Zecco IS Cheap
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No, I am not talking about their commission free trading.
It’s now a quite common practice for financial institutions to use small amount of trial deposits to verify the ownership of bank accounts, if they can’t, or don’t, verify it in real time online. For example, when I opened my last two savings accounts at IGoBanking and FNBO Direct and tried to connect them to my Bank of American checking account, both used two small trail deposits, less than one dollar in total, to verify I am the owner of the account as I claimed. The good thing about trail deposit is that I don’t have to send a voided check by mail, so the account application process can be sped up. It usually takes about a day or two for the deposit to hit the bank. After the verification process, the money was left in my account (though I have no way to proof that they deducted the same amount from the interests I earned).
Not so with Zecco.
Last Friday after I opened an account with Zecco, Zecco* made two small deposit to my BoA checking account, one 2 cents and the other 38 cents. I verified the trial Friday night and when I checked my BoA account last Saturday, the two transactions were shown as pending.
I logged into my BoA account again last night and guess what I found?
Two pending withdraws of $0.02 and $0.38, respectively.
Zecco* would waive trading commissions, which other brokers would charge anywhere from $3 to $15 per trade, if I do business with them, but they sure don’t want me to keep that 40 cents for free.
No complain! It’s not my money anyway.
*Affiliate link
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Trackbacks & Pingbacks
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Why this kinda pissed me off is that I can’t recall them mentioning they’d withdraw the deposits, and therefore didn’t plan for them, which totally screwed my 6-withdrawals-per-month limit from my MMA!!
Thanks for the info! I just opened an account wiht Zecco.
U can’t beat free comissions! Hopefully, there are no other strings attached/hidden fees
I forget which of my own financial institutions did the same to me; they gave me then they tooketh awayeth.
They probably want to reuse the money for the next customer!
I thought it was weird, too, when I opened my account. Fortunately, the account that I tied to Zecco was my checking account, and not my savings account, or I would have been mad if it affected the number of withdrawals I could make. I viewed it the same way you did - not my money, but it sure does make them look a chincy when most other institutions would just leave the money in your account.
Richard: They do say in the fine print that they will withdrawl the money again. I do think it sucks that they do this, but they do still at least say they will withdrawl the money.
Rick: Thanks pointing out the fine print. I didn’t read all the fine prints (I hate fine prints), so I must miss the withdraw part. Anyway, that doesn’t make me feel any better. I really can’t understand why they just have to take that 40 cents back. If everybody else using trial deposit give me the money for free and only Zecco takes it back, then I am afraid I won’t have a good impression of them. Fortunately, I used a checking account, so I don’t have the over withdraw problem.
They have changed their Minimum account opening to $0. I was reviewing their faq today for the next step in my review and I noticed this. I deposited a couple of hundred bucks but the market was closed by the time I tried to execute some trades today. I don’t think there will be a problem
Joe is right! This from their FAQ:
What is the minimum amount required to open an account?
Zip, nada: there’s no minimum deposit required to open an account.
Just opened an account with them; was reading their information section on trading and it seems that as long as you request you can setup a drip with the stocks you invest in. Sort of like Sharebuilder but with no cost! If true, then I’ll mess with this account when I get some funds that I would otherwise waste.
SogoInvest, I’m still waiting for them to add to their offerings hopefully I can also setup a drip with them some day. Pretty much decided to use them as my testing bed since I really didn’t like sharebuilder once I realized the exit price. Hopefully like everyone is mentioning they will keep to their fee schedule instead of changing it in a few months or years.