Money Blue Book

As the economy steadily recovers from the devastating recession that has gripped the nation for months, stock market prices that were previously beaten down into the depths of generational lows are finally starting to rise again. With opportunities afoot, it’s perhaps time for those of us who have been cautiously hoarding cash on the sidelines to consider jumping back in again. Stock prices are extremely cheap right now, and tremendous long term gains are ripe for the taking. If you have been contemplating the prospect of getting back into the market again or perhaps getting started with investing for the very first time, now may be the time to consider opening up a new discount broker account. In the hopes of earning your business, a host of online brokerage firms are now offering consumers extraordinarily low prices for cheap stock trades – without scrimping much in the way of premium brokerage amenities and features.

One of the most highly touted low cost brokerages in the market today is Scottrade, a brokerage firm with which I have retained an investment account with for years now. While certainly the company’s website design and palette choices aren’t exactly the prettiest or most intuitive around, the firm’s online trading tools and statistical reporting features are more than sufficient to satisfy the discerning needs of most run of the mill investors.

Scottrade’s Best Features: Low Broker Commissions, Low Account Minimums, and No Hidden Maintenance Fees

Compared to all-in-one brokerage giants like E-Trade or Charles Schwab that offer one stop shopping for all of one’s banking and stock trading needs, Scottrade focuses exceptionally well on its primary niche – individual stock traders and mutual fund investors who want to enjoy the benefits of deeply discounted fees and rates without having to pay extra for the premium services they never use. Striking a decent balance between quality and value, Scottrade offers a fairly robust line of investment products, differentiated online trading platforms for different types of investors, and enhanced market research tools for those that desire exceptional control over portfolio performance – all without breaking the bank in the way of fees.

Scottrade’s trading fees are exceptionally low, even when compared to the rates touted by other online discount competitors – charging only a flat $7 fee for trades priced over $1. All equity and option trades, whether they be market or limit orders – are only a simple $7 per trade. This type of low and straight forward flat pricing not only should comfortably suit the needs of long term buy and hold investors, but also should greatly appeal to day traders and active investors who execute frequent buys and sells. Of course, do bear in mind that while $7 flat fee trades apply to all online Internet based transactions, if you choose to execute trades over the phone – it will cost $17 for phone based trades and $27 for broker assisted trades. Take my advice – regardless of which discount broker you ultimately decide to invest your money with, learn to make trades online – you’ll save a bundle over your lifetime.

Both advanced traders and entry level beginners to investing will greatly appreciate the low minimum balance requirements for new accounts. Currently, Scottrade only requires $500 minimum to open a new account. The online broker also imposes no inactivity charges and levies no hidden maintenance fees as well. Leave your investment account idle for as long as you wish – there is no charge. For the convenience and freedom of its brokerage customers, Scottrade also imposes no account closure or transfer fees. Investors looking for a simple brokerage option that offers straightforward cost competitive pricing without anything tricky will do well with a firm like Scottrade.

Scottrade’s Online Customer Support and Branch Offices Are Well Regarded and Highly Ranked

With over 400 local branch offices across the United States, a live Scottrade representative is definitely reachable when you need the prompt assistance of one. As someone who has called the Scottrade customer support phone line numerous times (800-619-7283) in the past, I’ve never encountered difficulty in obtaining assistance. It seems Scottrade strongly prides itself on its ability to deliver prompt personal attention to its customers. I recall when I first signed up for Scottrade online, within a few hours of registering for an investment account and even before I had set up my initial fund transfer, a Scottrade representative was already calling me up to introduce himself and ask if he could help me in any way or answer any questions I might have. From where I’m from, that’s called excellent customer support and the start of a good relationship.

But then, you don’t have to take my word for it. For many years now, the J.D. Power and Associates global marketing firm has consistently ranked Scottrade #1 overall in its Online Investor Satisfaction Survey – giving it the number one award for the “Highest In Investor Satisfaction With Self Directed Services” from 2001 through 2008. In another highly touted editorial review of the best discount brokers online, the SmartMoney best broker survey for 2009 awarded Scottrade 4 stars for its impressive array of investment products, online trading tools, and highly commendable customer service. Similar praise and reputational accolades have also been bestowed by Kiplinger’s Finance and Barron’s as well.

