Merrill Edge vs. Fidelity
Key Points:
• Schwab, Merrill Edge, and Fidelity do a lot more than just open brokerage accounts.
• You can also open cash accounts and managed investment accounts at these companies.
• All three brokerages have good trading software and low fees.
Before you open a new brokerage account, it’s worth looking at Fidelity Investments, Charles Schwab, and Merrill Edge. These three companies offer a lot for a low price.
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 + satisfaction guarantee at Charles Schwab.
Fidelity: Currently, no promotions.
Merrill Edge: Get $0 stock commissions at Merrill Edge.
Tradable Products
All three firms let you trade these types of assets:
• Funds (closed-end, exchange-traded, and mutual)
• Stocks, including ADRs, REITs, and OTC stocks
• Option contracts
• Bonds and other fixed-income investments
Schwab also lets you trade forex and futures. Fidelity has cryptocurrency trading. Both Fidelity and Schwab let you buy stocks on foreign exchanges.
All three firms have portfolio management too. You can use robo-advisor accounts or get full-service management. All three companies have offices you can visit for help if you are an advisory client.
Winner: Tie between Fidelity and Schwab
Cash Management
Fidelity, Merrill Edge, and Schwab are not just brokerages. They also have helpful cash management features. Merrill Edge gives you free checkwriting and a debit card, but if you use the card at an ATM outside Bank of America’s network, you’ll pay fees.
Fidelity and Schwab both have debit cards that refund ATM fees worldwide. They also do not charge a currency-conversion fee for international transactions. Both let you add a checkbook.
At Fidelity and Merrill Edge, debit cards and checks are connected right to your brokerage account. Schwab uses Schwab Bank for these features, but both Fidelity and Merrill Edge have FDIC sweep programs.
Since Merrill Edge is part of Bank of America, it is easy to link and move money between your Merrill Edge and Bank of America accounts.
Winner: Very close overall
Mobile Apps
The Fidelity app lets you manage all your accounts (brokerage, managed, and cash). There is also a separate app for Youth accounts. The main app lets you see charts sideways, use indicators, and check company events. The order ticket supports trailing and stop orders and has separate options for mutual funds and options trading. There’s an Apple Watch app too.
Schwab also has an Apple Watch app. The main Schwab app has many features: market news, separate order tickets for different assets, and horizontal charting with tools. There is a more advanced app called thinkorswim, which can trade futures and forex and has more charting tools.
Merrill Edge has one mobile app. There isn’t an Apple Watch app, but you get personal finance tools, a free FICO score, and special discounts at Bank of America. For trading, the app has charts with indicators, a solid order ticket, option chains, and research from CFRA and Morningstar.
Winner: Schwab
Computer Software
On a laptop or desktop, you get more advanced platforms. Merrill Edge’s website lets you set alerts, make watchlists, and use important tabs on a stock’s profile:
Overview
Charts
News
Option Chain
Ratings & Reports
Earnings
Fundamentals
Technical Analysis
For more advanced option trading, go to the Research tab. If you want even more powerful trading, you can use MarketPro, a browser platform.
Schwab has a browser platform too, called thinkorswim. It offers:
• An advanced trade ticket with many order types
• Multi-leg trades
• Order rules
• Time & sales data
• Practice trading
The main Schwab website also has a lot of educational resources and extra trading tools.
Fidelity’s site also focuses on education. The order ticket has 8 order types, and charts can show up to 23 different styles. There is no browser platform, but the website still has advanced features like alerts and watchlists.
Winner: Schwab
Margin Services
All three brokers offer margin for approved securities, which can increase both gains and losses. Fidelity’s margin rates go from 12.575% to
10.825%, based on how much you borrow.
Schwab’s rates are in about the same range up to $250,000; after that, you can negotiate rates.
Merrill Edge uses a base lending rate (BLR) that changes every week. If you have over $100,000 at Bank of America, you get lower margin rates.
Winner: Tie between Fidelity and Schwab
Bonus Services
Individual Retirement Accounts: You can open IRAs at any of the three. Only Merrill Edge charges an IRA closing fee.
DRIP Service: Fidelity, Schwab, and Merrill Edge all offer automatic dividend reinvestment for stocks, ETFs, and mutual funds.
Extended Hours: All three offer extended hours. Schwab has almost 24-hour trading in futures and forex. Fidelity lets you trade crypto at any time. International stock exchanges are also open to Fidelity and Schwab customers.
IPO Access: Fidelity and Schwab customers can take part in IPOs.
Fractional Shares: Schwab lets you buy stocks in dollar amounts. Fidelity does this too, and also allows fractional ETF trades.
Fully-Paid Securities Lending: All three firms have this service.
Automatic Mutual Fund Purchases: You can set this up at all three.
Winner: Small edge for Schwab
Recommendations
Small Accounts: For robo portfolios, use Fidelity. For brokerage, use Schwab.
Beginners: You can open an advisory account at any of these brokers. A mix of robo and human advice is even better, and all three have this option.
Long-Term Investors and Retirement Planners: All three offer strong options for retirement planning.
Active Stock/ETF Trading: Fidelity is great for fractional shares. Both Fidelity and Schwab are strong choices for desktop trading.
Mutual Funds: Fidelity has over 9,000 funds. Schwab has more than 5,000, and Merrill has fewer than 3,000. Fidelity is best here.
Promotions
Charles Schwab: $0 commissions + satisfaction guarantee at Charles Schwab.
Fidelity: Currently, no promotions.
Merrill Edge: Get $0 stock commissions at Merrill Edge.
Merrill Edge vs Fidelity: Results
Even though Schwab comes out a little ahead overall, Fidelity is great for all-around financial planning, and Merrill Edge is a solid pick for option traders.
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