Zecco Removes Stock Trade Account Minimum to Lure More Investors

Zecco free tradingNow it seems that everything is free at Zecco (except option trading).

I was tipped off by Joe yesterday about the change and just got an email from Zecco this morning that now you can open a Zecco trading account with no account minimum.

You asked, we listened. In response to popular demand, we’ve lowered the minimum to open a Zecco Trading account from $2,500 to $0. Now, no matter how much money you want to invest, you can start trading stocks for $0 commissions in a Zecco Trading account.

The new pricing information can also be found on their website.

With many discount brokerages don’t require any minimum for opening an account (such as Scottrade, Sogo, Firstrade, and Sharebuilder and, interestingly, none of them makes to their comparison list), Zecco’s initial $2,500 requirement is quite high for small investors who want to join but have to wait till they can save enough to meet the requirement. Now with that removed, it will be much easier to enjoy the commission free trading. Actually, during my application, the minimum requirement never came up and I was able to transfer only $1,000 to the account. So I suspect it probably has been a while, they just didn’t officially announce it until now. Two months ago when they had the $1,000 minimum promotion (a unannounced one as well), I questioned whether the move signaled things were not going very well at Zecco. That concern remains with this new push to get more investors.

Other than the free trading, my feeling of Zecco isn’t that great (check out first Zecco review and first trading experience). I guess that’s a small price I have to pay just to save on commissions.

On a related note, be careful when using ACH to fund your Zecco account. Zecco uses two small trial deposits to verify your ownership of the bank account that you are trying to connect to Zecco, but they will later withdraw the money (I was told this procedure is included in their FAQ, but didn’t find it). So if you are using a savings account to fund your trading, then the two withdraws may cause you over the 6 withdraws per month limit for a savings account.

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10 Responses to “Zecco Removes Stock Trade Account Minimum to Lure More Investors”

  1. zeron |  Jun 05, 2007 at 12:33 pm

    i would say they are GREAT because it’s free. they are NOT GREAT because their website/UI/navigation/FAQ is not friendly and sometimes confusing. being not great has something to do with being new. as long as they remain free and continue to improve their website(like recently they introduce the paperless transaction to open an account) it will be GREAT.

  2. Guest |  Jun 05, 2007 at 1:41 pm

    Smells like desperation to me. Zecco has received too many negative reviews by most of the PF Blogger world so far and the only redeeming value is the “free” trades.

  3. MillionDollarJourney.com |  Jun 05, 2007 at 1:59 pm

    In my opinion, if a new stock trader doesn’t have at least $10k let alone $2500 to trade, then they shouldn’t be trading at all.

    FT

  4. James G |  Jun 06, 2007 at 3:31 am

    @MillionDollarJourney.com

    And why is that? In order to properly diversify? What about those who subscribe to the Warren Buffett school of thought which equates roughly to do your research on companies, buy a good portion of them and then hold forever (pretty much eschewing the concept of diversification)?

    It is IMO poor logic to state that new stock traders need to be upwards of $10k to trade since their losses in this new “game” could be huge and therefore psychologically damaging (potentially) compared to getting started small and learning the basics of individual stock risk and how to evaluate companies.

    Think of it this way, a new investor puts in $100 to Zecco and places it on 2 stocks out of the blue, then both companies close doors. He’s out now $100, but doesn’t feel so bad since he can stomach the loss. Have him save up and place $10k in thirty stocks, and then have the whole market turn into a huge bear therefore losing 5K and potentially turning him off to this whole stock business. Is this really a better idea than starting small?

    The only time when saving huge amounts before getting into stocks is a good idea is if trading costs are involved, but since Zecco has none, there is no good reason for a small investor curious about stocks and willing to put money on them to not try this.

  5. Jon @ TheMoneyMythos |  Jun 06, 2007 at 9:12 am

    This is great news – I signed up the second after I read about this. I actually think it’s a good option for people without much money to invest, as it allows them to “practice” with a smaller amount of funds without having to dedicate thousands of dollars to a stock.

  6. Yan |  Jun 07, 2007 at 7:13 pm

    Yes, I got the email as well. By the way, thanks for the series of reviews. Maybe it is the time for me to jump. Just need to come up with some spare money. ;-)

  7. LB |  Oct 12, 2007 at 2:52 pm

    Zecco I want my $6,000 back NOW!!!