In terms of the firm’s own employee satisfaction ratings, Scottrade has consistently been ranked by publications like Fortune Magazine and ComputerWorld as one of the best places to work at. While not totally pertinent to investor satisfaction, perhaps it’s contagiously true – happy employees beget happy customers.

Scottrade Investment Account Features and Online Trading Tools

Like most online broker firms, Scottrade offers the usual array of investment products – such as stocks, options, mutual funds, IRA’s, exchange traded funds (ETF’s), Coverdell education accounts, bonds, CD’s, U.S. Treasuries, and various fixed rate annuities. While Scottrade’s online trading tools are pretty basic without much in the way of heavy hitting premium research material, they’re more than adequate for most investors and traders.

In terms of Scottrade’s online tools, the firm offers several options depending on how you wish to trade and how much investment control you desire. The vast majority of people will find the basic Scottrade website’s research and trading tools more than sufficient for their investment needs. More experienced traders will likely gravitate towards the ScottradeELITE advanced trading platform, which is equipped with fancier tools like enhanced news tickers, higher performance stock scanners, improved graphical chart functions, and access to Level II quotes that help active investors react more quickly to market opportunities that present themselves. New entrants to option trading will find the Scottrade OptionsFirst platform quite easy and intuitive to get a hang of. Those of you equipped with iPhones and various smart phones who wish to perform stock research and stock trades on the fly may find the Scottrade Mobile platform quite useful.

My complaints regarding Scottrade are few as the company’s pricing and customer service features make up for what shortfalls the firm has. But if I had to nitpick, my only dissatisfaction with Scottrade centers around the brokerage’s lack of an automatic dividend reinvestment function and the firm’s comparatively lackluster rates of return on un-invested sweep account cash balances.

I also wish the discount broker offered a more integrated and obvious way to engage in Scottrade ACH transfers for deposits and withdrawals. Presently, the firm offers MoneyDirect as a way to make one way electronic deposits via a bank account into a Scottrade brokerage account. However, account withdrawals require the submission of a request for a paper check of the balance desired. There is presently no similarly easy way for all participating Scottrade customers to withdraw such deposited funds online and on demand. The only current workaround is to qualify for check writing privileges by developing a brokerage balance of at least $5,0000. Only with check writing privileges enabled can one gain access to a checking account number and routing number that can be ACH linked to other banking institutions for easy electronic transfers. But despite the above mentioned gripes with Scottrade, none of these issues are significant enough to overshadow its pluses and discourage me from recommending Scottrade as a top online broker.

Review of SmartMoney Magazine’s Top Discount Brokerages Below

While I have written about the best online discount brokers in the past – reviewing what I believe to be the top brokerage companies out there for new stock and fund investors – it’s always good to check out what the financial experts have to say on the subject. For almost two decades now, the editors at SmartMoney Magazine have been reviewing and releasing their annual list of the best stock brokerage companies, thoroughly researching and comparing the candidates based on a variety of key competitive factors. For customers and broker firms alike, their award wining list is always a popular read.

In this year’s 17th annual broker survey, SmartMoney updated its ranked list of the best and worst brokers after conducting a variety of performance based tests and undercover research as well as reviewing the responses to surveys by the online brokerages themselves. As the folks at Smart Money remarked in this year’s review – “no detail was too small” – as they poked and prodded the various available trading tools and features, even going so far as to go incognito – calling customer support lines and posing as prospective brokerage customers, while jotting down comments in regards to the quality of the phone service they received. For new and seasoned investors, this list serves as an excellent jumping off point for those on the fence and not sure which investment broker to go with or to switch to. While the exact sequencing order of the rankings is always debatable, the list gives a great overview of who’s hot and who’s not in terms of touting the complete package in all facets. The table below is self explanatory, but I’ll comment on a few names that I feel merit some mentioning.

E-Trade Is Selected As the Best Overall Online Broker

To absolutely no one’s surprise (certainly not mine), E-trade was chosen as the top discount broker for year 2009 by SmartMoney. Ranked high in every category, with excellent customer service and an affordably low $9.99 commission structure to boot, the E-Trade brokerage company definitely deserves the top spot. One of the best features of E-Trade is its status as a true one-stop shopping destination for brokerage and online banking services. Along with its highly rated broker conveniences and extremely broad portfolio of mutual funds, stocks, bonds, and ETF’s to choose from, ETrade also offers a wide array of FDIC insured products with its highly recommended E-trade banking service, complete with high interest savings accounts and high yield certificates of deposit.

