Merrill Edge vs. Fidelity
Key Points:
• Schwab, Merrill Edge, and Fidelity provide much more than brokerage accounts alone.
• Cash-management features and managed investment accounts are also available.
• Advanced trading platforms or tools and low fees can be found at all three brokerage firms.
Before opening your next brokerage account, you should definitely consider Fidelity Investments, Charles Schwab, and Merrill Edge. These three companies deliver a lot of value at low cost.
Cost
| Broker Fees |
Stock/ETF
Commission |
Mutual Fund
Commission |
Options
Commission |
Maintenance
Fee |
Annual IRA
Fee |
|
Charles Schwab
|
$0
|
$49.95 ($0 to sell)
|
$0.65 per contract
|
$0
|
$0
|
|
Fidelity
|
$0
|
$49.95
|
$0.65 per contract
|
$0
|
$0
|
|
Merrill Edge
|
$0
|
$19.99
|
$0.65 per contract
|
$0
|
$0
|
Services
Promotions
Charles Schwab: $0 commissions + ACAT rebate + satisfaction guarantee at Charles Schwab.
Fidelity: Currently, no promotions.
Merrill Edge: Currently, no promotions.
Tradable Products
All three investment firms offer trading in these asset classes:
• Funds (closed-end, exchange-traded, and mutual)
• Equities, including ADRs, REITs, and many OTC stocks
• Option contracts
• Bonds and other fixed-income securities
Schwab also offers trading in forex and futures. Fidelity has direct cryptocurrency trading, and Schwab has announced a phased rollout of direct bitcoin and ethereum trading. Both Fidelity and Schwab offer access to foreign stock exchanges.
Portfolio management is also available at all three companies. They provide automated accounts as well as full-service management. All three have branch or investor-center resources for in-person assistance that advisory clients may appreciate.
Winner: Draw between Fidelity and Schwab
Cash Management
Fidelity, Merrill Edge, and Schwab aren’t just brokerage firms. They also offer useful cash-management features. Merrill Edge provides free checkwriting and a debit card, although using the debit card at an out-of-network ATM can lead to withdrawal fees.
Fidelity and Schwab both offer debit cards that reimburse eligible ATM fees. Schwab does not charge a foreign transaction fee on its debit card. Fidelity’s debit card may have a 1% foreign transaction fee on foreign transactions, although eligible ATM fees can be reimbursed.
At Fidelity and Merrill Edge, debit cards and checks link directly to brokerage-style cash accounts. Schwab, on the other hand, uses Schwab Bank for Investor Checking, and Schwab also has bank-sweep features for eligible brokerage cash. FDIC-sweep programs are also available at Fidelity and Merrill Edge.
Because Merrill Edge is part of Bank of America, Merrill and Bank of America accounts can be linked for fast transfers.
Winner: Pretty close overall
Mobile Apps
The Fidelity app links all account types, including brokerage, managed, and cash accounts. There’s also a separate app for Youth accounts, and Fidelity Trader+ adds an active-trading experience to Fidelity’s lineup. The main app supports charting, company events, and more. Its order ticket includes trailing and stop orders, plus separate tickets for mutual funds and options. An Apple Watch app rounds things out.
Schwab likewise has an Apple Watch app. The main Schwab app provides numerous features, including market news, separate order tickets by asset class, and horizontal charting with tools. A more advanced app named thinkorswim can trade futures and forex and includes extensive charting features.
Merrill Edge has only one mobile app. There’s no Apple Watch version, but it does have personal-finance resources like a free FICO score and special Bank of America discounts. For trading, it offers charts with indicators, a decent order ticket, option chains, and research tools from CFRA and Morningstar.
Winner: Schwab
Computer Software
On a laptop or desktop, we get more powerful platforms. Merrill Edge’s website shows alerts, watchlists, and key tabs on a stock’s profile:
Overview
Charts
News
Option Chain
Ratings & Reports
Earnings
Fundamentals
Technical Analysis
For advanced options trading, look under the Research tab. If you need an even higher level of trading, MarketPro, a browser platform, is available.
Schwab has a browser platform as well, named thinkorswim. It delivers:
• An advanced trade ticket with multiple order types
• Multi-leg trading
• Order rules
• Time & sales data
• Practice trading
The main Schwab website also has extensive educational resources and additional trading tools.
Fidelity’s site emphasizes education, too. The order ticket supports multiple order types, and charts have many display choices and tools. Fidelity also has Active Trader Pro, plus the newer Fidelity Trader+ platform for active traders across web, desktop, and mobile.
Winner: Schwab
Margin Services
All three broker-dealers offer margin for eligible securities, which can boost both profits and
losses. Fidelity charges from 11.825% to
10.075%, depending on how much is borrowed.
Schwab’s schedule ranges in roughly the same bracket up to $250,000; after that, negotiable rates
may apply.
Merrill Edge relies on a base lending rate (BLR) that changes weekly. Larger deposits
within Merrill and Bank of America can result in lower margin rates.
Winner: Draw between Fidelity and Schwab
Bonus Services
Individual Retirement Accounts: You can open IRAs with any of the three. Merrill Edge is the only one that charges an IRA closing fee.
DRIP Service: Fidelity, Schwab, and Merrill Edge all provide automatic dividend reinvesting.
Extended Hours: Available at all three. Schwab offers 24/5 trading in all S&P 500, Nasdaq 100, and Dow 30 stocks, plus more than 600 ETFs, on thinkorswim. Fidelity customers can also trade crypto around the clock through Fidelity Crypto. International stock exchanges also open up more possibilities at Fidelity and Schwab.
IPO Access: Fidelity and Schwab customers can get in on IPOs.
Fractional Shares: Schwab provides stock trading in whole-dollar amounts for stocks and ETFs trading in the U.S. exchanges; Fidelity does the same for a much larger stock and ETF lineup. Merrill Edge does not offer regular self-directed fractional-share purchases, although DRIP can create fractional shares.
Fully-Paid Securities Lending: Fidelity and Schwab both publish fully-paid securities lending programs.
Automatic Mutual Fund Purchases: Also available at all three.
Winner: Small advantage to Schwab
Recommendations
Small Accounts: For robo portfolios, Fidelity. For brokerage accounts, Fidelity has the strongest fractional-share lineup.
Beginners: Open an advisory account at any of these brokers. A hybrid robo-human account is even better, and all three have such programs.
Long-Term Investors and Retirement Planners: Each one offers strong resources for building retirement wealth.
Active Stock/ETF Trading: Fidelity is excellent for fractional shares. Fidelity and Schwab both do very well with advanced trading platforms.
Mutual Funds: Schwab and Fidelity both have strong mutual fund lineups and fund tools. Schwab advertises 4,000+ no-load, no-transaction-fee mutual funds.
Promotions
Charles Schwab: $0 commissions + ACAT rebate + satisfaction guarantee at Charles Schwab.
Fidelity: Currently, no promotions.
Merrill Edge: Currently, no promotions.
Results
Although Schwab finishes slightly ahead overall, Fidelity is excellent for broad financial planning and fractional-share investing, while Merrill Edge is a good choice for Bank of America customers.
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