Coupled with low fees and clever advertising, Zecco and TradeKing are the two discount brokerages that I get asked about the most often. In this article, I plan to give a Zecco vs TradeKing comparison.
Introduction of the Two Discount Brokerage
Zecco Trading came to market with a big splash when it introduced commission free stock trading. Over the next few months, the discount brokerage tweaked its commission structure but by and large, Zecco still offers free commission trading for the masses.
on the other hand has more of a traditional business model in that it charges commissions on trades. It is also one of the first major discount broker to really try to build a community around its brokerage, in that it offers a message board for TradeKing customers to talk about stocks and investments. In 2006 and 2007, TradeKing also earned the top spot on Smart Money’s Broker Survey with its unparalleled customer support, fast execution and low trade commissions.
Get $50 when you open a TradeKing account today.
Major Selling Points of Zecco and TradeKing
What Zecco has going for it is obviously their free commission structure. Note however that you only get 10 free trades a month and you need a minimum balance of $25,000 to qualify for the free trades. (Notice that this is a new changed requirement. The original minimum to qualify for free trades was $2,500)
on the other hand is known for its great community and also its responsive customer support. This is in addition to its low commissions (only $4.95 per trade) which isn’t bad in comparison to other offerings that charge double that (TD Ameritrade for instance charges $9.99 per trade).
Major Complaint of Zecco and TradeKing
Not many complaints about TradeKing (although a lower commission is always welcomed) while Zecco seem to really need work on its customer service. Of course, Zecco offers everything for free though and unless you need to contact customer service (usually at the beginning), you don’t have to worry too much as both these brokerages are very popular.
Other Facts Comparing The Two Discount Brokerages
Zecco Trading
PO Box 60670
Pasadena, CA 91116, USA
(909) 657-6655
Market and Limit Orders: 10 commission free trades a month with a minimum of $2,500 account equity
Mutual Funds: $10 flat
Options: $4.50 per trade + $0.50 per contract
Minimum to Open: $0 (you need $2,000 for margin accounts though)
Inactivity Fee: None
5455 N. Federal Hwy, Suite E
Boca Raton, FL 33487-4994, USA
(877) 495-5464
Market and Limit Orders: $4.95 for stocks
Mutual Funds: $14.95
Options: $4.95 per trade + $0.65 per contract
Minimum to Open: $0 for cash accounts, $2,000 for margin accounts (same as Zecco)
Inactivity Fee: None (same as Zecco)
Conclusion of Zecco vs TradeKing?
The answer depends really on how much help you need as well as your account balance and your trading behavior. If you are just starting out and the amount of each trade is small, Zecco is a great option because commissions can really add up no matter how low they are.
However, as your investment account equity grows through time and each transaction becomes bigger, the commission (whether it’s $4.95 or $0) will become a smaller and smaller piece of the pie. At some point, the superior customer service and trading platform of will be worth the tiny amount of commissions that you are paying for.
- – Official Site
- Zecco Trading – Official Site
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{ 26 comments… read them below or add one }
I have an account with Zecco and I found that their customer service is actually okay. It takes some time for them to respond but I don’t think it’s that bad. I don’t have accounts anywhere else to compare though and the only reason why I started investing was because of the free commissions trade. For us with not much cash in our accounts, Zecco is a godsend.
Zecco! I love that company. My husband kept telling me no but I showed him that I’ve saved hundreds of dollars last year by paying $0 in commissions!
I’ve been with TradeKing for close to a year now, and went there after reading up on the two site both because of the customer service issues, and because one extensive review of Zecco spoke at length about issues applying for an account (including, unless they’ve joined the mid-90′s since last year, requiring all applications on paper rather than over the web), issues with bank transfers, and other such things, and at least at the time a Google search brought up a lot of similar complaints.
Can’t really say I’ve had any troubles with TK – the application process was simple, pretty quick, and online, trade fees are still really low at $4.95 a pop, trades execute pretty much the second you click the button, customer service is usually pretty quick to respond (plus they have several support options – email, live web chat, or phone), and there’s a pretty strong community including forums, trade notes so you can read or ask about the logic behind someone’s trades, and so on.
Shadoglare: Sounds like TradeKing is doing well for you. I keep hearing good things about the community aspect of it and it is one thing I would like to explore much further as well in the coming months.
