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.
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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{ 48 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.
I applied to both TradeKing and Zecco. I had better experience than you. But this is 2.5 years after your review. I just opened them both up. I had TradeKing first and got very frustrated with depositing my first check and I found Zecco was quicker, easier, and I didnt have to mail or fax any documents. I have yet to trade with either. But Zecco application was much easier/quicker.
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?
Apologies to all for the many typos in my screed above.
If I were starting over, I would be interested in Just2Trade–but on the other hand they say out front they don’t take rookies.
I note that the USAA on line brokerage (for veterans only) has trades for $5.95, which beats Fidelity.
My fantasy: fast real time trades for five bucks or so with the ability Sharebuilders has to say “Gimme five hundred bucks worth of XYZ” and then you can turn on automatic DRIP both because they deal in fractional shares.
Sharebuilders is great for dollar cost averaging into a position over time but their real time trades really suck in terms of both speed and price. So I have to have two accounts.
A clear advantage of Zecco over Tradeking is in the trading of penny stocks. Zecco charges no addition fees while Trade King charges an extra penny per stock under $2. Depending on the stock price and quantity this could cost close to $50 in commision.
Free trades at Zecco wins. Hands down. They actually are able to give you better prices for buying stocks that other brokerages like Fidelity that charge you commission. I often enter a limit order with Zecco and get an executed price even better than the limit I put in! I would strongly encourage all to avoid brokers that charge commissions for stock trades, if possible. The only reason I use Fidelity is that Zecco does not offer no-fee IRAs but would cost $20/yr, which is higher than $7.95 for just one trade per year at Fidelity. But I use Zecco for regular stock brokerage and it is simply the best. Zecco would be even better if it offers foreign stock trades as well.
Trade King switcheded clearing firms from Legent to Penson recently and their reliability has plummeted. After 2 weeks their back office systems are still not properly reflecting the cash positions and buying power in my account. Stocks I have bought verses option positions don’t show up on my account page. They have improperly charged some fees and have not replied to my complaints. I have frequently had trouble entering orders through their online system and have had to trade via phone. Also the DRIP program at trade king no longer allows for fractional shares. I will be leaving for Zecco very soon.
Marcus,
I hate to be the bearer of bad news, but when I was active in my Zecco account, they cleared though Penson.
I still have the account and intend to use it for active trading at some point. The guy above who used the tools from another site for research had a good point. Zecco’s tools are useless, and Sharebuilder not much better, but Fidelity is pretty good.
Also, I now have two accounts at Wells Trade (one for my wife and one for my mother in law) because they offered 100 free trades a year. I still prefer Fidelity for research, and I live in fear of running out of my free trades before the year is up. That could quickly get expensive.
Hi Marcus,
I had Zecco but switched to TK because of the accounting problems.
Ex., being charged margin interest when I didn’t make any trades!
Then they arbitrarily deducted $150 out of my account for no reason!!!!
I told TK that if this starts happening I will move my account out immediately.
LOW COMMISSIONS MEAN NOTHING IF THEY START STEALING YOUR MONEY!!!!!
Service at TK has definitely become shoddy since the conversion. Because up until then I had been pleased with their service, I am going to stay at least through the end of the year. But if they screw up the 1099’s at year end it’s definitely sayonara Trade King.
Dealing with trade king is becoming an ever more unpleasant experience. If they can no longer make a case for superior customer service, there’s no reason not to go to Zecco for the better price.
Well… I was very happy with Zecco till today. They will be raising their fees to 4.95 a trade and also dropping the 10 free trades a month Starting April 1st 2011. Ohhhh welll… I guess I will go back to Tradeking… They have better apps… Zecco just released their iphone app, which is pretty much a bare minimum…
I’m still on Zecco’s list and I have not been informed yet.
I can’t help but wonder what Zecco’s selling point will be when there are no free trades?
Yes, I can confirm that Zecco will no longer offer free trades starting April 1, 2011 as per Afshin. This is truly disappointing. I am sticking with Zecco for now because there are no better alternatives and Zecco still offers the lowest commissions. But I will be looking for better alternatives. The best strategy for now is to trade a lot less, maybe just 5-10 trades per year, and trade in big amounts. Each trade should be at least $450 so the $4.50 commission is less than 1% of the total. If anyone knows of a broker offering better than $4.50/trade commission, please post here. (Bank of America/Merrill Lynch and copycats that offer free trades only if you constantly maintain at least $25,000 cash with them don’t count, because at just 5% interest from ultra safe bonds, you would essentially be paying $1250 commission per year, a great deal for them and not so great for you.)
Cheap alternatives:
Just2Trade advertises $2.50 a trade. I have never tried them, so I would love to hear from somebody who has.
Wells Trade offers 100 free trades with a linked PMA account containing $25,000 total, which means a savings and a checking account all linked with the brokerage account. Since I’ve never used a bank account in my life except during the time I worked for a bank, I just keep five bucks in each account and use the checking account to suck money into or out of the brokerage account.
