Merrill Lynch vs TD Ameritrade

TD Ameritrade vs Merrill Edge (2021)


Bank of America Merrill Lynch or TD Ameritrade - which is better in 2021? Compare IRA/Roth accounts, online investing fees, stock broker mutual fund rates, and differences.



Overview of TD Ameritrade and Merrill Edge


Which brokerage firm can deliver the financial services you have to have, TD Ameritrade or Merrill Edge? While Merrill Edge has excellent option tools, TD Ameritrade provides futures and forex trading.

That’s a very brief overview. A more thorough analysis will be found in the following comparison:


Cost Comparison


Broker Fees Stock/ETF
Commission
Mutual Fund
Commission
Options
Commission
Maintenance
Fee
Annual IRA
Fee
TD Ameritrade $0 $49.99 $0.65 per contract $0 $0
Merrill Edge $0 $19.99 $0.65 per contract $0 $0


Services


Broker Review Cost Investment Products Trading Tools Customer Service Research Overall Rating
TD Ameritrade
Merrill Edge


Promotions


TD Ameritrade: $0 commissions + transfer fee reimbursement.

Merrill Edge: none right now.



Merrill Edge Pros and Cons


With a securities account at Merrill Edge, you’ll get a lot of great trading resources. These include:

- Excellent desktop platform
- Helpful cash management tools
- Free FICO score

Despite its strengths, Merrill Edge does have these weaknesses:

- No direct-access routing
- Small assortment of mutual funds
- No streaming financial news


TD Ameritrade Pros and Cons


Despite the many similarities between these two firms, TD Ameritrade is quite different than Merrill Edge in several ways. TD Ameritrade customers, for instance, get these highlights:

- Large selection of mutual funds
- Direct-access routing
- Free video streaming of two financial news outlets

TD Ameritrade only has a few weaknesses:

- Steep learning curve on its desktop software
- Full account transfer costs $75


1st Category: Available Assets


If you want to trade futures or forex, TD Ameritrade is your only option in this contest. The broker-dealer also provides trading in:

- Bonds and other fixed-income securities
- Stocks (including penny and OTC instruments)
- Funds (these include ETFs, closed-end, and mutual)
- Option contracts

Merrill Edge has the same lineup, minus currencies and futures.

Winner: TD Ameritrade


2nd Category: Education


Before you place your first trade, you may want to go through some self-guided education. Both companies in this competition offer lots of learning materials that cover many topics.

For example, on the TD Ameritrade website we found these online courses:

- Income Investing
- Stocks Fundamental Analysis
- Options for Volatility

Besides self-guided courses, TD Ameritrade also offers videos, articles, webcasts, and in-person events (assuming that there’s not a major worldwide epidemic). To access all of these materials and much more, just click on the Education tab at the top of the TDA website.

If you would rather just kick back and watch TV, there’s live streaming of business news, courtesy of CNBC. You can access this resource through the mobile app or desktop platform. And then there’s TD Ameritrade Network, the broker’s own video streaming service. It streams during market hours.

On Merrill Edge’s site, the relevant tab is Guidance & Retirement. During our investigation, we found calculators, online courses, webinars, videos, and articles on many topics. Here are a few samples:

- Introduction to government bonds
- I'm a single parent. How can I get ahead financially?
- Growth vs. value investing: Two approaches to stock investing

Materials on Merrill’s site can be sorted by experience level, which helps to narrow down the resources.

Besides the general educational articles, Merrill Edge also delivers documents in pdf format from Bank of America Global Research.

Winner: TD Ameritrade


3rd Category: Website Trading


After you’ve completed your educational journey, it’s time to put some money on the line and see how you do. A good place to start trading is a user-friendly website, and both firms really succeed in this category.

Merrill Edge’s website is designed to be as simple as possible. A search field in the upper-right portion makes looking for investments extremely easy. Typing in a ticker symbol or company name quickly produces a small chart and a trade button.


Merrill Lynch vs Ameritrade


The broker’s order ticket has four trailing orders and two stop orders. That’s the extent of this company’s advanced orders, however.

Charting on the Merrill site offers multiple tools (in the form of indicators, graph styles, and comparisons). But there’s no full-screen mode, which is a major weakness.

TD Ameritrade’s site is just as user-friendly, but it manages to provide a more powerful trading experience. For example, the TD Ameritrade site has a trade bar, a very useful feature not found anywhere on the Merrill Edge site.


TD Ameritrade or Merrill Edge


Called SnapTicket, this trading widget is located at the bottom of every page on the site. SnapTicket can submit orders for stocks, ETFs, closed-end funds, and option contracts. It’s convenient because it’s always there.

TD Ameritrade’s regular website ticket offers several advanced order types that aren’t available on the Merrill Edge site. These include conditional orders and bracket orders. The site also has full-screen charting, another advantage in this category over its competitor.

Winner: TD Ameritrade


4th Category: Desktop Software


The most advanced trading experience will be found with desktop software. You’ll get just that at both TD Ameritrade and Merrill Edge.


