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Merrill Edge vs. TD Ameritrade

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When you compare Merrill Edge vs. TD Ameritrade you will find a close competition. An online brokerage like TD Ameritrade or Merrill Edge makes investing easier and less expensive than ever.

Merrill Edge and TD Ameritrade both offer little or no trading commissions. Plus, both offer free tools and research to help you make better investment decisions. Here's how these two brokers compare.

Trading costs and commissions

In the Merrill Edge vs. TD Ameritrade lineup, fees are comparable. Price isn't the differentiator it used to be. Most brokers, including these two, have scrapped commissions for online stock and ETF trades. Both brokers offer free trades. As you can see, trading stocks, options, and ETFs now cost the same for Merrill Edge vs. TD Ameritrade.

Broker Stocks and ETFs Options Mutual funds
Merrill Edge $0 per trade $0.65 per contract $19.95 (more than 1,400 for free)
TD Ameritrade $0 per trade $0.65 per contract $49.99 (more than 1,800 for free)

Commission-free funds

Most brokers now let investors buy and sell no-transaction-fee (NTF) mutual funds and ETFs. Some people may want to use a specific broker so they can invest in their favorite funds without paying a fee on each transaction. Looking at Merrill Edge vs. TD Ameritrade, both offer thousands of no-load, NTF mutual funds.

Account minimums

When we compare Merrill Edge vs. TD Ameritrade, we see that both are accessible to ordinary investors. Neither brokerage has a minimum balance requirement. These no-minimum brokers are both excellent choices for the beginner investor for precisely this reason -- you can start small.

There are certain minimums for some types of investment options. Most mutual funds have minimums -- ranging from $1,000 to $3,000 or more. What's more, you'll need to be able to buy at least one share of a stock or ETF to make an investment. But neither broker has a requirement on how much money you need to simply open an account.

Funding your brokerage account at Merrill Edge vs. TD Ameritrade is easy, no matter which one you choose.

At Merrill Edge, you can link your Bank of America account online and transfer money to your brokerage account. If you're funding your account from another bank, you'll need to submit a one-time form. Money transferred from a Bank of America account is available instantly. Funds from other checking accounts may take three days. You can free up your funds faster with a wire transfer.

To fund a TD Ameritrade account, you can link your checking account to then transfer money online. In some cases, funds will be available within five minutes. For other types of transfers, you may need to wait a day.

You can also link a savings account to either brokerage. But transfers from savings will count against your bank's monthly limit on withdrawals.


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International stocks and ADRs

Looking at Merrill Edge vs. TD Ameritrade, neither offers trading on any foreign stock market. But investors can buy American depositary receipts (ADRs). These are traded on U.S. markets and represent ownership of a foreign company in much the same way as direct stock ownership.

Note the important distinction between buying stocks on international stock markets and investing in foreign stocks through funds. You can buy U.S.-listed ETFs and mutual funds that hold foreign stocks through TD Ameritrade or Merrill Edge, just like any U.S. ETF or mutual fund.

In short, looking at Merrill Edge vs. TD Ameritrade, neither is a good choice if you want to trade stocks on the London Stock Exchange. But either is fine if you want to use funds or ADRs to own foreign stocks. For foreign stock trading, Fidelity may be a good choice. Charles Schwab is also a good option. Both let you place trades overseas through an online broker account.

Trading platforms

Let's look at Merrill Edge vs. TD Ameritrade trading platforms.

Those who trade often are likely to place more emphasis on a broker's trading platform than on small differences in commissions.

TD Ameritrade works well as a brokerage for traders and investors alike. Its robust mobile app has all the features typically found in browser or desktop platforms. That includes Level II quotes and conditional orders. Plus, the app is available on iOS, Android, and Windows, so it works on practically any device.

Active traders love TD Ameritrade's highly rated thinkorswim platform for its Level II quotes, complex options functionality, and hundreds of charting features. The big perk is that TD Ameritrade makes thinkorswim free to customers of any activity level or account balance. That's why TD Ameritrade is a top pick for investors who want a high-quality trading platform without limitations.

Merrill Edge doesn't offer all the bells or whistles that TD Ameritrade does. It has its own mobile apps and web-based trading platform. Its desktop platform, Merrill Edge MarketPro, doesn't offer as much functionality as thinkorswim. Sure, it offers a customizable dashboard and advanced charting. But it lacks many of the basic features, like one-click trading or complex options trading. Merrill Edge Market Pro is available only to customers who place at least 15 trades per quarter or have at least a $50,000 balance in eligible accounts.

When comparing Merrill Edge vs. TD Ameritrade, if the platform is what you care about most, then TD Ameritrade would almost certainly win you over. That said, those who place infrequent trades and invest for the long haul will find that just about any stock broker will fit their needs.

Research quality and trading tools

Where do Merrill Edge vs. TD Ameritrade stand when it comes to helping investors research their choices and trade with ease? Both TD Ameritrade and Merrill Edge offer stock and mutual fund screeners. These let you sort stocks and funds with quantitative parameters like fees and historical returns. When it comes to research, there are slight differences between these two brokers.

TD Ameritrade customers get a line-up of third-party research from CFRA, Credit Suisse, Market Edge, and Ford Equity Research. It also offers ETF ratings from CFRA and Morningstar, which is a big advantage for fund investors. TD Ameritrade offers more than 45 daily market and portfolio reports from a host of research groups.

Merrill Edge's ties to Bank of America/Merrill Lynch give it a leg up in the research department. BofA/Merrill Lynch covers more than 1,300 individual stocks, giving its clients unique access to in-depth research. The company's Stock Story feature gives you a quick high-level view of most publicly traded companies and how they make their money. You'll also find out what analysts are expecting of the company going forward.

Which is the better investment brokerage?

Merrill Edge vs. TD Ameritrade is a tough competition.

TD Ameritrade stands out as having a value proposition that favors traders and long-term investors alike, regardless of account size. TD Ameritrade offers thousands of mutual funds, more than 300 commission-free ETFs, and a platform fit for every type of investor. There's a reason why it's one of the largest discount brokers. For investors and traders who put particular emphasis on trading platforms, TD Ameritrade is easily a top choice.

On the other hand, Merrill Edge is certainly a high-quality brokerage. It could be especially attractive for current Bank of America customers. Neither broker has much of an edge on pricing, so it comes down to the features and convenience factors you care most about.

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