Bank of America Discount Brokerage
Bank of America discount brokerage service is called Merrill Edge. It is the online self-directed investing arm of Merrill Lynch which since 2008 is owned by Bank of America. Merrill Edge offers a
wide array of financial and investment products for self-directed investing accounts: financial planning tools and calculators, access to market research, and online trading tools for
stocks, bonds, mutual funds, ETFs, and other asset classes. They also offer limited personal financial planning through their Merrill Edge Roadmap product and Merrill Edge Select Portfolios.
Please note that the following review and rates apply only to Merrill Edge self-directed investing accounts. These do not apply to any other Merrill Lynch,
Pierce, Fenner & Smith accounts.
Bank of America Brokerage Basics
- $6.95 online stock and ETF trades
- $6.95 + $0.75/contract options trades
- $19.95 mutual fund trades, but $0 for No Transaction Fee (NTF) funds
- Fixed income investments such as bonds priced at various rates
- No-fee IRA accounts
- Market Pro trading platform for active investors
- Wide array of research and educational tools and information
As with most brokerages, setting up a new account online is easy, involving filling out the proper application with the required personal data and then clicking submit. Once the account is approved, the weak part of Merrill Edge’s process is exposed.
Merrill Edge requires a paper form to be submitted that authorizes future transactions between bank and brokerage accounts. This results in a sizeable delay and may not be acceptable for someone wanting to make trades that day. Even then, Merrill Edge doesn’t disclose this procedure until after a new account is opened, which is needlessly deceptive and slow.
To contrast, most online brokers simply ask for a bank account and routing number, and then arrange for a direct transfer from the client’s bank to the new brokerage account. A new customer can often begin trading almost immediately.
After the Merrill Edge account is opened and funded, moving money in and out is easy. Merrill Edge lets customers obtain Visa debit cards and set up check writing privileges on to whatever cash balance amount is in their account. Selling securities to raise cash also works, but most brokers require a 3-day wait for cash proceeds from a trade to clear, or “settle,” in the account before that money is available for withdrawal.
Bank of America Website/Trading Platform/Tools Review
Intuitive and easy to use are the key advantages to the website. Attention is paid to various levels of investor sophistication and education, so beginners can easily find information about investing basics without wading through material better suited for experienced investors.
Experienced investors will find the usual array of trading screens for various asset classes, as well as various financial calculators for such topics as asset allocation, annuity tax savings, and taxable equivalent yields. Also available are tools for personal finance, college planning, and retirement planning.
Advanced Trading Platform
Their premium-level trading platform, Market Pro, is sophisticated and fully customizable. The minimum requirement to get access is either placing at least 15 trades per quarter or maintaining at least $50,000 in balances between Bank of America and Merrill Edge accounts.
Market Pro allows a trader to monitor portfolios and watch lists, analyze markets in real time, and conduct research through Bank of America Merrill Lynch Global Research. Also available is streaming, interactive charting with 36 technical analysis tools. More active or higher net-worth traders may access Level II quotes if they trade at least 30 times per quarter.
Customers who prefer to monitor their investments via Smartphone can download apps for most handheld devices: iPad, iPhone, Android, and Blackberry.
The Android app is rated at 4 stars at Google Play store but iPhone app got only 2 stars on iTunes. The apps allow the user access their portfolios,
news, alerts, and have the capability to make trades and asset transfers.
Bank of America Free Trades
The one thing that makes Bank of America brokerage account stand out from the competitors is an offering of 30 free stock or ETF trades per month
for customers who meet any one of the following criteria:
1. Total combined balances of $25,000+ in Bank of America deposit accounts: checking, savings, FDIC-insured CDs or FDIC-insured IRAs.
2. Total combined balances of $25,000+ in CASH balances in Merrill Edge account(s).
Essentially it means that to get free trades a client must keep $25,000 in cash uninvested or earning close to zero interest. So the real cost of
free trades to a client is the loss of interest or potential investment gain on $25,000.
Discover bank savings account pays 0.95% APY which means that a customer could
get at least $237 of no risk annual interest on $25,000 balance.
Bank of America Brokerage Pros
- Commissions are lower than most of the major online brokers except Scottrade and TradeKing
- Free stock and ETF trades if certain account balance minimums are met
- No account maintenance or inactivity fees
- No surcharges on penny stocks, large orders, or extended-hours trading
- Quality investment research sources such as Morningstar, S&P Capital IQ, and Thompson Reuters
- Free dividend reinvestment plans (DRIP)
- Banking services such as check writing, debit cards, and ATM cash advances
Bank of America Brokerage Cons
- High margin rates
- Short-term redemption fees for mutual funds are steep at $39.95 for funds held less than 90 days
- Reports of technical issues with website crashes, defective login cards (SafePass), trading tool problems, poor order execution
- Advanced trading platform not available to all clients
Tools and research resources at Bank of America Brokerage are competitive, but their website and trading platform aren't the best.
We will end Bank of America brokerage account review with recommendations.
Customers who are already Bank of America clients are natural candidates for Merrill Edge accounts, because they can eliminate commissions
altogether by combining accounts and meeting certain account balance minimums.
Active traders will need a broker and trading platform with better features and
lower commissions, but infrequent traders or those mainly concerned with retirement investing will find Merrill Edge to be a good
candidate for their business.
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Bank of America Brokerage
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