Bank of America vs Ameritrade


MarketPro is Merrill’s desktop program. It does come with many tools and features. Despite its amazing sophistication, the software’s order ticket only has 8 order types, 4 of which are trailing orders. And there are only 2 duration choices. But charting is very advanced with many drawing tools, 13 display choices, and over 100 technical studies.

thinkorswim is TD Ameritrade’s desktop program. It has a more advanced order ticket than MarketPro, boasting over 15 order types. And the platform has nearly 400 technical studies. thinkorswim also has live streaming video news and a demo login, neither of which appear on MarketPro.


TD Ameritrade versus Bank of America


Winner: TD Ameritrade


5th Category: Mobile Apps


And then of course are the mobile apps. Both brokers have them, and in fact, they both also have apps for Apple Watch. TD Ameritrade also offers iMessage.


Ameritrade or Merrill Lynch


On the brokers’ iPhone platforms, we found many good resources, including mobile check deposit. Merrill, but not TD Ameritrade, offers bill pay. TD Ameritrade, but not Merrill, provides Level II quotes.

And then there’s the thinkorswim app. Modeled after its desktop cousin, this platform provides a professional-level mobile trading experience with very advanced charting tools and a complex (but user-friendly) order ticket. But it can’t submit orders for mutual funds, which Merrill’s app can do.


Merrill Lynch or Ameritrade


Winner: TD Ameritrade


6th Category: Margin Borrowing


Both Merrill Edge and TD Ameritrade offer margin accounts. However, neither broker provides margin details on specific stocks or funds on its platforms. This is somewhat of an inconvenience, as leverage and hard-to-borrow rates can vary by security.

Here is TD Ameritrade’s margin schedule:

Debit Balance Margin Interest Rates
above $499,999 call 800-655-4777
$250,000 - $499,999 7.50%
$100,000 - $249,999 7.75%
$50,000 - $99,999 8.00%
$25,000 - $49,999 9.00%
$10,000 - $24,999 9.25%
under $10,000 9.50%


And Merrill Edge’s rates:

Debit Balance Margin Interest Rates
$100,000+ call 855.332.5920
$25,000 - $99,999 7.500%
under $25,000 8.625%


TD Ameritrade customers who have at least $125,000 in account equity can sign up for a service called portfolio margin. It provides more leverage than a standard margin account. Merrill Edge does not offer this service.

Winner: Draw


7th Category: Options Trading


If you plan on trading option contracts, both brokerage firms in this matchup offer good resources on both their websites and desktop programs.

On the Merrill Edge website, we found an option screener and a strategy builder with 38 derivative trades. Each spread has a tile with a small profit-loss diagram. Selecting one of these produces a trade ticket with a larger profit-loss diagram where legs can be manipulated by strike price, expiration date, and number of contracts.

And then there’s the desktop program. It has integrated spreads and OptionsPlay, a user-friendly options platform that would be good for beginners.

On TD Ameritrade’s website, we found 7 spreads plus a custom order form where users can create their own trades (with a maximum of 4 legs). Like Merrill, TD Ameritrade has an options screener. And then there’s thinkorswim, which has its own scanner and 6 spreads.

Winner: Merrill Edge


8th Category: Other Services


IRAs: While both broker-dealers have IRAs, only TD Ameritrade has a Minor IRA. Plus, it doesn’t charge an IRA closeout fee, which Merrill Edge does charge.

Dividend reinvestment program: DRIP service is available at both firms. Even better, they both offer online tools to easily enroll.

Automatic mutual fund investing: On tap at both brokerage houses.

Fractional-share trading: Not yet available at either firm for stock and ETF traders.

IPO availability: Merrill Edge does not provide access to Initial Public Offerings. But TD Ameritrade does (for large accounts or active traders).

Extended hours: It’s possible to buy and sell securities before the opening bell and after the closing bell at either broker in this survey. TD Ameritrade customers get 25 more minutes than Merrill Edge traders.

Winner: TD Ameritrade


Now, Our Recommendations


Mutual funds: TD Ameritrade offers over 10,000 mutual funds. Merrill Edge, by contrast, has just 3,000. Easy pick.

Stock/ETF trading: Slight advantage to TD Ameritrade for providing more stock and ETF reports.

Beginners: For its branch locations and educational resources, we recommend TD Ameritrade.

Small accounts: Either broker will do for non-retirement accounts. TD Ameritrade doesn’t have an IRA closeout fee, so we have to suggest it for small IRAs.

Retirement savers and long-term investors: Unlike Merrill Edge, TD Ameritrade doesn’t charge any 401k fees. Plus, it offers annuities, which Merrill Edge doesn’t have.


Promotions


TD Ameritrade: $0 commissions + transfer fee reimbursement.

Merrill Edge: none right now.



Merrill Edge vs TD Ameritrade: Which is Better?


Merrill Edge really is a great brokerage firm. But when compared to the colossus TD Ameritrade, it just doesn’t appear to measure up. Nevertheless, for options trading, it is the outperformer in this survey.