Merrill Edge vs. TD Ameritrade
Merrill Edge and TD Ameritrade are two of the best-known investment brokerages. But is either the right choice for you? Each has particular strengths and may prove to be the investment platform for your needs. In this review, we’ll present a side-by-side comparison of the two platforms so you can decide if either is right for you. Here's our Merrill Edge vs TD Ameritrade comparison.
In this Comparison:
Overview of Merrill Edge vs. TD Ameritrade
Here’s a quick overview of the similarities and differences between Merrill Edge and TD Ameritrade. It’s a “high altitude view” of the two platforms, but you can get a more detailed picture as you read through our comparison.
| Feature / Broker |  |  |
|---|---|---|
| Rating | 8/10 | 9/10 |
| Trading hours premarket & after hours | Premarket: 7 a.m. to 9:30 a.m. EST After hours: 4:01 p.m. to 8 p.m. | Premarket: 7 a.m. to 9:28 a.m. EST After hours: 4:02 p.m. to 8 p.m. |
| Demo account | N/A | Yes |
| Minimum deposit | Self-directed Investing: $0 Guided Investing: $1,000 or $20,000 | $0 |
| Day trading | Yes | Yes |
| Margin rates | Less than $25K: 8.625% $25,000 – $99,999: 7.50% $100,000 or more: must call for latest rates | Less than $10,000: 9.50% $25,000 – $49,999.99: 9.00% $50,000 – $99,999.99: 8.00% $100,000 – $249,999.99: 7.75% $250,000 – $499,999.99: 7.5% $500,000 or more: must call for latest rates |
| Fees | Stocks, Options, ETFs: $0 Commission (+ $0.65 per contract on options) Mutual funds: $19.95 | Stocks, Options, ETFs: $0 Commission (+ $0.65 per contract on options) Mutual funds: $49.99 |
| Payment methods | Check, wire transfer from external account; instant transfers from linked Bank of America account, and account rollovers | Check, wire transfer from external account; account rollovers and transfer of physical stock certificates |
| Security features | SIPC insurance + two-factor authentication | SIPC insurance + two-factor authentication |
| Minimum and maximum trades | None | None |
| Regulator | Securities and Exchange Commission (SEC) | Securities and Exchange Commission (SEC) |
About Merrill Edge
Once an independent investment brokerage operating under the name Merrill Lynch Pierce Fenner & Smith, the firm was merged into Bank of America to form Merrill Edge. As a result of the combination, there are now more than 1,500 Merrill Edge advisors working in Bank of America branches across the country.
- Merrill Edge offers both self-directed investing and a managed option through the Merrill Edge Guided Investing robo advisor. For customized investing, you can also invest with a Merrill Edge advisor.
- As one of the better-established brokerage firms, Merrill Edge offers trading in nearly all types of securities, including stocks, bonds, mutual funds, exchange-traded funds (ETFs), options, and more.
- Through their membership with Bank of America, you can also maintain banking and investing seamlessly connected within the same organization.
About TD Ameritrade
Formerly owned by Toronto Dominion Bank (which is where the TD abbreviation comes from), TD Ameritrade operations in the U.S. were recently acquired by Charles Schwab. TD Ameritrade will continue to function as an independent investment brokerage firm, though it may be folded into Schwab at some point in the future.
- TD Ameritrade is a full-service investment brokerage platform, offering commission-free trades in stocks and ETFs. But they include participation in several other investment types not offered by Merrill Edge.
- TD Ameritrade can accommodate individual and joint taxable accounts, solo 401(k) accounts, trusts, partnerships and limited partnerships, education accounts, and virtually every type of IRA. They have one of the largest offerings of no-fee mutual funds in the investment industry.
How Are Merrill Edge and TD Ameritrade Similar?
Merrill Edge and TD Ameritrade are both full-service investment brokerage platforms, offering commission-free trades in stocks and ETFs. Both also accommodate self-directed investing as well as multiple managed investments plans.
How Are They Different?
Both TD Ameritrade and Merrill Edge are leading commission-free brokers. But it's time to dive into how these brokers differ so you can pick the broker that's best for your investing goals.
Merrill Edge Unique Features
Merrill Edge has the advantage of having investment advisors located in hundreds of Bank of America branches across the country. The tie-in with Bank of America also enables customers to both bank and invest within the same organization. This is possible because Merrill Edge and Bank of America are linked seamlessly.
Merrill Edge also offers their Merrill Edge Guided Investment robo advisor, which is a product TD Ameritrade doesn’t match at this time.
Finally, Merrill Edge is one of the best brokers for ESG investing since it has a range of tools and screeners to help you find sustainable investing ideas that align with your goals. You can even check your portfolio's overall ESG investment score to track how you're doing.
