Merrill Edge rating

Bank of America Brokerage Account Review (2021)


Bank of America Discount Brokerage


You no longer need to be a Bank of America customer to get $0 commissions at Merrill Edge, which is Bank of America's brokerage service. Moreover, the broker has eliminated account minimums to gain access to its desktop platform. Could Merrill Edge be better than your current broker? Let’s find out.


Bulls Talk About...


Good option tools. Including trading resources and educational materials.

Advanced desktop software. For the most sophisticated traders.

Low-cost managed accounts. Just in case you decide you need professional help.


Bears Talk About...


Limited selection of investment vehicles. Several asset classes are missing.

Small selection of mutual funds. Less than 4,000 in total.

Day trading is not emphasized. Multiple tools are missing.


Customer Support


BOA Brokerage Customer Rating

Bank of America brokerage customers get 24/7 phone support, which is quite a bit more than several other brokers are offering these days. But there is no chat function (guests who aren’t logged in do have a chat feature). The website does have several self-help tools, including a messaging tool with a document upload widget.

Merrill Edge has no branch locations for self-directed clients, although it does have licensed financial advisors (for a fee) at thousands of Bank of America locations.


Tradable Instruments


BofA Investments Rating

With a Bank of America trading account, you can buy and sell these assets:

- Fixed-income securities (including municipal debt, Treasuries, and CDs)
- Exchange-traded funds
- Closed-end funds
- Mutual funds
- Options
- Stocks (including penny stocks and OTC stocks)

Several investment vehicles are missing, including foreign stocks, cryptocurrencies, futures, and forex.


Fees and Commissions


BofA Brokerage Cost Rating

The cost of trading the assets Bank of America stock brokerage offers is pretty close to unbeatable: $0 for stock and ETF trades. Option trades have a $0 base charge with a 65¢ per-contract fee.

Trades of new issues of some fixed-income products have a markup/markdown priced in. Treasury bonds on the secondary market have no commission at all. However, orders for Treasuries at auction have to be placed over the phone, and that’s a $29.95 charge.

Secondary trades of other bonds, such as agency and corporate debt, are priced at $1 per bond, with a $250 maximum and $10 minimum.

Mutual funds that carry a transaction fee are $19.95 on both trade sides.

Taxable accounts at Merrill Edge have no fees of any kind and no balance requirements.


Portfolio Management


BofA Brokerage Portfolio Rating

Bank of America brokerage’s commission schedule looks pretty straightforward to us. But if it’s too complicated for you, you could sign up for the broker’s Guided Investing service. It costs 0.45% per year, and that’s it. There are no commissions of any kind (although there is a $5,000 minimum starting balance).

Although Merrill’s low-cost advisory account isn’t a robo account, it nevertheless doesn’t come with any type of personal financial advisor. If that’s something you want, you can upgrade to a different plan that costs 0.85% per year with a $20,000 minimum balance.

With either service, you’ll get a portfolio of ETFs and mutual funds. If you want other securities, you’ll need to go back to self-directed trading or head over to Merrill Lynch.


Website


BofA Investing Rating

Multiple account types can be managed through MerrillEdge.com. So if you want to open a variety of accounts, you could.

For self-directed accounts, Merrill’s site has some pretty good tools. A search field appears in the upper-right. Just enter a ticker symbol or company name and click on the entry you want in the drop-down menu. Doing so will produce a small window with trade data, a small graph, and buttons for alerts, research, trading, and a watchlist.

Merrill’s trade ticket only has two duration choices: GTC and day. But it does have trailing and stop orders, and all or none can be selected.

Charts do have several tools, including technical studies and comparisons. But there is no full-screen mode.


Bank of America Brokerage Account


MarketPro


BofA Trading Rating

If Merrill’s website doesn’t quite deliver the trading experience you seek, you can upgrade (at no cost) to the desktop platform. Called MarketPro, this software delivers quite a few advanced features. They include:

Market movers. For extra insight into the day’s action.

Full-screen charting. Tools include right-click trading, several graph styles, drawing tools, and technical studies.

Technical Insight™ from Recognia. Including short-term, intermediate, and long-term strategies.

Market depth. For more insight into interest in an asset.

Economic calendar. With details on earnings announcements, conference calls, buy backs, and more.

There are a few downsides of MarketPro. Merrill forgot to add streaming video news and direct-access routing. Plus, the order ticket is the same basic ticket the website has. And we don’t like the fact that you have to download a file every time you want to launch the program.


