Merrill Edge Self-Directed Review 2024: Pros, Cons and How It Compares
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Our Take
4.4
The bottom line:
Pros & Cons
Pros
Commission-free stock, options and ETF trades.
Integrated with Bank of America.
High order execution quality.
24/7 phone support.
Cons
No fractional shares.
Low interest rates on uninvested cash.
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Full Review
Integration with Bank of America: Merrill Edge is a product of Bank of America’s acquisition of Merrill Lynch, and it’s clear that the parent company has made the effort to create a seamless experience for clients who use both services. You can view Bank of America accounts and Merrill Edge accounts with a single login.
Customer support: Merrill Edge is one of the few brokers we review that offers 24/7 phone, email and online chat help for users, as well as in-person meetings at Bank of America branches.
Educational resources: In addition to a library of educational articles, courses, videos, webinars, virtual events and free tools and calculators, Merrill Edge has an Idea Builder tool to help newer investors find investments that appeal to them, such as ESG products.
Where Merrill Edge Self-Directed Investing falls short
Investment selection. Advanced traders may find fewer securities on offer.
Fractional shares. Fractional shares let investors buy by the dollar amount, rather than the share amount. This makes it much easier — and more affordable — to diversify, but Merrill Edge doesn’t offer this ability.
Alternatives to consider:
For investment selection: Charles Schwab, Fidelity
For fractional shares: FidelityJ.P. Morgan Self-Directed Investing
What type of investor should choose Merrill Edge Self-Directed Investing?
Bank of America customers: Merrill Edge Self-Directed Investing is available within the Bank of America mobile app, and you can seamlessly go from checking your credit card balance to trading in just a few taps.
Beginner investors: Merrill Edge offers a huge selection of educational articles, videos, webinars, courses, calculators and other tools — and if users need in-person help, they can always go to a Bank of America branch.
Environmental, social and governance investors: Merrill Edge is one of the only brokers we review that offers a dedicated tool, Idea Builder, that helps ESG investors find stocks and ETFs that match their values.
What the Nerds think 🤓
Sam Taube, lead investing writer
"The signup process at Merrill Edge can be somewhat bumpy — but if you're a Bank of America customer, the experience is fairly streamlined once you're signed up. You can access your Merrill Edge account easily from your Bank of America app, and trade with its simple, intuitive mobile interface. "
Merrill Edge Self-Directed at a glance
Account minimum | $0. |
Stock trading costs | $0. |
Options trades | $0 + $0.65 per contract. |
Account fees (annual, transfer, closing, inactivity) | No annual, inactivity or partial transfer fees; $49.95 full outgoing account transfer fee. |
Number of no-transaction-fee mutual funds | Over 2,000. |
Tradable securities | Stocks, mutual funds, ETFs, options, bonds. (Treasuries, CDs and bond funds at no additional charge. Corporates and municipal bonds for an additional fee.) |
Interest rate on uninvested cash | 0.01%. |
Trading platform | Three trading platforms:
Some technical issues with the platforms. |
Mobile app | Available for iOS and Android. Advanced features mimic a desktop trading platform. Also available within the Bank of America app. Android app has some mixed reviews. |
Research and data | Research, ratings and reports from a handful of providers, including Bank of America, MSCI, Lipper, Morningstar and CFRA. |
Customer support options (includes how easy it is to find key details on the website) | 24/7 phone, chat, email, with in-person appointments available during Bank of America branch open hours. |
How to sign up for a Merrill Edge Self-Directed Investing account
Merrill Edge strives to offer an easy signup experience, especially for Bank of America customers. While the integration with other Bank of America accounts is nice, the signup process isn't always smooth. One of our testers (who is a long-time Bank of America customer) noticed several issues with non-responsive web pages during the signup process, and also noted that the initial funds transfer took a couple of days to settle.
However, once you've signed up and funded your account, it's easy to access Merrill Edge Self-Directed Investing within the Bank of America app, and make trades in just a few taps. After initial account funding, transfers between Merrill Edge accounts and other Bank of America accounts are instant.
What to know about Merrill Edge Self-Directed Investing's fees
Merrill Edge has no minimum account requirement, and charges no commissions on stock or ETF trades. There are also no commissions on option trades, though you will still have to pay $0.65 per contract, a fairly typical charge among brokerages.
Merrill Edge gets high marks when it comes to account fees: There are no partial transfer, annual or inactivity fees for brokerage accounts. If you close an account and transfer out all assets, you’ll pay a fee of $49.95, but that charge is still lower than at some other brokerages.
Merrill Edge Self-Directed Investing's trading platforms and apps
Merrill Edge Self-Directed Investing's mobile platform compares favorably to other mobile trading experiences from big banks, such as J.P. Morgan. Trading is easy and intuitive, as is switching between Merrill Edge and checking your account balances. The platform also has built-in security features, given that it's nested within the Bank of America app, which logs you out after a period of inactivity.
Merrill Edge also offers a standalone mobile app, which is highly rated among iOS users, but receives lower ratings from Android users. The app connects with a Bank of America account, letting customers get a holistic view of their financial situation in a single app.