TD Ameritrade Unique Features
TD Ameritrade offers more no-fee mutual funds than Merrill Edge (4,200, compared to about 3,000 for Merrill Edge). It also offers forex trading, futures, and initial public offerings for qualified accounts; three investment choices that are not available with Merrill Edge.
TD Ameritrade also offers a paperMoney virtual trading account, giving you an opportunity to learn to invest, or improve your investment skills, without risking real money. Merrill Edge does not offer a comparable paper trading account.
Although TD Ameritrade does not currently offer trading in cryptocurrency, that feature is likely coming soon. TD Ameritrade is working with ErisX with the hope of making crypto trading available on the platform. However, qualified clients can trade bitcoin futures and micro-bitcoin trading futures through TD Ameritrade.
TD Ameritrade vs. Merrill Edge – Pricing & Plans
Merrill Edge Fees
The fees for Merrill Edge Self-Directed Investing are:
- Monthly or annual fee: $0 for both taxable and IRA accounts
- Stocks, options, ETFs: $0 Commission (+ $0.65 per contract on options)
- Broker assisted trades: $29.95
- Mutual funds: $19.95 for no-load, transaction fee funds; $0 for load funds, load-waived funds and no-load funds, no-transaction-fee funds (NTF)
- Fixed income and bonds: $0 for new issues and brokered CDs; $0 for treasuries (both auction and secondary); secondary trades of corporate, municipal, and government agency bonds, $1 per bond, a $10 minimum and a $250 maximum
And for the Merrill Edge Guided Investing robo advisor, the fees are:
- Merrill Edge Guided Investing Online: 0.45% per year
- Merrill Edge Guided Investing Online with advisor: 0.85% per year
Its DIY-investing fees are quite competitive with TD Ameritrade and other brokers. However, its robo advisor fees are on the high end versus main competitors like Betterment and Wealthfront, so keep this in mind.
TD Ameritrade Fees
- Monthly or annual fee: $0 for both taxable and IRA accounts
- Stocks, ETFs: $0 Commission
- Broker assisted trades: $25.00
- Mutual funds: $49.99 for no-load; $0 for load funds and no-load, no-transaction-fee funds (NTF)
- Fixed income and bonds: Commission-free for both new and secondary issues, with each available on a net yield basis.
Overall, there's no major difference in fees between Merrill Edge and TD Ameritrade unless you're looking at Merrill Edge's robo advisor.
Paper Trading Comparison
Merrill Edge
TD Ameritrade
You can participate in paper trading with TD Ameritrade through its thinkorswim trading platform. Versions are available for desktop and mobile, and each allows you to take advantage of their paperMoney virtual trading platform.
You’ll start with $100,000 in virtual money, enabling you to test various investment strategies completely risk-free. Although it’s a virtual account, you can still take advantage of all trading tools available on TD Ameritrade. This is one unique selling point TD Ameritrade offers over Merrill Edge.
ESG Investing Options
Merrill Edge is superior to TD Ameritrade at this time for ESG investing support. With Merrill Edge, you get to monitor your entire portfolio to gauge its ESG impact and score. And you can invest in ESG-friendly funds through its robo advisor.
In fairness, TD Ameritrade is catching up on the ESG front thanks to Charles Schwab's acquisition. For example, you can invest in ESG portfolios through Charles Schwab's robo advisors, which is similar to Merrill Edge. But for standalone research and ESG screening, Merrill Edge is one of the top brokers out there.
Foreign Investments Comparison
Neither Merrill Edge nor TD Ameritrade offers direct investing in stocks trading on foreign markets. However, each platform does allow you to invest in foreign stocks through the purchase of American depositary receipts (ADRs).
It is possible to invest in foreign stocks indirectly, through mutual funds and ETFs that invest in foreign markets.
Neither platform accommodates trading in cryptocurrency at this time.
Research Options Comparison
Merrill Edge
- Stocks: Access to stock screeners with more than 200 advanced filters, investing insights from Bank of America Global Research, videos, and webcasts, as well as third-party research from Morningstar and CFRA. Merrill Edge also offers Morningstar’s investor classroom.
- ETFs: Screening, tracking, and comparison tools to evaluate and find ETFs for your portfolio. You can also use advanced filters to pinpoint the best performing funds.
- Mutual funds: Fund ratings and rankings from both Morningstar and Lipper, as well as articles and webcasts. Merrill Edge also provides the top mutual underperformers, based on performance over one year, three years, five years, and 10 years.
- Options: Includes an options screener to identify basic option attributes or security fundamentals. You can also use more advanced criteria, like volatility or option value. Option reports, such as the US Option Overwriting Trade Ideas, can be used to help to identify single-stock covered call writing opportunities through quantitative screening.
