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Fidelity Review

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Merrill Lynch vs Fidelity Investments

Fidelity vs Merrill Lynch 2016: Account Pricing, Commissions, Fees

Fidelity Investments

Merrill Lynch

  • Stocks and ETFs: $7.95
  • Stocks and ETFs broker assisted: $32.95
  • Stocks and ETFs FAST (automated service phone): $12.95
  • Options: $7.95 + $0.75 per contract
  • Mutual funds: $49.95 ($75 for some funds; Fidelity funds are commission free) to buy, $0 to sell ($49.95 if sold within 60 days)
  • Bonds (U.S. Treasury Auctions, including TIPS Auctions, U.S. Treasury Bills, Notes), primary market CDs: on a net yield basis
  • GSE (Agency Securities), secondary CDs, Municipals, Corporates (BBB- or higher), CATS/TIGRS, Corporates (BB+ or lower): $1 per bond ($250 max.; $50 max if maturing in one year)
  • Commercial Paper: $50 per transaction
  • Investment products: stocks, bonds, mutual funds, options, commercial paper, forex, foreign stocks, UITs, precious metals, ETFs
  • Fidelity minimum deposit to open account: $2,500 ($0 for Rollover IRA; $2,500 or $200 per month for ROTH and Traditional IRA)
  • All Fidelity fees
  • Fidelity login, Fidelity promotion

  • 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
  • Merrill Lynch promotion code

Fidelity vs Merrill Lynch: Pros

Fidelity Investments

Merrill Lynch

  • No surcharges on penny stocks, large orders, or after-hours trading
  • Great investment research tools with large selection of independent research from 12 firms
  • Huge selection of commission-free mutual funds
  • Free DRIPs (dividend reinvestment plans)
  • No account maintenance or inactivity fees
  • Great customer service
  • Rich selection of investment products
  • Good banking services (checking, savings accounts, and credit cards)
  • 84 commission-free ETFs

  • Free trades if the 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

Fidelity vs Merrill Lynch: Cons

Fidelity Investments

Merrill Lynch

  • Very high commissions - $49.95 ($75 for some funds) - to purchase non-Fidelity mutual funds
  • $12 annual Low Balance Fee for each noncore Fidelity mutual fund if balance is under $2,000
  • High margin rates
  • Advanced trading platform, Active Trader Pro, is available only to clients making 36+ trades per year
  • High $2,500 minimum to open an account

  • 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

Merrill Lynch vs Fidelity Investments: Comparison Summary

Fidelity Investments (Fidelity Investments review) is one of the best known and largest online brokerage houses in the nation. Merrill Lynch (Edge) (Merrill Lynch review) is a new discount brokerage version of almost bankrupt and rescued at the last minute Merrill Lynch.

When it comes to costs for stock/ETF trades, both companies lowered their commissions to a much more reasonable levels: $7.95 at Fidelity and $6.95 at the competitor. These commissions are close to median rates in the industry.

Fidelity Investments provides its clients with richer than Merrill Lynch selection of investment products, access to rich offering of third-party investment research as well as many Fidelity-family mutual funds.

The company is a better choice than Merrill Lynch for novice investors, even though it did not make it into our list of Best Brokerages for Beginners.

Merrill Lynch and Fidelity Investments don't charge retirement account fees (setup and annual/maintenance), though it was not enough to be included in Top IRA Firms in 2016 article.

Both brokerage houses have some advantages, but we are not excited about either of these companies. We recommend Fidelity Investments for a retirement account and to "buy-and-hold" investors. For the rest there are other firms to consider, that offer lower commissions, excellent trading tools and client services, such as Scottrade and TradeKing.

Updated on 1/14/2016.

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Review discount online brokerage firms comparison: Merrill Lynch or Fidelity Investments? Differences between investment companies. Recommendation for stocks, options, ETFs, mutual funds, bonds investors. Fidelity versus Merrill Lynch for beginner investors, long term, individual retirement accounts, active/day traders. See what stock broker service is better, cheaper, offers lower fees, cost, rated higher and easier to use. Which broker should you choose?

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