Charles Schwab vs Merrill Lynch

Pricing, Commissions, and Fees

Merrill Lynch

Charles Schwab

  • Stocks and ETFs: $6.95
  • Stocks and ETFs broker assisted: $29.95
  • Stocks and ETFs automated phone trades: $32.50
  • Options: $6.95 + $0.75 per contract
  • Mutual funds: $19.95
  • Merrill Edge self-directed mutual funds: 0.75% gross proceeds, $50 minimum, $250 maximum
  • Investment products: stocks, bonds, mutual funds, options, ETFs, bills, notes, bonds, CDs
  • Merrill Edge minimum deposit to open account: $0
  • All Merrill Edge fees
  • Merrill Lynch promotion code

  • Stocks and ETFs: $8.95
  • Stocks and ETFs broker assisted: $33.95
  • Stocks and ETFs phone trades: $13.95
  • Options: $8.95 + $0.75 per contract
  • Mutual funds: $76 to buy, $0 to sell
  • CDs, Corporate Bonds, Municipal Bonds, Government Agencies, Zero-Coupon Treasuries, including STRIPS and Mortgage-Backed Securities: $1 per bond, $10 minimum, $250 maximum
  • Preferred Stocks and REITs: $8.95
  • Commercial Paper and Foreign Bonds, Unit Investment Trusts: call for pricing
  • Investment products: stocks, bonds, mutual funds, futures, Treasury issues, options, CDs, insurance, ETFs, annuities, non-U.S. securities and ADRs, WEBs and Canadian foreign orders
  • Charles Schwab minimum deposit to open account: $1,000 for cash account, $2,000 for margin account
  • All Charles Schwab fees
  • Charles Schwab login, Charles Schwab promotions and Carles Schwab referral

Merrill Lynch vs Charles Schwab: Pros

Merrill Lynch

Charles Schwab

  • Free trades if an account meets certain conditions
  • Good banking services including a free checking account
  • No surcharges on penny stocks, large orders, or extended-hours trading
  • No account maintenance or inactivity fees
  • Good investment research tools from Morningstar, Bank of America Merrill Lynch, S&P Capital IQ, Thomson Reuters, and Recognia
  • Free DRIP (dividend reinvestment; client must call customer support to set it up)
  • No-fee IRA accounts

  • Personal guidance is available at no additional cost
  • 300+ offices for personal visits
  • Rich selection of investment products
  • No surcharges on penny stocks, large orders, or after-hours trading
  • No account maintenance or inactivity fees
  • Great customer service
  • Free DRIPs (dividend reinvestment plans)
  • Investment research available from several companies
  • 200 ETFs with no commissions

Merrill Lynch vs Charles Schwab: Cons

Merrill Lynch

Charles Schwab

  • Technical issues (unusable login cards, website going down, etc.)
  • High margin rates
  • Advanced trading platform, MarketPro, is available to clients with total combined balance of $50,000+, or making 15 trades per quarter
  • Mutual funds subject to self-directed short-term redemption fee of $39.95 if held less than 90 days

  • High commissions on stocks, options, mutual funds, and ETFs
  • High margin rates

Charles Schwab vs Merrill Lynch: Summary

Charles Schwab (review) is one of the best-known and largest online brokerage houses in the nation. Merrill Edge (formerly also known as Merrill Lynch/Bank of America brokerage - review) is a new, low cost version of a troubled Merrill Lynch, which almost went bankrupt during crisis in 2008, and was saved by the U.S. government by forcing Bank of America to buy this once powerful investment bank.

Stock and ETF trades are priced $8.95 at Charles Schwab and $6.95 at Merrill Lynch. Mutual funds are $76 to buy and free to sell at Schwab and $20 per transaction at Merrill. Both brokerage firms don't charge annual IRA and IRA setup fees. However, that was not enough to be included in our list of Top IRA Companies in 2017.

Merrill Lynch and Charles Schwab do not offer an online investor community where users can ask questions and learn from more experienced members. Both firms also do not provide virtual trading accounts that allows users to practice trading and test trading strategies without risking real money. Both features are extremely helpful to many beginners but clients of all experience levels use them. For anyone new to investing we recommend checking out our Best online brokers for beginners recommendations.

With Charles Schwab investors get decent banking services, wide selection of investment products and great customer service. Both Merrill Lynch and Charles Schwab offer their clients free dividend reinvestment program for stocks as well as varied and comprehensive third party investment research from a few trusted sources such as Morningstar and S&P Capital IQ.

Commissions on stocks, ETFs, mutual funds and options are well above average at Charles Schwab, and pretty close to average at the competitor. Both firms have high margin rates, not giving clients an opportunity to take advantage of historically low interest rates environment.

When it comes to recommendations, overall, Charles Schwab is a good option for retirement and "buy-and-hold" investors. Considering history, we are not comfortable recommending Merrill Lynch to our readers: all other brokerage firms survived Great Recession without the government bailout.

Updated on 1/12/2017.

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