Special Offer: ETrade is currently offering 100 free trades for new customers.

TradeKing Remains A Solid and Legit Top Tier Brokerage

Despite dropping one spot down from its previous 2008 Smart Money ranking, TradeKing remains a consistently solid high performer. Compared to E-trade, Fidelity, and Charles Schwab – TradeKing offers the lowest commission fee rate by far at only $4.95 per trade. Only Just2Trade, SogoTrade, and Zecco Trading (with its free monthly stock trade deal) offer lower prices, albeit with much lower reputational scores. They only major downside with TradeKing is its lack of a fully developed and integrated online banking system for those who want their banking and brokerages services in one place. But those who simply want a deep discount broker that features a wide selection of extremely user-intuitive trading tools with an impeccable customer service reputation can’t go wrong with Trade King.

Results Of Smart Money’s 2009 Broker Survey (Rated On A Scale Of 5 Stars)

Compared to the previous year’s 2008 Smart Money rankings, this year’s 2009 broker survey featured top five results that stayed pretty much the same, albeit with a slight shuffling of the deck. In 2008, the top five in ranked order were E-Trade, Fidelity Investments, TradeKing, TD Ameritrade, and Charles Schwab. This year, Charles Schwab, with its new and improved website, hopped up from 5th place to beat out TradeKing and Ameritrade for the coveted 3rd place finish. Etrade and Fidelity, with their robust and huge mix of product offerings and funds remain solidly in 1st and 2nd place respectively. As the table above clearly demonstrates, with the top 5 brokers securely entrenched, the up and coming basement-dwelling brokerages still have quite a ways to go.

OptionsXpress – Excellent Online Tools, But Only Average Customer Service

As the Smart Money review noted, OptionsXpress rated well and received high marks for its online trading tools. However, the online brokerage retailer was docked points for providing only limited hours for phone based customer support. The editors also remarked of at least one instance where testers were put on hold for a longer than desired period of time when they called in for assistance. While OptionsExpress offers a large array of powerful investment analyzers and online technologies for stocks, futures, mutual funds, and bond trades that cater to savvy statistic-loving investors, its customer service offerings can still use some work

ShareBuilder (ING Direct) – Great Bank, But Brokerage Needs Improvement

Previously stuck at the bottom of the pile, ING Direct’s ShareBuilder discount brokerage firm has jumped up three spots after finally adding a large selection of mutual funds into its investment product lineup. However, its requirement of extra fees for access to premium research that other broker alternatives offer for free keeps it from advancing further in terms of ranking. Currently, one of ShareBuilder’s biggest selling points is its unique automatic investment feature, which allows online customers to buy stocks, mutual funds, and exchange traded funds (ETFs) on a regular basis so they can take advantage of dollar cost averaging as stock prices change and fluctuate over time. For now at least, ShareBuilder seems content in its marketing approach of appealing primarily to hands-off type investors looking for a low cost, almost automated brokerage solution without all of the added cost of having extra bells and whistles attached.

Zecco Trading – Free Trades Cater Only To Individual Stock and ETF Traders

Smack near the back of the bus is Zecco. You might won’t find Zecco at the top of any best brokerage list. In fact, the company is almost dead last on the list due to its lack of sophisticated fund selections or premium research material for investors – despite its unique reputation as a super deep discount commission fee provider. For now, the company seems all too comfortable nestled in its niche as a purveyor of free commission trades to those who who primarily dabble in individual stocks and ETF’s with little need for extraneous research material. While Zecco used to shine and dominate the deep discount brokerage market with its unlimited free stock trades, this deal now requires a minimum $25,000 balance to qualify for – and only for a recurring 10 free trades per month. Customer service has improved with faster response time, but I don’t think Zecco is going to be leapfrogging E-Trade, Fidelity, Charles Schwab, or TradeKing anytime soon.

Special Promo Offer: 10 Free Stock Trades Every Month With Zecco.com

I decided to open a Zecco.com free trading account a few years ago back – at a time when the deep discount brokerage was still offering free online trades with no catches and no account minimums. Since then, the company has undergone numerous changes and developments of its free trading policy, not to mention weathered quite a bit of critical commentary and press regarding its underlying free trade business model. I think it’s time I conducted a Zecco broker review and evaluated my Zecco trading experience as it currently stands. While I still use Zecco Trading and recommend it as a top online broker for individual stocks and exchange traded funds (ETF) to this day, due to some notable drawbacks, I have not yet made it my primary all in one broker account. But due to the attention that Zecco continues to receive among personal finance blog readers and new entrants to stock market investing, the low cost brokerage provider is worth a close review.

