Because Zecco and TradeKing are considered a couple of the most well-priced online discount brokers around, I thought to summarize what it is that makes them so popular. Also, knowing their pros and cons may help you make the decision as to which broker to open an account with.
TradeKing: Cheap Stock Trades With Awesome Customer Service
What’s great about TradeKing? In a nutshell, they offer very low trading fees at $4.95 a stock trade along with great customer service and no hidden fees. They are also one of the most recognized online brokers, having won top awards from media publications like Smart Money and Barron’s in recent years.
They are a young company, but already making waves in the online brokerage community. They were voted by SmartMoney as the #1 Discount Broker for 2006 and 2007, and #1 in Customer Service in 2008. Barron’s 2008 Online Broker Survey ranked them 2nd out of 15 other online brokers for Usability and Cost. They received Barron’s highest ranking of 4 stars in their latest annual survey.
TradeKing: Features of Their Online Stock Brokerage Account
Here’s a quick run through of their features:
- They charge an extremely low flat fee for trades which everyone receives regardless of account size or the frequency of trades made. Their pricing structure is very simple: just $4.95 per trade plus 65 cents per option contract.
- They offer a standard investment menu of stocks, mutual funds, ETFs (exchanged traded funds) and options. Fixed income investments such as U.S. Treasury issues, CDs and bonds are also available, but this may require you to contact a representative.
- They have a wide range of trading and investment tools available to all customers, such as calculators, charts, alerts, real-time quotes, customized charting, free investment research, stock and fund screeners, streaming news and a learning center.
- They offer a comprehensive array of educational materials presented through podcasts, mp3s, videos and written articles. They also have highly informative downloadable audio seminars. Their educational resources cover basic to advanced investment material.
- They’ve got great support. You can make online transactions or contact a live individual to help you with your transactions. Note, however, that they may not offer the level of support that full service brokers do, but that would be expected given their business model.
- Their site is highly intuitive and user-friendly; there are video demos and virtual tours to help you with navigating their site and to help you quickly get up to speed with their environment.
- They’ve got an active and helpful user community, which they’ve pioneered in the online stock brokerage space.
- They’ll refund your transfer charges up to $150, if you switch to their brokerage.
- They have a refer-a-friend set up where they offer you $50 for each friend you send their way.
- And best of all? They’ve won several awards for top-notch customer service!
Zecco: Free Stock Trades With Caveats
For a while, Zecco had one great advantage over a lot of other online stock brokerages — the offer of free stock trades if you can handle a small requirement. Just open your online stock brokerage account with them for $2,500 and you would be entitled to 10 free stock trades per month.
But today, you’ll find a lot of changes at Zecco and you’ll notice that their great free trades offer is no longer available. Instead, they’ve focused primarily on enhancing their services and have done quite a lot to strengthen their position in the online brokerage industry. Following are some of those highlights.
Zecco Online Stock Brokerage Account Features
- They no longer offer free stock trades and have changed their commission structure to reflect a flat fee of $4.95 per stock trade (but you’ll need to add $0.65 per contract in the case of options). They don’t charge annual account fees.
- They offer real time quotes for free and streaming quotes for an additional charge.
- They’ve got a variety of tools though some are offered for a fee. There’s a no cost two month trial period where you can use their premium Performance and Tax Planning tools as a new customer. But they also have free stock screeners, calculators, alerts and options tools at your disposal.
- They’ve got educational and training materials as well, which you can find in their Zecco EDU section.
- They offer a wide selection of investment products.
- They have Forex trading support, which you’ll find in its own section.
- They also have an active user community called ZeccoShare.
The Verdict? It’s No Longer About Price
In the past, I’ve heard many customers admit that pricing may have been the only advantage Zecco had over TradeKing. And even before Zecco eliminated its free stock trades offer, we were already partial to TradeKing, given how well received they were by the media and financial publications that would regularly release brokerage surveys and awards. TradeKing often snagged many of these acknowledgments from third party evaluators. So with Zecco dropping their free trades, you may wonder what they bring to the table. The reality is that they appear to have made up some lost ground by developing a lot of new functionality and by beefing up their services. They’ve focused on enhancing their suite of investment services. If you’re an active trader, either brokerage is a good pick, although I would still give the nod to TradeKing, primarily because of their consistency. But will it be the case for long?
TradeKing is awesome in many respects — the customer service, tools and community they provide are well regarded by the financial community. For more passive investors, their low cost commissions are at par with Zecco’s regular fees. So if you’re less of a trader and more of a long term investor, then TradeKing may be a strong choice for you.
However, Zecco has upgraded their trading platform to improve reliability, and has introduced improved trading features, better account management and faster response times. If you’re keen on more active trading or even Forex trading, then Zecco could be the broker for you.
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