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Vanguard vs. Merrill Edge: Which Should You Pick?

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Times are changing. Vanguard is no longer just a mutual fund manager, and Merrill Edge isn't an old-school stock brokerage anymore. When you're ready to invest and take the first step by opening a brokerage account, compare Merrill Edge vs. Vanguard. These two companies should be high on your list of potential suitors.

With millions of accounts between them, Vanguard and Merrill Edge have become go-to brokers for traders and long-term investors alike.

Merrill Edge vs. Vanguard: Commissions

It's become downright cheap to make a trade at most discount brokers. Vanguard and Merrill Edge are no exception. As you'll see from our full Vanguard review, both have eliminated commissions on stock, option, and ETF trades. You'll still pay a small fee per option contract. Read our Merrill Edge review to find out why you should opt for a fee-free brokerage. 

Merrill Edge vs. Vanguard commission costs

Broker Stocks and ETFs Stock options Mutual funds
Vanguard $0 per trade $0 plus $1.00 per contract $0 for Vanguard and no transaction fee mutuals funds, up to $20.00 for others
Merrill Edge $0 per trade $0.65 per contract $19.95

If your portfolio has more funds than individual stocks, fee-free trades will save you money. You can do this through a Vanguard ETF, a Vanguard mutual fund, a Merrill Edge ETF, or a Merrill Edge mutual fund. Brokers have more and more no transaction fee (NTF) mutual funds that don't charge a trading fee on every transaction. These two are no exception. Both Vanguard and Merrill Edge have also eliminated commissions for online stock trading. And all ETFs now trade commission-free on either trading platform. 

Merrill Edge vs. Vanguard total fund

Fund type Vanguard Merrill Edge
Total mutual funds More than 6,800 More than 9,000
No-transaction-fee mutual funds More than 3,300 More than 3,000

TIP

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Merrill Edge vs. Vanguard account minimum

We'll keep it simple here: neither Vanguard nor Merrill Edge have minimum account deposits. You read that right. You can open a Vanguard account or a Merrill Edge account with the change you find between your couch cushions.

Merrill Edge vs. Vanguard trading platform

If you're looking for a high-powered trading platform, Merrill Edge vs. Vanguard may not give you a clear winner. 

A Vanguard brokerage account isn't designed for frequent traders. It makes sense given Vanguard's roots as a broker for long-term investors who are most concerned about cost.

Vanguard uses a simple browser-based interface. Traders can easily buy stocks, options, ETFs, or funds. That said, Vanguard isn't the brokerage for you if you want complex stock option trades or level II quotes. Its mobile app is good enough to place the occasional buy or sell order. But it doesn't offer full platform functionality. The app is available on iOS, Android, Windows, and Kindle Fire.

Merrill Edge offers more functionality with its browser-based solution. You can get streaming quotes through its watch list feature. Merrill Edge MarketPro, its desktop platform, is a more powerful solution. You get full customization with this trading tool, as well as more charting options, and many ways to show multiple data points on one screen. You can quickly see a stock's P/E ratio, or analyst estimates, for example.

Merrill Edge vs. Vanguard: International stocks and ADRs

Before you ask Siri how to say "limit order" in Spanish, know that you can trade American depositary receipts (ADRs) at Vanguard and Merrill Edge. If you are a trader who wants direct access to a foreign stock market, Vanguard can get you there, but it charges a fee. Merrill Edge doesn't offer international market trading.

Most large foreign companies have an ADR that trades in the United States. Buying shares of international household name companies shouldn't be a problem, regardless of the brokerage you choose. But if you want to buy shares of a Japanese small-cap stock, you'll need a broker that can help you transact on a Japanese stock exchange.

Merrill Edge vs. Vanguard research quality and trading tools

Merrill Edge and Vanguard each offer their brokerage clients a high-quality trading tool and a wealth of research. Both provide a number of screening tools for individual stocks and funds. As far as third-party research goes, Vanguard customers get access to many excellent resources. They include Standard & Poor's, Thomson Reuters, and First Call, to name a few.

Merrill Edge customers get one very big perk in the form of Bank of America Merrill Lynch Global Research Analysts' stock picks. Merrill Edge also offers third-party research to its clients. The "story" Merrill Edge offers about many of the largest stocks on the market is a helpful function. It gives you a quick introduction to a given stock before you do your own due diligence.

When it comes to human professional help, Merrill Edge vs. Vanguard are more or less on an equal footing. In addition to sophisticated website trading guidance, you can access a financial advisor at either brokerage. Investment advice from a person does not come free. Fees depend on how much money you want help managing. The Vanguard Personal Advisor service fee is 0.30% of the managed assets. The Merrill Guided Investing service fee is between 0.45% and 0.85% of the managed assets. Minimum balances apply.

Vanguard vs. Merrill Edge: The bottom line

If you want to trade directly on international stock markets and have a preference for Vanguard's funds, Vanguard might just win your heart. It easily earns a top spot as one of the best online brokers for long-term investors who want to simply manage a portfolio of a few index funds and ETFs.

Of course, if low options costs or highly-rated apps and trading platforms are what you're seeking, then Merrill Edge may be a better fit.

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