In case you were wondering, Zecco.com’s rather unusual name is actually derived from the phrase – “Zero Commission Cost”. The company is a low cost online brokerage that burst onto the discount broker scene several years ago vowing to change the brokerage landscape forever, while touting its unique offer of free monthly stock trades with no hidden catches or gimmicks. To this day, the Zecco Trading firm still does indeed offer zero-cost and commission free trades on stocks and ETF’s for both market and limit orders, albeit now with account minimum requirements. But at its heyday and for quite some time, Zecco seemed to show up on the radars of every financial website and finance blogger’s list of the best online stock brokers.

When it comes to low cost trading, it’s frankly hard to do any better than an offer involving free stock trades. With aggressive marketing and promotion of its free monthly trades, Zecco has always greatly appealed to low cost seekers and active traders looking for the ultimate way to cheaply trade and invest in the stock market. But as a victim of its own success and popularity, the early years saw performance of Zecco’s online trading platform greatly plagued by slowdowns and loading issues due to surging online customer demands and the technological limitations of its trading platform. Presently, the company is reportedly working to revamp its online investment website, improve its much to desired customer service, and retool its business model to comport better with the realities of today’s market. Since its initial web 1.0 beginnings, Zecco has made many  improvements and innovative enhancements, such as adding an online Zecco trading community for like minded investors to share investment tips and swap portfolio building advice, as well as greatly adding to its exclusive online library of educational materials. Much publicity (both good and bad) continues to surround Zecco’s dubious decision to utilize and promote its collection of financial educational videos with the hosting assistance of the company’s rather attractive and seductively alluring band of Zecco Sirens. While Zecco has probably not improved its credibility among serious investors with its use of extremely attractive girls to host its Zecco marketing material, this obviously gimmicky approach probably has helped them earn more than a few new customers (translation: sex sells).

Free Online Stock Trades and Low Commissions With Zecco.com

Despite any of its possible shortcomings, Zecco stands as the king of the low cost brokerages with its unique offer of free monthly trading privileges for those who satisfy certain account minimum requirements. Previously in the recent past, Zecco account holders received 10 free trades per month if they maintained a minimum balance of $2,500. Do to the difficult economy and realities of financial circumstance, free Zecco trades are now limited to account holders who maintain at least a minimum balance of $25,000 in their trading accounts, or make at least 25 online broker trades per month. For savvy savers, it’s worth to note that even after the allotment of free trades are exceeded, stock trades are still only a mere $4.50 per trade. Even if one failed to meet the $25,000 minimum to qualify for free monthly trades, Zecco is still one of the deepest discounters around in terms of cost per trade. Option trades with Zecco are also priced very low – currently just $4.50 per trade and $0.50 per contract. Mutual fund trades are tabbed at $10.00 each.

Those who don’t trade frequently will be pleased to know that with ordinary individual accounts, there are no account minimums or hidden inactivity fees to contend with. While, there is a $30 annual fee for retirement accounts like Roth IRA’s and traditional IRA’s, one ought to evaluate this cost in light of the greater potential savings one will receive from the free monthly stock trading privileges. For such a low cost and cheap pricing structure, Zecco Trading packs a pretty competitive package with its arsenal of respectable trading tools, investment research materials, and large social media community of like minded users and investors. But as with all seemingly great offers, one has to wonder – what’s the catch with Zecco.com? If Zecco’s free stock trades are so great, why isn’t everyone and their uncle kicking down doors to become a Zecco customer?

According to Zecco sources and based on my personal observation, the catch with the free monthly Zecco trade offer is simply that the account customer must either maintain a minimum balance of $25,000 in their account or trade at least 25 times every month to continuously qualify. Furthermore, the free trading offer only nets you a total of 10 free trades per month. It’s not like you are reaping a huge windfall of unlimited stock trades. With ordinary Zecco equity trades priced at a low $4.50 per trade to begin with, the monthly cost savings associated with the free trading promotion isn’t exactly substantial or exceedingly astounding. However, for ordinary consumers looking for a way to invest on the cheap, every little savings helps in the long run. Zecco’s automatic free trade offer is genuine and real – you just have to be aware that qualification requires you to meet certain conditions every month.

