Zecco To Adopt New Pricing Policy: $25K Minimum Required for Free Trades

Zecco Trading now requires a minimum of $25,000 in the brokerage account in order to earn 10 commission free trades every month.

This is just another example to show that there’s no such thing as free lunch, if you consider free stock trades from Zecco as *free lunch*. Since the launch in July 2006, Zecco, which stands for “Zero Commission Cost,” has been slowly drifting away from their initial belief that “there are independent investors out there who are comfortable making their own decisions and who would rather see their money go toward their investment return instead of paying higher commissions” (see my interview with Zecco).  Today, they finally buried their free trade concept when they announced new pricing policy effective March 1, 2009:

Zecco Trading Pricing Policy

The new fee structure essentially killed the free trades for small investors, who have been attracted to Zecco because of its relatively low minimum requirement to earn the free trades so they can keep the costs to invest down. Not any more. You now have to be an investor who either have a big account ($25K minimum) or trade like crazy (25 trades per month) to avoid the commission, even though the new $4.50 per trade commission is still relatively low comparing to other online discount brokers. Zecco’s explanation of the policy change is like this:

Why was this necessary now? Anyone who’s read a newspaper lately knows that the US and world economies have been hit hard over the past 4 months. As a result, some of the largest corporations in the world have had to cut costs and adjust to new business realities. With reduced retail trading volumes and lower interest rates, we at Zecco Trading simply could no longer provide free trades to as many people as we would like.

“Reduced retail trading volumes”? Didn’t they give unlimited free trades in October 2008 to everybody because “system activity increase by over 450%” in September?

Looking back the history of Zecco, the broker has changed its policy quite dramatically in the past two and a half years, more like bait and switch. First, they offered 40 monthly free trades with $2,500 minimum, then reduced the minimum to $1,000, later removed the account minimum all together. But that didn’t last long as they reinstalled the $2,500 minimum requirement and cut free trades per month to 10.

Today, it became just a discount broker.

I wasn’t very confident about their free structure from the very beginning and have doubts how long the free trades can last, therefore, I only keep a very small account, my play money, with them. With the new pricing policy, I don’t see the reason for small investors to hang on with them. The main and only attractive point of Zecco is now gone.

Maybe it’s time for Zecco to change its name as well.

Will you keep using Zeccoo? If not, what’s your option? If you have at least $25K, then I am sure you can find better alternatives which can give you better trading experience.

I prefer brokers with consistent policies, even though I will be charged to make a trade. That’s why I keep my investments with Scottrade and TradeKing, but only play money with Zecco.

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12 Responses to “Zecco To Adopt New Pricing Policy: $25K Minimum Required for Free Trades”

  1. lan |  Jan 30, 2009 at 10:57 pm

    It going to be a run on the zecco bank!!!

    Just make sure u guys do it after the last day of the month to avoid having to pay 4.50 for each trade this month.

  2. tino |  Jan 30, 2009 at 11:17 pm

    haha, they have nothing of value to offer customers..Nothing..

    There are better alternatives out there if you have 25k to play with, and even if you don’t with there new pricing structure

    i feel like a dumbass taking the bait…hahha

    Let it be known that zecco wasn’t the first to offer freetades..

    I have opened accounts with the first to offer freetrades…

    That includes freetradez, freetrade, brokerage america, the finacial cafe, they were the ones to start this..

    However, seems like zecco was teh only one to market it..

    But there’s going to be a run on the bank, zecco is done

  3. aa |  Jan 31, 2009 at 4:15 pm

    People with $25K don’t need to use inferior trading platforms at Zecco.

  4. MadMike |  Feb 02, 2009 at 5:11 pm

    I just closed my account with this company. Just too many changes over too short of a time leads me to believe something is fundamentally wrong with this company…RUN if you have any accounts with this company!! You have been warned!!!

  5. Tim |  Sep 24, 2009 at 4:04 pm

    Zecco Fraudilent 2 bit scum artists using indivuduals money for their own financial benefits whilst illegally or unneccessarily holding funds after a 24hr cleared ACH.

    For the second time i deposited around 16k to Zecco on Thursday Sept 2009 evening from my BOA account.I checked the money,it was gone Fri morning.Now TDameritrade,Scott trade etc the money is transfered and cleared instantly like next day ready for trading.Here we are next week Thursday and although i had a conference call with Zecco and BOA on the phone the previous day Wednesday,the money is still not in the account so for 5 business days these sons of corrupt,foul coorporate bitches and managers in Zecco have used my 16k and god knows howmany other thousands of peoples millions to Repo the millions overnight for a few days to gain thousands of dolars of profit and interest and deny it ,claiming that there is a risk of unavailable funds and a debit.Well i know for a fact that a big Corporations like BOA and Td bank only requires 24hrs max from the ACH in NY and local clearing institution.Therefore the money is available at Zecco and Tradekings disposal almost next day.
    They illegally use and hold money that doesn`t belong to them to Repo it overnight or few days to make rediculous profits off our backs so spread the word and stop tradiing with these corrupt dishonest scum institutions,Stop Zecco.Zecco must go down and all alike small time ripp off,fraudilent brokarage firms stealing money from right infront of your naive,gullible eyes.An avarage Joe wouldn`t know about ACH clearing times but if you do your research,you`ll knwo they have the money the next day.The proof?My conference call on Wednesday with my bank and Zecco manager,so next day where is the f….ing 16k.Give me my money you f…..king thieves.In the mean time i lost about 2-3k in potential trade profits that i had planned.Also don`t defend these wankers to me at all ,i have no sympathy what so ever.I would understand,but this is the 3rd time i have been screwed by Zecco,the first time it took 3 weeks to open an account and the scums kept the money for 2-3 weeks.