Yeah, about the only complaint I’ve had so far is that the login process to get into the site has gotten a little obnoxious, and has also made it virtually impossible for 3rd party financial sites to interact with it – for example if you’d like Mint or Cake to import your portfolio data, you can with just about every other online broker out there – but not TK.
Wow, what a timely post. I’ve been researching discount brokers for a while, and I finally have my list narrowed down between Tradeking and Zecco. Shadoglare does make a good point, because I do use Mint. Although it’s hard to pass up those 10 free trades. How do the tools compare between the two? I’m still really on the fence here and can’t make up my mind.
I just saw the news about Zecco raising there minimum account balance to $25,000 to get the 10 free trades. What a bonehead move. Well, at least that makes my decision easy now. I won’t be opening a Zecco account. Even though there commission of $4.50/per trade is still low, it isn’t worth the difference of $4.95/per trade with Tradeking. Tradeking has better customer service and better tools.
I’m going to check out TradeKing because of the change. $25,000 is just too high so it pretty much means it’s $4.50 per trade for me. The $0.45 difference is so small I rather pay for it with the comfort of having a better customer service just in case.
TradeKing customer service is very responsive – I’ve only had a couple questions, but they’ve gotten back to me within a day each time.
I wasn’t aware Zecco changed their account minimum, but it seems like that kills their business model. If you have $25,000+ to invest and make your own decisions, TradeKing’s tools and community are worth the minimal commission.
I’m new to all this. Having never invested before, just wondering if Lee and Ryan have started yet with TradeKing? And if they have, how was the application process?
Arlene
Arlene: I’m not sure if Lee and Ryan started yet but my experience of the Tradeking account opening process was fairly straight forward. A couple of forms later, I’m in there. Just make sure you have a source of funding (bank account or others) ready and you will be up and running pretty quickly.
Be careful with Zecco. In two separate months they charged me margin interest, though I made no marginable trades. The second month, I made NO trades & they charged my account interest as well as issued a margin call!
I transfered out to TradeKing.
Frank: I too was recently (Apr 09) charged with margin interest–and I have a CASH account?! The amount ($0.99) was too small to contact Zecco customer support. But it does raise the “telecommunication-like fee” flag in my mind.
I have been with Zecco for 1.5 years. I also have a TradeKing account (~3 months). I definitely like TradeKing’s trading platform better. I have been seriously thinking about moving everything over to TradeKing. Free but now only lower commissions are holding me back.
Another annoyance with Zecco is that I can never reconcile their balance within Quicken. I diligently enter each transaction, trade, commission, fee, etc. into Quicken. I double check that with the monthly statements. And, yet I am always a few cents lower or higher in the total account value. Yes, that is a small amount but it is disconcerting nevertheless. I have no troubles reconciling with any of my other bank or brokerage accounts.
A final Zecco annoyance (concern?) is the year-end tax statements for options. I have had some expired options categorized as exercised, while exercised options labeled as expired. If I get audited, I can always point to the other part of the SAME tax statement showing the underlying stock’s sale/purchase. How can a brokerage not get that straight even if they use a third party, Penson, for this?
KhaiPA,
The first mistakes I caught in my Zecco acct were also small, too.
But then the next were larger (over $150). If I wasn’t watching my account I would have missed these. Interesting how they were always in Zecco’s favor. Not sure if it’s Zecco or Penson who’s at fault, but I’ve had no problems at TradeKing.
I wonder how many people are doing many margin trades and not catching these errors. No wonder they can offer free trades!
If you are a buy-hold-rebalance etf-index-investor you will find “tax loss selling” important for your selection of a brokerage.
For this reason, I will suggest looking at WellsTrade for that group of reader. WT platform has the option to choose the lot that you want to trade.
Zecco defaults to FIFO just like other borkerages.
Trade King provides that as a service but I read somewhere that the end-of-the-year tax papers will FIFO.
Your comparison left out important details. Like what kind of technical trading tools they provide. How good/bad is their intraday charting is. For instance, tradeking may have cheap trade commissions, but they hold back on the intraday charting capabilities unless a person fulfills up to 30 trades a month. Just comparing commissions and customer service is worthless.
So Marc, who are with? TK or Zecco?
Arlene
For what it is worth I just crossed both of my list. TradeKing gave me so much hassle over funding my account that I never got any money into it. Some o fmy accounts have my first name spelled out with a middle initial and others have the opposite. If the your check doesn’t match down to the letter they won’t take it and I can’t be expected to move money from from A to B to C just because they won’t let me go from A to C directly like everyone else will. I had completed the Zecco application online and was just about to fund it when I saw what their idiot CEO had written about advocating for socialized medicine.