The other possible catch or limitation with Zecco involves its recent struggles with customer service response. Due to the crushing weight of its own success, the broker has been working feverishly to improve its customer service reputation and overcome the growing pains of keeping up with heavy demand for its free trades. Along with customer service issues, Zecco also has limitation issues in regards to advanced trading tools and premium research access – features that full service and bigger online trading sites offer, but Zecco does not. But as always in life, you get what you pay for. Those who don’t mind paying a bit more for the peace of mind that established customer service brings may want to look into other popular discount brokerage alternatives like TradeKing, a consistent winner of numerous online accolades for its outstanding customer service year in and year out (read my TradeKing review to learn more). At  just $4.95 per trade for TradeKing compared to Zecco’s $4.50 per trade, both are actually quite comparable in terms of price.

Is Zecco.com A Scam, Or Is It A Legitimate Online Broker?

What started out as an extremely liberal free stock trading offer by Zecco has morphed a bit over the years. Originally, the company built its brokerage firm on the premise that it could sustain its free stock trading model off of the interest rates and margins that it earned from customer accounts. But with interest rates at historical lows due to the recession and American brokerage customers trading less and less these days due to lingering market uncertainty, Zecco has had to alter the terms of its basic marketing pitch to meet the demands of reality. However, though qualification minimums for the free stock trading offer have been increased, Zecco has staunchly stuck by its cornerstone free stock trading feature, raising the collective eyebrows of many who perpetually wonder how the company continues to offer free trades for customers and still manage to make money and stay viable. As such, Zecco.com’s practice continues to raise little red flags among the skeptics. But supporters simply note that the company is still in its growth phase and sustains itself through regular injections of stable venture capital funding, which has continued to be forthcoming. For the foreseeable future at least, it seems Zecco is relatively stable and has settled into a marketing niche of sorts (although I suspect further tweaks in its promotional terms and conditions in the coming years).

Those wondering if their money is safe with Zecco will be pleased to know that Zecco is indeed a registered member of the Financial Industry Regulatory Authority (FINRA), the largest independent regulator for all securities firms doing business in the United States. It’s also a card carrying member of the Securities Investor Protection Corporation (SIPC), which insures and protects brokerage account customers and securities investors from financial harm in the event of a catastrophic broker dealer failure. The SIPC is the brokerage account equivalent of FDIC insurance, which protects bank based deposits. While investors are not insured for potential loss due to ordinary price fluctuations in the stock market, Zecco.com’s status as a bona-fide SIPC member protects account holders from loss in the event Zecco goes bankrupt or goes out of business. In the event Zecco Trading fails, the SIPC provides insurance coverage up to a maximum of $500,000 of the customer’s net equity balance, including up to $100,000 in cash. Excess SIPC insurance coverage of Zecco customer investment assets is also additionally provided through the Lloyds of London insurance company. Thus, the answer to the question of whether Zecco.com is a scam – is no. Your portfolio money is safe with Zecco.

Zecco Trading/Research Tools and Customer Service Review

The first thing you’ll notice with Zecco.com’s online trading interface is that the company is absolutely in love with the color pink – bright neon pink in particular. Despite this very questionable color palette choice on the surface, internally, Zecco offers a pretty robust trading platform with all of the basic investment bells and whistles you’d expect from your run of the mill discount broker. Overall, the Zecco Trading interface is pretty straight forward and fairly intuitive to use. Equity trades are made under the Trading Center tab where customers access their Account Overview and investment options, as well as receive their real time quotes and trades on market price, opening price, highs and lows, volumes, and price changes.

In terms of investment options, Zecco gives investors the opportunity to purchase individual stocks, ETF’s, index funds, mutual funds, and options, for both limit and market orders. At this time, Zecco does not offer access to Treasuries, bonds, or CD deposits. Individual retirement accounts like Roth IRA’s and traditional IRA’s are available to Zecco customers (although note the $30 annual fee to manage IRA’s). Zecco does offer dividend reinvestment but currently only permits whole share purchases – leftover dividend payments unable to purchase a whole share are deposited into your account as cash. Idle cash for Zecco accounts can be swept into a money market sweep account for higher interest rate yields, however customers need to affirmatively request this feature to enable it.

