Free Dividend Reinvestment at Zecco Confirmed
By Sun on Oct 19, 2006 in Brokerage, Investing
Post viewed 1190 times, 6 so far today
Recently, both Jonathan of MyMoneyBlog and The Finance Journey have reported that Zecco started offering equity free trade for customers with $2500 or more in their accounts. While this news certainly got my attention considering that I am now paying from $4 to $7 for each stock trade, there was one question that I didn’t find answer from their posts: there’s no mention of dividend reinvestment. I even searched Zecco’s website and again came back empty-handed.
The reason I am interested in their dividend reinvestment policy is that one of my ETF holdings, PEY, now pays monthly dividend and I plan to make it a passive income generator that I will hold for years ahead. I used to hold PEY at Scottrade which has a commission of $7 per trade. But the biggest problem with Scottrade is that they don’t offer dividend reinvestment for stocks:
Scottrade does not currently offer dividend reinvestment as an account option. Cash dividends which are paid to your account are automatically swept into an interest bearing cash account.
I swithed from Scottrade to FirstTrade in March after PowerShare announced a new distribution schedule for PEY from quarterly to monthly, just to get free dividend reinvestment from them. Since then, I have been investing about $200 every two months. Though the free dividend reinvestment from is definitely a plus, the $6.95 commission made my investment too costly (equivalent to 3.6% fees).
The no-fee trading offer from Zecco could eliminate one of my concerns (right now I am not sure if the free trade is just a bait or permanent), but the absence of dividend reinvestment information from their website prevented me from signing up right away. To get a clarification of the issue, I emailed Zecco customer service yesterday morning (they don’t have a customer service phone number) with my question and last night, I got this reply from Zecco:
Dear Sun,
Thank you for contacting Zecco Trading. Yes we do offer free dividend reinvestment. Should you have any questions, please refer to www.zecco.com.
Thank you for your interest in Zecco.
Now that everything is clear, I may put $2500 and give them a try.
But can they last?
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Steven Burda, MBA | Nov 27, 2006 | Reply
Go Zecco!
Chuck | May 15, 2007 | Reply
Wow never knew they did dividend reinvesting, just keeps getting better at Zecco.
I sure hope they can last and we don’t see another FreeTrade in the works.
Sun | May 16, 2007 | Reply
Chuck: Yes, the fact that they do offer dividend reinvestment is a big plus. Besides, they recently simplified their account application process. Are you using Zecco? I remember you mentioned a long time ago.
Chuck | May 17, 2007 | Reply
Yes, I’ve been using Zecco pretty much since they opened. I saw about the simplified account process as well, too bad they did not have that around when I signed up because it was a huge pain.
I didn’t even realize this post / information was so old either, somehow I just got a pingback on my site this week so checked it out. Guess its always good to learn something you didn’t know!
Nick Jensen | Dec 22, 2007 | Reply
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