decided it was a bait and switch. I signed up with scottrade.com and got 3 free trades with this promo code: DOOL8293
Don’t expect to deposit cash into Zecco and trade immediately. They hold ACH transferred funds for 5-business days. Otherwise, I’ve been pretty happy with their services.
I was a Zecco customer for awhile, actually I still have an account but I just can not justify using them for several reasons. For one, the web site is a real hassle to work with. They have something called a “Trading Key” that you have to use to access your actual portfolio. This is a whole extra step and is the most unfriendly method of accessing an account. At Ameritrade I can link all of my accounts and login once. This enables me to right down to business when I need to place a buy or sell RIGHT AWAY! Zecco offers the very real likelihood that the numbers you want will no longer be valid once you manage to get into the trading account. They also have a forum for discussion, but if they don’t like what you have to say they take it upon themselves to censor a post. The free trades, if they still exist on Zecco, are not a big deal. Consider I have 500 free trades on Ameritrade and Ameritrade can get orders in very quickly. I’ve seen times when Zecco flat out failed to get an order in, even though I tested them against both my Ameritrade and Scottrade account by placing identical orders on all 3 sites, with Zecco placed first both Ameritrade and Scottrade wre able to complete the orders while Zecco took much, MUCH longer if they were ever able to get the order in. There are many more reasons that I doubt I have time enough to relate herein. The bottom line is, I score Zecco a .5 out of a full 10, or an F minus if that can be comprehended. They are just very slightly better than Tradeking, which is a complete failure as they try to control what you can and cannot buy by charging outrageous fees for securities they personally don’t like. At least Zecco doesn’t do that. So, if you want to use Zecco, I wish you much better experiences than I was ever able to get from them. In my book, they are one of the worst possible choices for an online broker.