Unlike a few of the other deep discount brokerages in the market today, Zecco also offers a currency trading feature via its Zecco Forex trading platform. This is a nice bonus trading perk for those seeking a consolidated one stop shopping source for their diversified trading needs.

In terms of investment research, stock trading analysis, and financial education, Zecco provides users free online access to most of the basic investment research sources that you’d expect from low cost brokers. There are a variety of premium tools available, but many of the premium research and online analysis tools are only available via extra monthly or annual fee subscriptions. My recommendation is to utilize Zecco for trading purposes only due to its extremely low cost perks for individual stock and ETF trades. However, get your stock and fund research elsewhere. Zecco’s educational videos for beginners are amusingly worth looking into however. If not just to admire or gawk at the rather gratuitous Zecco ladies that host the Zecco video shows, they are somewhat educational and informative, particularly for newbies to the world of investing. If the Zecco Sirens don’t answer your introductory investment questions, you may want to visit the ZeccoShare Community online forum  for answers or some socially assisted enlightenment. There is wide berth of information and active stock market discussions going on in the ZeccoShare Community forums, groups, and blogs. Surprisingly, I found the ZeccoShare forums to be remarkably free of pumpers and dumpers – spammers trying to spread misinformation to affect stock price movements. The same can’t be said for other popular stock market forums like Google or Yahoo Finance’s message boards.

Zecco’s weak point centers around its somewhat infamous customer service reputation. Most of the online complaints and negative reviews you’ll read about focus on the broker company’s customer service reputation. Due to its rapid explosion in growth, the company has not devoted sufficient resources to improving its customer service, although I will concede, it is gradually improving. During my years as a Zecco customer, I have only had a handful of customer service interactions with Zecco and during those times, I’ve never really encountered any substantial problems worth remarking on. However, I’m sure there are plenty of Zecco customers with strong viewpoints willing to share their thoughts (both positive and negative). Zecco offers e-mail informational support and telephone customer support through its toll free line at (877) 700-7862. The company is currently pushing out a new live chat support feature but the online tool seems to be still in the troubleshooting phase at the time of this writing.

Zecco’s New Online Broker Account Opening Process

As is the case with most online brokerages these days, the Zecco new account opening process is remarkably quick and efficient. The Zecco online application for new trading accounts is pretty straightforward and easy to follow. Be prepared to enter all of your personal information, including notations about your employment details, stock trading experience, and investment goals. These details are all pretty standard fare with brokerage account registrations nowadays.

In terms of new account funding, you can start up your Zecco Trading account with a check, money transfer, or via a recommended ACH transaction through your existing bank account. Those that want to fund their new Zecco account via an electronic ACH transfer from their bank account will need to undergo the customary two small deposits verification test. The deposit verification process ensures proper ownership of the transferring bank account and greatly expedites future ACH fund transfers from the same account. The bank account link up process takes 2-3 days, but it’s worth it.

Overall, Zecco is a pretty competitively priced discount broker ideal for individual stock and ETF traders and investors. Even without its offer of free stock trades, Zecco remains one of the cheapest deep discount online stock brokerages out there today. Although frankly, if you are willing to pay a tad more in the way of commissions and fees for a more advanced and highly rated platform, I’d recommend either TradeKing or ING Share Builder (remember to take advantage of ShareBuilder promo codes for new account bonuses). But if low cost trading is your game and you seek an online community to bounce stock ideas off of, discount broker Zecco is worth a look.

Bonus Promotion Code: $150 Offer For New TradeKing Account Transfers

The first thing you’ll notice right away with online discount broker TradeKing is that the company has received quite a number of accolades and praises over the recent years for various high performing aspects of their popular investment brokerage business. In fact, when it comes to acknowledging the awards, the company is definitely not bashful about flaunting the coveted certificate of merits, and proudly name drops them whenever they can.

A quick visit of their website reveals numerous mentions and displays of graphical award banners from popular sources of financial critique and reviews. The Wall Street Journal’s SmartMoney Magazine voted TradeKing the #1 Discount Broker in 2006 and 2007, and the #1 Customer Service broker with 5 stars in 2008. Kiplinger’s Finance voted TradeKing as having the best Top-Rated Customer Service in 2008. Even Barron’s, in its annual surveys of the Best Web Browser-Based Online Brokers awarded TradeKing 4 stars for its outstanding investment tools, customer service, social media offerings, usability, and cost factors in 2007 and 2008 – and further tabbed it as the Best For Options Traders in 2008 and 2009.