That was a deal breaker for me. I can’t trust my money to anyone who advocates for the re-allocation of wealth by force. He even subscribed to the magical thinking inherent in believing that when the government runs health care everything will be cheaper without there being any shortages or rationing. That shows a macro-economic incompetence and lack of common sense that took Zecco right out of the running. Besides, I wouldn’t be able to sleep at night thinking that guy had any of my money.
I have to agree that Zecco is the most suitable option to trade because of their free stock trading if you are a first time investor and if you are already a stock player then you can use TK’s great stock trading community to help you find and choose the next best deal in the stock market. Both brokerage houses offers are great, the key is to know which company can answer your investment needs better and not just choose the one that has more positive reviews than the other.
So another question a little more specific. I have two shares of a foreign airport with a commercial bank but since I now want to close this bank account I have to find a home for these two shares. So is it better to transfer them to TK or Zecco?
Thanks for all your answers
Arlene
“I had completed the Zecco application online and was just about to fund it when I saw what their idiot CEO had written about advocating for socialized medicine.”
Holy cow, talk about politicized bullshit. Rational investors don’t take their rightwing propaganda into their investment decisions. (And most business people should understand that a country paying 15%+ of its GDP on health care is fiscally bad).
I have had both TradeKing and Zecco. Zecco is by far superior, with 10 free trades, who can complaint. However if you are an active day-trader you need to keep track of your trades daily yourself. They update their system once a day and many times after a sell/buy you balance is incorrect until the next day. I have gotten a margin call doing this, but not a big deal. As far as tools both brokers suck. I opened a TDAmeritade account and use their steaming tools free(I have no money with them, just use their tools). Also if you have a Chase bank account wire transfers to Zecco only take 2 days, TradeKing took 5 days.
In my opinion Zecco is the best.
Charles
After reading the discussion above, I decided to test Zecco’s customer service. A few minutes ago I dialed the toll-free # I found on their site. Almost immediately I had a live person – Steve, I think – who was able to tell me Zecco’s current interest rate on cash balances, and who reminded me that the $25,000 in the account for free trades could be securities.
Since I have some positions that I do not trade, that means that there really is no hurdle for me to get the 10 free trades per month. (And the 1/4% interest rate is STILL better than I’m getting on my BofA account.)
Might have to sign up with them.
I just recently debated the Zecco vs Scottrade and I decided to go with Scottrade. The extra features and the solid reputation won me over the cheaper trade fee and potential free trades.
The other cool thing was Scottrade called me within 30min of opening the account online to welcome me and to see if I had any questions. I still think I am going to open an account up with Zecco though for possible penny stock trades as their trade fee is straight forward. I wanted to go with a more reputable discount broker for now though.
I had the same frustrating experience as the uberconservative wingnut above re Trade King. Could not get my account funded in a timely way because of rules nobody else has.
So I would up with Zecco and a most incredible serious of customer service fiascos. I don’t think I EVER got anything resolved in one email. It was so bad I would up moving my Zecco account to Sharebuilder, which is not any good for trading but I already had an account there and I had to get loose from Zecco.
I now trade at Fidelity. It costs more but I’ve decided you get what you pay for.
Very well timed this discussion – I am actually deciding for a broker myself. I am not going to be trading a huge quantity of money to start off, so the 25K – free trades with Zecco don’t really mean much.
I was considering TD Ameritrade after having met one of their former executives. But, the $10 commissions are killer. If I start a position worth say $500, I would basically have to gain 4% just to come out clean. Meanwhile, if I decide to make larger positions with the amount of cash I am investing, I’d be putting all my eggs in one basket, thus also taking on a lot of risk. So, long story short – TDAM is out of the picture.
(although a friend told me that they currently have 1 month commission free trading if you open an account with 2K min – might be a good try for those of you testing the waters – I personally can’t change back and forth between brokerages, since my employer has to approve the whole process)
At any rate, I had narrowed it down to Zecco, TradeKing and SogoTradde ($3 commissions). But after all this chatter, it seems like TK has the lead. I would be curious to learn a few other kings if anyone has details on these:
(1) How does the execution speed compare between Zecco and TK?
(2) How do the technical analysis tools compare between the two?
(3) How in depth is their equity analysis – meaning will I have to be going back to Google Finance to get financial statements and quarterly reports on positions?