If you want in-depth, free research, Merrill Edge is one of the best online brokers you can use. And the premium research you get from Bank of America Global Research is definitely a selling point.
TD Ameritrade
TD Ameritrade also offers comprehensive research for different investment classes. That starts with its Market Edge feature, offering timely information and technical analysis on markets using quantitative and technical analysis.
- Stocks: Provides stocks overview and stock charts, as well as screeners that meet your criteria. Criteria can be set based on strong buys, life cycle, highest alpha, lowest expense ratio, and many other filters.
- ETFs: The ETF Market Center provides both research and monitoring of your funds with predefined screens based on life cycle, commodities, bear markets and other criteria of your choosing.
- Mutual funds: The Premier List, used in conjunction with Morningstar, can help identify the top mutual funds. The list is compiled quarterly as an objective and unbiased resource focusing on no-transaction-fee funds across 45 fund categories.
Overall, TD Ameritrade is still an excellent broker, especially for newer investors. Although Merrill Edge can get a slight edge in the research options.
Customer Service Comparison
Merrill Edge's customer service is available by phone, 24 hours a day, seven days per week.
TD Ameritrade's customer service is available by direct message and by phone, 24 hours a day, seven days per week.
How Safe Are They?
Merrill Edge
Accounts held with Merrill Edge are protected by SIPC insurance for up to $500,000 in cash and securities, including up to $250,000 in cash. This coverage protects investors from broker failure, but not losses due to market factors.
For specific accounts security, Merrill Edge uses security measures that comply with applicable federal and state laws. That includes device safeguards and secured files and buildings, as well as oversight of third-party service providers. For login security, customers are offered two-factor authentication, as well as Touch ID and Face ID on the mobile app.
TD Ameritrade
Accounts held with TD Ameritrade are protected by SIPC insurance for up to $500,000 in cash and securities, including up to $250,000 in cash. This coverage protects investors from broker failure, but not losses due to market factors.
TD Ameritrade uses 128-bit encryption on the transmission of all data transmitted between customer computers and the company website. They also employ the use of single-use security codes via text message to access your account.
Merrill Edge vs. TD Ameritrade – Which One Should You Choose?
Merrill Edge and TD Ameritrade are similar investment platforms in most respects. But there are significant differences.
For example, Merrill Edge is an excellent choice if you prefer face-to-face contact with investment advisors. That’s because they have investment advisors on staff at hundreds of Bank of America branches across the country. Merrill Edge also offers a robo advisor option, in case you want to have some or all your portfolio professionally managed at low cost. And it's better than TD Ameritrade if ESG investing is important to you.
Merrill Edge may also be the better choice if you plan to invest on margin. TD Ameritrade also offers margin trading, but Merrill Edge offers lower margin interest rates, particularly on large accounts.
Finally, Merrill Edge may be a natural choice if you are a Bank of America customer. The investment platform is closely linked to banking, allowing seamless transfers. What’s more, you’ll be able to take advantage of Bank of America’s Preferred Rewards, which will entitle you to credit card reward bonuses, discounts on loans and waivers on monthly bank fees.
In contrast, TD Ameritrade is slightly more beginner-friendly, and it has some of the best customer service out there. And if you want to try out paper trading, it's the obvious choice over Merrill Edge. Plus, you get a few more investing options, like forex and IPOs, that might be of interest.
Alternatives to Merrill Edge and TD Ameritrade
If you decide that neither Merrill Edge nor TD Ameritrade is the right investment brokers for you, consider either of the following:
E*TRADE
E*TRADE offers commission-free trades for stocks, ETFs, and options. The company offers top-of-the-line customer service, with access to plenty of research and investment tools. You can open an account with no money at all, and E*TRADE offers more than 4,500 no-transaction-fee mutual funds, as well as a robo advisor, E*TRADE Core Portfolios.
Ally Invest also offers commission-free trades for stocks, options, and ETFs. And like other brokers on this list, it has both self-directed investing and a robo advisor option through its Ally Invest Robo Portfolios. This broker is particularly strong with options trading and mutual funds, offering more than 12,000 funds at fees of just $9.95 per trade.
The Bottom Line: Which Is Best?
Both Merrill Edge and TD Ameritrade rank among the better investment platforms in the industry. Which will be the best for you will depend on your own investment preferences.
Once again, Merrill Edge will be the better choice for those who already bank with Bank of America, ESG investors, and anyone looking for a managed portfolio option. Meanwhile, we prefer TD Ameritrade for new investors and anyone wanting the best customer service possible.
Both brokers are excellent ways you can start investing. Hopefully, our TD Ameritrade vs. Merrill Edge breakdown helps you decide on which option is best for you.
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