I suppose when you’ve developed a quality product that’s getting attention and praise from the critics and product reviewers, there’s no sense being overly modest about a good thing. After having used online brokerage TradeKing for more than a year now as one of my major discount brokerages for cheap stock trading, I personally have to agree with the majority sentiment – TradeKing’s a recommended keeper. The online brokerage firm isn’t perfect in all respects, but it packs a pretty good punch as top discount brokers go. Beginners new to stock market investing and trading really can’t go wrong with TradeKing – as it’s one of the best brokers out there in terms of overall quality and value.

Also, one of the very attractive practices of discount broker TradeKing is its well known propensity for offering lucrative promotional deals and offers to first time customers – frequently rolling out new account bonuses of $50, $100, and even $150, to lure customers of competing online brokers to the TradeKing platform. If this is your first introduction to online stock and mutual fund investing, you may be curious as to what the hubub with TradeKing’s all about. For your benefit, I’ve provided a summary overview of the pros and cons of TradeKing below.

TradeKing’s Best Online Brokerage Features: Low Fees & Commissions and Great Customer Service

Discount broker TradeKing has numerous standout features – but the two that get the most press and attention are its low fees for stock trades, and the highly touted quality of its customer service. While I think we can all pretty much unanimously agree that low trading cost is very important, some may disagree on the importance of having great customer service. Those readers who downplay the importance of customer service reputation, and focus solely on the online trading tools and investment options of the online brokerage – are rather short sighted. As a long time stock market investor and user of web-based trading tools, there have been countless number of times when I’ve had to contact customer service for account related issues – whether they be problems related to account set up, complicated investment fee structure questions, or technical issues related to website troubles. Sometimes, I’m just too lazy to look up an answer to my detailed trading or account question from TradeKing’s self help pages and prefer to fire off a time saving direct question to one of Trade King’s customer service reps for the definitive answer.

The fact is – trading and account problems do routinely arise and it’s good to know that with a brokerage like TradeKing, their customer service response is one of their best features. TradeKing’s online representatives communicate with customers via real time live chat, phone calls, email messages, and through the online TradeKing website community. If you want access to full service branches and live banking offices, you may want to look elsewhere, but just remember, you’ll likely pay commissions that are twice or three times as high as that offered by TradeKing.

TradeKing offers cheap $4.95 stock trades for all equity transactions, whether they be market or limit trades, stocks or bonds, or whether they be online or broker assisted – each investment trade is only a flat $4.95. The TradeKing commission rate structures are not tiered so all accounts get this standard fair rate regardless of account balance or trading activity. Option trades are also priced very low, at just $0.65 per contract. Mutual fund trades are priced higher at $14.95, but this seems to be in line with what other discount brokers are charging for fund transactions as well. If your investment goal is to purchase mutual funds from one particular type of brokerage company, like a Vanguard or Fidelity fund, I’d recommend going through them directly rather than buying them from TradeKing due to the higher cost of mutual fund transactions at TradeKing. But those looking to engage primarily in individual stock and index fund trading will do quite well with TradeKing, from a commissions fee standpoint.

While TradeKing’s low $4.95 stock and bond trades are not as comparatively low as some of the new offerings coming from deep discount brokers like Zecco, which is currently offering free Zecco trades, it is still substantially cheaper than the fees and rates demanded at other popular brokerages like TD Ameritrade, E-Trade, Fidelity Investments, and Charles Schwab.

On top of the already low cost commissions and fees for TradeKing, there is also no minimum deposit required to open an account, no hidden maintenance fees, no hidden inactivity fees, and no limits on minimum balances – ideal traits for new investors and those seeking a truly hassle free investing experience. Those desiring to open up a retirement fund and start maxing out their IRA contribution limits will also be pleased to know that TradeKing imposes no extraneous fees or maintenance costs for such tax deferred accounts.

Review Of TradeKing’s Online Investment Tools and Community Self Help Forum For Simple and Complex Investing

Don’t be fooled by TradeKing’s cheap stock trading prices and get the impression that the deep discount broker scrimps on investment features and trading options – TradeKing is a fully stocked investment juggernaut. Okay, calling it a juggernaut’s a bit of an exaggeration, but the broker comes complete with all of the fancy bells, whistles, and widgets you would expect from most full service premium brokerages.

