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Charles Schwab versus Merrill Lynch

Merrill Lynch vs Charles Schwab 2015: Account Pricing, Commissions, 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 Lynch fees

  • 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. OneSourceĀ® Mutual Funds - free
  • 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
  • All Charles Schwab fees

Compare Merrill Lynch and Charles Schwab Pros

Merrill Lynch

Charles Schwab

  • Free trades if the account meets certain conditions
  • Good banking services including a free checking account
  • Good research tools
  • Free DRIP (dividend reinvestment, but you must call customer support to set it up)

  • Personal guidance is available at no additional cost
  • 300+ offices for personal visits and deposits
  • Great, varied research
  • Rich selection of investment products, including large number of mutual funds - over 14,500
  • No surcharges on penny stocks, large orders, or after-hours trading
  • No account maintenance or inactivity fees
  • Very good customer service (but no chat)
  • Free DRIP (dividend reinvestment plan)

Compare Merrill Lynch and Charles Schwab Cons

Merrill Lynch

Charles Schwab

  • Limited, poorly designed trading tools and charts
  • Terrible trade execution
  • Technical issues (unusable login cards, website going down, etc.)
  • Customer service complaints
  • Poor selection of investments
  • High margin rates
  • 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
  • Company doesn't list all its fees on its website
  • Advanced trading platform available only to clients executing three or more trades per month
  • Long, complicated new account setup and funding
  • No free streaming quotes (requires 120+ equity and options trades in the last 12 months, or 30+ equity and options trades in either the current or previous quarter, or $1 million in assets)

Merrill Lynch vs Charles Schwab: Comparison Summary

Charles Schwab (Charles Schwab Review) is one of the best-known, largest online brokerage houses in the nation. Merrill Edge (formerly known as Merrill Lynch/BOfA/Bank of America brokerage - Merrill Edge Review) is a new incarnation of a troubled Merrill Lynch, which almost bankrupted during financial crisis in 2008, and was rescued by the U.S. government by forcing Bank of America to buy this once powerful investment firm.

Charles Schwab and Merrill Edge offer commissions of $8.95 and $6.95 per stock and ETF trade respectively. Both brokerage firms don't have annual IRA and IRA setup fees. In spite of that, they were not included in our list of Top IRA Companies in 2015.

Merrill Edge and Charles Schwab lack an online member community where users can ask questions and learn from more experienced investors. Both firms also do not offer virtual trading that allows users to practice trading and test trading strategies without risking real money. If you are new to investing, check out our Best online trading for beginners recommendations.

With Charles Schwab investors get decent banking services, wide selection of investment products and great customer service. But its website needs redesign and capabilities upgrade.

There are a lot of complaints from Merrill Edge's customers on the whole range of issues: trading tools bugs, customer service, mutual funds availability, and order executions.

Charles Schwab bought one of the best online brokers in the industry, OptionsXpress (OptionsXpress review), that functions as part of Schwab's family of investment services. OptionsXpress provides much better than the Schwab set of trading tools, unmatched selection of free services, very cheap mutual fund commission ($10 versus $76 at Schwab), simulated trading environment, and 50 free trades bonus for opening new account.

Overall, Charles Schwab is a good option for retirement and "buy-and-hold" investors. Merrill Edge has too many problems. We also suggest investors research high rated firms in our Best Brokerages article for more ideas for a brokerage account.

Merrill Lynch Website

Merrill Lynch review
Check Schwab Website

Charles Schwab review

This article was updated on 2/9/2015.

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