Merrill Lynch vs Fidelity Investments

Fidelity vs Merrill Lynch: Account Pricing, Commissions, Fees

Fidelity Investments

Merrill Lynch

  • Stocks and ETFs: $7.95
  • Stocks and ETFs broker assisted: $32.95
  • 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, UITs, 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 Investments 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 Edge 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
  • Good selection of commission-free mutual funds
  • Free DRIPs (dividend reinvestment plans)
  • No account maintenance or inactivity fees
  • Great customer service
  • Good banking services (checking, savings accounts, and credit cards)
  • 91 commission-free ETFs

  • 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

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

Can I Buy Fidelity Mutual Funds On Merrill Lynch?

For investors wondering "Can I buy Fidelity funds on my Merrill Lynch account?", we wrote this article that explores Merrill Lynch's mutual funds offerings in detail.

Comparison Summary

Fidelity Investments (read review) is one of the best known and largest online brokerage houses in the nation. Merrill Lynch (Edge) (read review) is a new discount brokerage version of once 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.

There are 3,580 NTF mutual funds at Fidelity. Around half of these also have no load. In total, Fidelity customers can trade over 11,000 mutual funds. Transaction-fee funds are $75 or $49.95 to purchase. The fee varies based on the particular fund. Although the buy side is a little expensive, a transaction-fee fund has no charge to sell.

Far fewer mutual funds are available at Merrill Edge. The broker has a grand total of less than 5,000 mutual funds. Only 800 of these are no-load and no-transaction-fee products. Mutual funds that aren't NTF cost $19.95. This charge is applied to purchases, sales, and exchanges. There is also a short-term fee of $39.95 if an NTF fund is sold within 3 months of purchase.

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 2017 article.

Both brokerage houses have their own advantages, and will surely please a majority of customers. We recommend Fidelity Investments for a retirement account and to "buy-and-hold" investors. Merrill Lynch is a great brokerage service for Bank of America customers willing to hold $25,000 with basically no interest on qualifying accounts to receive free trades. For everyone else there are other firms to consider, that offer lower commissions, excellent trading tools and client services, such as Scottrade and TradeKing.

Updated on 1/12/2017.

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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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