For starters, TradeKing offers all the basic investment choices including stocks, options, index funds, ETF’s, and mutual funds. The broker also offers access to various bond products such as corporate, agency, municipal, strips & zero coupons, and new issue fixed-income securities. Certificates of deposits (CD’s) with a whole range of maturity dates are also available to brokerage account holders. In terms of account types, new TradeKing customers have plenty of options to choose from. They can open an individual account for ordinary trading purposes, open up a Roth IRA or traditional IRA account for their retirement needs, or even set up a tax deferred college fund for their children. In terms of investment mechanics, customers can choose to invest manually, or opt for automatic investment by taking advantage of TradeKing’s auto trading tool which automatically places trades for you based on your pre-set parameters at no extra charge. Those looking to automatically reinvest their stock and mutual fund dividends will be happy to know that TradeKing offers free automatic dividend reinvestment, with the ability to purchase fractional shares as well.

In terms of investment tools, stock fund research, and trading interface, TradeKing provides a wide selection of practical tools to enable any trader or investor to carry out his or her desired investing strategy. These tools include financial calculators, automatic alerts, advanced stock charts and graphs, as well as streaming news. The discount broker also offers a useful free TradeKing Maxit Tax Manager service that serves as a tax reporting tool and online tracker of one’s gains, losses, and cost basis statistics. The Maxit Tax Manager program helps customers stay better informed about any potential losses or gains in their portfolio with major tax implications.

But overall, one of the aspects I really like about TradeKing’s website is its intuitive and streamlined setup. While some of the other brokers require you to jump through multiple hoops and clicks before accomplishing your trading objective, TradeKing speeds certain transactions up by letting you perform multiple transactions via the same page. One example would be in the case of writing a covered call option. Rather than require you to go out and buy the stock and then execute a request to sell the call manually, TradeKing provides you a very handy and efficient Options Trading menu where you can seamlessly execute a variety of fancy option trades on the fly, such as covered calls, protective puts, and even butterfly options.

If you are a beginner investor or someone who needs a wealth of educational handholding, TradeKing provides a tremendous library of free investment and financial education materials for your learning pleasure, including how-to videos, demo tutorials, expert articles, and audio lesson seminars. More self help trading tips and investment advice can also be further gleaned from TradeKing’s community group forum called the Trader Network, which encourages the sharing and exchange of personal financial advice among TradeKing customers. The whole social media and community aspect of investing is a feature that seems to distinguish online brokerages like TradeKing from other sites, as not many other broker services offer or facilitate a similar forum based sharing of ideas, except perhaps low cost discounter Zecco.

Opening A Trade King Account – Bonus Promo Offers For New Customers

Opening a TradeKing account literally only takes few minutes, even with a close read of all of the associated terms and conditions. You’ll need to provide the standard registration information required by all brokerages such as your name, address, social security number, employer information, and indication of your level of investing expertise.

Like most brokerages, Tradeking allows customers to link a bank account to TradeKing to deposit and withdraw money via free electronic ACH transfers. Unfortunately, at the present time, TradeKing only allows you to link up a single bank account to your broker for ACH transfer purposes. For most people however (myself included), this isn’t that big of a deal since most individuals utilize only a single primary bank account, but it can be a mild nuisance for some multiple bank account holders. The other slight knock on TradeKing concerns the mandatory trading hold of 5 business days before recently deposited funds can be used for trading purposes, and the 10 day freeze before deposited funds can be withdrawn. As these account limitations are quite prevalent among most online brokerages I’ve come across, they’re more minor nuisances to be aware of than anything else.

Those looking to sign up for a new TradeKing account really ought to take advantage of the various TradeKing promotions available. For account customers of other brokerages, TradeKing offers a very attractive, no-expiration date – $150 account transfer bonus to reimburse new customers who switch to TradeKing and incur transfer fees with their former broker. If you are unable to locate a current working $50, $100, or $150 bonus offer, you may want to try calling or initiating a live chat session with them and asking if there are current promotions available. Simply visit the main TradeKing.com website and access “Live Chat” at the top (in tiny print).

Thoughts and complaints about your TradeKing experience are always welcomed! Please share your comments below.