Bank of America Trading Platform


Mobile App


BofA Brokerage App Rating

If you can’t be at your desk for the website or desktop system, you can always use Merrill’s mobile app anywhere there’s a cell tower. The platform functions on Apple and Android devices (including tablets), and there’s even an auxiliary app for Apple Watch.

During our testing of the iPhone app, we found two watchlists, one that syncs with the website and another specifically for the app. Charts come with lots of tools, including trendlines, several display styles, and the ability to save a graph. Perhaps best of all, a graph can be rotated horizontally for better viewing.

The app’s trade ticket is the same one that appears on the website and MarketPro. In addition to stocks and ETFs, options and mutual funds can be traded on the app.


Bank of America Brokerage App


Options Trading


BofA Brokerage Options Rating

It’s somewhat surprising that Bank of America isn’t better known as the place to trade options because it has a lot of great derivative tools. Without even going to MarketPro, you’ll find an options screener. It’s on the website.

During our research, we were also very impressed with a strategy builder on the website. The tool can suggest several multi-leg trades based on just a few criteria, such as price and volatility predictions. Small and large profit-loss diagrams are part of the process, and these make the tool even better.

Then there are the option tools on the desktop system. They include chains for calls/puts and several spreads, like strangles and vertical call spreads. OptionsPlay is yet another platform derivative traders will like. It’s launched from MarketPro and has no additional cost.


Security Research


BofA Brokerage Security Rating

Besides its great option tools, Merrill Edge also provides a lot of educational materials. Of special interest to stock traders are free reports in pdf format from Bank of America (you have to go through MarketPro to find them). The website provides trade recommendations for many stocks courtesy of Morningstar and CFRA.

The mobile app provides basic trade data on an entered ticker symbol. Funds have ratings from Lipper and Morningstar, while stocks have earnings histories and CFRA reports.

Screeners for all the products Merrill offers will be found on the broker’s website. There are many search criteria, and it’s possible to place a trade straight from the results.


Bank of America Investing Account


Margin Borrowing


BofA Brokerage Margin Rating

Bank of America brokerage offers margin accounts just in case you want to trade with borrowed funds. Currently, loans below $25,000 cost 8.625% annually. Above that amount, the rate drops to 7.5%. Above $100,000, the rate is negotiable.

Security profiles at Merrill Edge on any of its platforms do not display margin details, such as initial and maintenance requirements, details on hard-to-borrow stocks, or borrowing costs for specific securities. The broker also does not have a short locate tool.


Bank of America Stock Trading


Other Services


BofA Brokerage Services Rating

IPO availability: Merrill Edge does not provide access to IPOs (but Merrill Lynch does).

Dividend Reinvestment Program: Bank of America brokerage customers can enroll in free dividend reinvesting. The broker has a very simple tool on its website to sign up.

Automatic Mutual Fund Investing: Besides dividends, you can also set up periodic purchases into mutual funds.

IRAs: Merrill Edge customers can open one of several IRA types. The one feature we don’t like is a $49.95 closeout fee.

Fractional-share Trading: Merrill hasn’t jumped on this bandwagon, at least not yet.

Extended Hours: At Bank of America brokerage, you can trade from 7:30 am, EST, until 8:00 pm.

Banking Tools: Free checks and a Visa debit card are available if you want them.


Recommendations


Active Stock and ETF Trading: With Merrill’s $0 commission schedule and very good desktop platform, it definitely gets our endorsement. Firstrade, however, has $0 commission on all products.

Individual Retirement Accounts: Why pay a fee to close an IRA when you could go to Fidelity and pay nothing?

Beginners: Merrill Edge does have decent learning materials, but TD Ameritrade has branch locations, live events, an online chat service, and more.

Long-Term Investors and Retirement Savers: Merrill Edge does offer target-date mutual funds and a self-employed 401(k). But TD Ameritrade has more funds and its 401(k) has no fees.

Small Accounts: For taxable accounts, we can defend Merrill Edge. It charges no fees and has no minimum balance requirement.

Mutual Fund Investors: With Merrill Edge’s very small offering of mutual funds, we have to recommend Ally Invest instead.


Bank of America Stock Trading Recap


Bank of America brokerage service has a few weaknesses. But active stock and option traders who don’t plan to day trade will find much to like here.


Open Merrill Edge Account



Open Merrill Edge Account