Wells Trade’s website is a bit clunky and their research tools used to be absolutely useless (they’ve recently gone a little more upscale), but if you are coming from Zecco you’ll think you died and went to heaven.
If you burn your 100 free trades before your anniversary, I think they are $5.95. Don’t rely on that, but I know it’s less than $7.
Steve,
Just checked out Wells Trade and I think I’m going to give it a try. Can’t beat 100 free trades, just need to keep $100.00 in the checking acct to waive all the fees. Thanks for the heads up
Mike
Thanks Steve for the tip! I think I will give Just2Trade a try and let everyone know how it works out later. It seems to be the cheapest option available right now. For a passive trader making just 2 trades per month, that is a saving of $58.80 a year compared to Zecco’s raised commission rate of $4.95 per trade. For an active trader making 10 trades a month, that would translate to a saving of $294 a year, which is significant.
Wells Trade is no good for me because they pay almost nothing for the $25,000 cash you must deposit with them, so at just 5% interest rate from risk free bonds that means you are paying $1,250 annual commission, which is very bad.
The only money Wells Trade keeps on the sidelines is the five bucks I keep in each account to keep them open.
The $25,000 that gets me the hundred free trades is in stocks and bonds, in the brokerage account. Actually, I’m split into two accounts with my wife so I can get 200 free trades. Right now, I’m in the ninth month and I’ve burned all my freebies in one account but have over 30 freebies left in the other one.
While shopping for lower cost brokers in the process of switching out of Zecco, I found a couple more possibilities for even lower commission costs. One is Lightspeed Trader, which charges only $0.0045 per share, which means that 100 shares of stocks will only cost $0.45 in commission, quite a significant saving compared to brokers that charges a flat rate per trade. They claim to offer the lowest commissions of all brokers on earth. It seems to be the best option for small investors, who can even trade in small amounts frequently without incurring excessive commissions. I think I will give this a try, so I would love to hear from anyone who has used this broker.
For big investors with over $1M to deposit, Vanguard might be the better option. They offer unlimited free vanguard ETF trades and 25 free stock trades per year (then $2/trade after) for anyone with over $1 million invested. Problem is that this means only about 2 free trades per month, which can be exceed easily. But for traders with over $1M and trade in big amounts, Vanguard could be the cheapest option possible.
I would love to hear if anyone has tried either of these or have better ideas still.
I considered using Zecco for currency trading but never got it up and running. Has anyone else used Zecco successfully for currency trading? Is so, how do you like?
I have had many issues with Trade King. Most notably, they give me incorrect information on my account (telling me I had positions I didn’t and that I did not have positions I thought I did have). I therefore thought I was in trades unknowingly and rushed to get out and took a loss. Their system later adjusted itself but they would not refund me for the losses I had incurred from their errors. They told me it is in their disclaimers that they are not held accountable for these things. They later made a mistake where they told me my account value was much higher and then corrected themselves. They obviously did not allow me to have the money they mistakenly told me I had. These are major issues.
Does anyone have feedback to offer on either Lightspeed or Just2Trade? I think I will always keep my Fidelity account for the research tools, but I would like to have an active trading account with lower commissions.
Another broker to consider is Interactive Brokers. They seem to have a good platform for high volume trading including currencies now. Has anyone used that service?
Hello my name is Tommy Chavis. I was on Trade King friday an was trying to sell my RCON stock at $3.10. I was rejected an a message came up an said I had unsettled funds an I would be in violation of regulator T an that I would need to call Trade King if I wanted to sell.
I went on Live Chat an the rep. Mr. or Ms. C gladly offered to assist me. I ask what was the violation an what would happen if I sold. The person replied that if I sold I would not be able to trade for 90 days an ask if there was anything else they could help me with. I replied simply no thanks.
I went back on Live Chat about 2 hours later an ask basically the same question an got a different answer from the same person that helped me before. Mr. or Ms. C said I would not be able to trade for 90 days but I could call in an Trade King rep. could sell an buy the stock I wanted for a different fee. I replied why didn’t you tell me that before an I think there response was I did not ask. I asked the same question the first time an the second time an got 2 different answers. An also I told the person that the stock was falling an they said well you are only down I think it was around $80 dollars when I was actually up $600 dollars when I wanted to sell. At the close of market I am down $186.30 dollars. The person did apologize an I told them that an apology does not get me my money back.
I wanted you to know that this is the first time I have ever had this happen to me in 5 years of trading. You have the best of everything except rep. service. I would like to know is this something that happens to all of Trade King customers or the rep. was just having a bad day. The money is gone.
Will the rep. do this again on Monday?
Will the rep. get written up?
Will the rep. get a raise for doing a great job?
What will Trade King do to resolve this issue?
Will Trade King say the same I apologize?