How we nerd out testing trading platforms
Our reviewers — who are writers and editors on NerdWallet’s content team — test every online broker platform in our analysis hands-on. That way, we can report on every aspect of the user experience, from funding a new account to placing trades.
We score each broker against criteria that factor in the capabilities offered and the actual user experience of trading with those capabilities. This includes how easy it was to sign up for and fund a new account. Note that a broker may score very highly for the platforms it offers but low for the experience of actually using that platform. Our analysis scores these criteria separately and weighs them evenly when factored into the broker’s overall score. As a result, a broker can offer an advanced trading platform. Still, if it is clunky to use or the process of opening an account is unnecessarily arduous, their score will reflect that.
Like many brokers, Merrill Edge offers website trading and an active trader platform, called Merrill Edge MarketPro. The company’s website is clean and intuitive and offers several screeners so you can quickly sort through stocks, mutual funds, ETFs and bonds. There's also a "quick trade" feature that lets you make stock and ETF trades from just about any page on the website.
The MarketPro platform, available to all Merrill Edge customers, is also robust, with much of what active traders expect: interactive charts, alerts, Level II quotes (which show real-time bid and ask prices for Nasdaq stocks), a customizable dashboard, and streaming data and news. All of the platforms give investors access to over-the-counter (OTC) stocks at no additional cost. They also allow extended trading hours — from 7:00 a.m. to 8:00 p.m. Eastern time on weekdays.
Merrill Edge Self-Directed Investing's investment selection
While most investors will find Merrill's selection of stocks, options, ETFs and mutual funds (including over 2,000 no-transaction-fee funds) more than adequate, active traders eager to invest in futures or forex will need to go elsewhere.
It’s also worth pointing out that Merrill Edge doesn’t offer fractional shares. Such an offering is becoming more commonplace among brokers, as it lets investors with less capital build diverse portfolios. Without fractional shares, this can be harder to do. (Learn more about fractional shares.)
When it comes to bonds, Merrill offers investors access to Treasuries, CDs and bond funds at no additional cost, as well as corporate and municipal bonds for an additional fee of $1 per bond (capped at a minimum of $10 and a maximum of $250).
Merrill's margin rates are on the higher end among brokers, ranging from the high-13% range to the low-11% range, depending on account balance. The broker also does not offer access to initial public offerings (IPOs).
Other key Merrill Edge Self-Directed Investing features
Research and data
The company provides research from its own BofA Global Research, as well as third-party providers, including Morningstar, MSCI, Center for Financial Research & Analysis and Lipper. Mutual fund reviews and rankings come from Morningstar and Lipper. Although these are reputable data providers, Merrill doesn't offer free access to as many providers as some other brokers.
Customer support
Customer support is a strong suit for Merrill Edge, with 24/7 phone, chat and email support. For those who want in-person customer support, appointments are available at Bank of America branches during the bank’s business hours.
Merrill Edge also scores highly for its educational offerings and financial planning tools, with an extensive suite of educational multimedia content for beginner investors and long-term investors preparing for retirement, plus retirement calculators. However, its website can be somewhat confusing to navigate.
Execution quality
Merrill Edge boasts excellent order execution quality — more than 99% of trades are executed at the National Best Bid and Offer (NBBO) price or better. This may be a consequence of Merrill's decision not to accept payment for order flow (PFOF), a business model in which customer trades are routed to trading firms for execution, potentially resulting in slower and less efficient execution.
The average execution quality of all brokers we review was 96.95% as of Oct. 16, 2024. That means 96.95% of orders sold for at a price that was at or better than the National Best Bid and Offer. Executing at or above the NBBO means you may receive a price improvement or a better share price than you were originally quoted.
IRA account
Merrill Edge offers both Roth and traditional IRAs, which are individual retirement savings accounts. IRAs have lucrative tax advantages — including tax deductions on contributions or tax-free distributions in retirement, depending on the type of IRA you choose — and experts recommend using them when saving for retirement. You can have an IRA in addition to another brokerage account, such as one you might use for non-retirement goals or to trade stocks.
Good to know about Merrill Edge Self-Directed Investing
Low interest rate on uninvested cash
Merrill Edge doesn't offer the lowest cash interest rate of any broker we review — some don't pay any interest at all. But among brokers who do pay interest on uninvested cash, Merrill Edge offers one of the lowest rates — just 0.01% per year, regardless of account balance.
Is Merrill Edge Self-Directed Investing safe?
Merrill Edge accounts are insured by the Securities Investor Protection Corporation (SIPC) for up to $500,000 per account, up to $250,000 of which can be cash. This insurance protects customer funds from broker insolvency. All investment comes with a risk of loss, and SIPC doesn't cover investment losses.
The broker is also regulated by the Securities and Exchange Commission and the Financial Industry Regulatory Authority to ensure its compliance with securities laws and industry standards.
Is Merrill Edge Self-Directed Investing right for you?
Regardless of your experience as an investor, there's a good chance Merrill Edge has much of what you would need — high-quality research, a good investment selection, helpful customer service and an innovative user experience. The company ranks among the top of the field when it comes to online brokers.
