Merrill Edge: Latest Discount Broker for Free Equity and ETF Trades
- Discount Stock Broker:
- Merrill Edge
Even though it's possible to trade stocks and ETFs for free with Merrill Edge from Bank of America, the requirement for free trades is rather high. If you can't meet the free trade requirement, you can still buy and sell at $8.95. Merrill Edge's standard commission fee is not as attractive as other discount brokers though.
We all know that Bank of America has a broker unit which also offers commission-free equity trades. However, to qualify for the 30 free trades per month, you will have to have at least $25,000 combined assets in deposit accounts with BofA. Though the dollar amount required for free trades is the same as Zecco ($25,000 account minimum for 10 free trades per month), you only need to have that amount in Zecco brokerage account to get the free trades. So Zecco definitely makes a better choice between the two, if free trades is your only concern.
Anyway, now that Merrill Lynch is part of Bank of America, BofA has transformed its broker unit and launched a brand new online discount broker called Merrill Edge early this week, adding some new features to make it more appealing to small investors.
Basically, Merrill Edge inherited its predecessor’s requirements on getting up to 30 commission-free equity or ETF trades per month, i.e., you will need to meet either one of the following two conditions:
- Maintain total combined balances of $25,000 or more in your Bank of America deposit accounts (checking, savings, FDIC-insured CDs and FDIC-insured IRAs);
- Maintain total combined balances of $25,000 or more in cash balances in your Merrill Edge self-directed or Advisory Center accounts with the Bank Deposit Accounts sweep option with your Cash Management Account(CMA) or Retirement Assets Savings Program (RASP) sweep with your IRA.
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One improvement over the old BofA broker account is that if you don’t qualify for the free trades or you are over the 30 free trades/month limit, the commissions are still low, within the range of commissions charged by other discount brokers. The actual commission has three tiers, depending on the total assets with the broker:
- Standard: $8.95/trade for total combined balances in Merrill Lynch investment accounts and Bank of America deposit accounts up to $250,000, or make 0 – 29 trades per quarter.
- Preferred: $6.95/trade for balance between $250,000 and $1 million, or make 30+ trades per quarter.
- Superior: $4.95/trade for balance above $1 million, or make 60+ trades per quarter.
For options trading, there’s an additional cost of $0.75 per contract.
In addition, Merrill Edge also offers mutual funds. For no load/no transaction fee funds, there’s no additional costs when you buy those funds through Merrill Edge. This actually is better than most other discount brokers which usually charge hefty fees for trading mutual funds (see discount broker comparison for details on mutual fund commissions).
BTW, while Merrill Edge’s commission isn’t that expensive, it does charge a $25 quarterly account maintenance fee unless yo have total combined balances of $50,000 or more in Merrill Lynch investment accounts and Bank of America deposit accounts, or executes 60+ trades per year or 15+ trades per quarter in one or more self-directed accounts, or are a U.S. Trust client. The minimum deposit to open an account is $2,000, which is quite high compared to other online discount brokers.
Now that you have one more discount broker to choose from, will you be interested in Merrill Edge?
- $8.95 per trade
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