We have investigated submonolayers of Co deposited on a Ag(001) surface with ultra low energy ion deposition and a deposition energy ranging from 5 to 30 eV. The sites of nucleation, the island densities and heights were determined with scanning tunneling microscopy. Next to randomly distributed islands on the terraces observed for every deposition energy, preferential nucleation on the upper side of the Ag steps was observed only for 5 and 15 eV. We found that for increasing characteristic length between the islands on a terrace, the number of islands per unit step length increases. This implies that step decoration is related to enhanced diffusion of Co atoms on the Ag surface during nucleation.