Merrill Edge vs. TD Ameritrade

When it comes to big box brokerages, Merrill Edge and TD Ameritrade are considerable giants, but the two take different approaches to investing.

While Merrill Edge mostly appeals to passive and casual investors who are new to stock investing, TD Ameritrade has amped up their platform to target active and savvy traders with an abundance of research and AI tools.

TD Ameritrade has reduced its commissions and fees to cater to the new generation of self-directed investors, but this isn’t enough to overcome Merrill Edge, who joined their competitors in 2019 and declared that they will no longer charge commissions. 🎯

Merrill Edge still offers some high-quality research tools and excellent customer support with over 2,500 Bank of America locations. Customers also like its stock research and discounts for high balances. However, we think it falls short of a larger, more updated brokerage like TD Ameritrade. We share our findings in this in-depth side-by-side look at Merrill Edge and TDA.

So which brokerage is right for you? Let’s take a look how to the two brokers compare to one another. 🧐

Fees

Commissions

$0

$0

Account minimum

$0

$0

Minimum initial deposit

$0

$0

General

Best for

Beginners

Experienced and beginners

Highlight

Award-winning research

Free and extensive research & data

Promotion

None

Up to $600 cash credit with qualifying deposit

Rating

9.0/10 Visit Merrill Edge on Merrill Edge's website

9.5/10 Visit TD Ameritrade on TD Ameritrade's website

Fees

Commissions

$0

$0

Account minimum

$0

$0

Minimum initial deposit

$0

$0

General

Best for

Beginners

Experienced and beginners

Highlight

Award-winning research

Free and extensive research & data

Promotion

None

Up to $600 cash credit with qualifying deposit

Rating

9.0/10 Visit Merrill Edge on Merrill Edge's website

9.5/10 Visit TD Ameritrade on TD Ameritrade's website

Both Merrill Edge and TD Ameritrade are historic brokerages, but one has definitely outshined the other recently with new research tools and AI assistance. Here are some highlights from our comparison and review:

Fees and Commissions 💰

These two brokerages are quite similar in their approach to fees and commissions. As of October 2019, both of these large brokerages have cut their commission fees for stocks, ETFs, and options.

TDA requires no minimum deposit to get started, but options traders will still pay a $0.65 per contract rate. Merrill Edge offers the same.

Broker-assisted trades for Merrill Edge have a higher cost than TDA. With Merrill Edge, investors pay $29.95 for brokers, while TDA charges $25.00.

In addition, mutual fund trade fees are much less with Merrill Edge, which charges $19.95 for all non-NTF funds. TDA charges anywhere from $49.99 to $74.95 in contrast.

Margin rates are also a bit lower with Merrill Edge, which reports a 9% margin rate for accounts over $24,000 to $49,999 in comparison to 9.75%, and the fees progressively get lower with Merrill Edge with higher account balances.

There are some significant account fees with Merrill Edge that are not charged by TDA. For example, investors are charged a $49.95 IRA closure fee with Merrill Edge. Returned ACh fees and stock certificate fees are also higher.

In fact, Merrill Edge charges the highest stock certificate processing fee at $500.

Investment Selection 📃

TD Ameritrade was designed for all investor types, which is why you’ll find futures and forex trading on this platform. In addition, TD Ameritrade offers over 300 ETFs and over 12,000 mutual funds. You can trade on any spread with TDA, including up to 8 legs.

Are you a forex trader? Investors can trade up to 75 currency pairs on TDA. You can also access more international exchanges, but it’s only through a live broker at this time.

Here is a complete breakdown of the investments offered by TDA:

•  ☑️ Stocks
•  ☑️ OTCBB/Pink sheets
•  ☑️ Options
•  ☑️ Futures
•  ☑️ Forex
•  ☑️ ETFs
•  ☑️ Mutual funds
•  ☑️ Bonds

Merrill Edge is not as robust as TDA when it comes to investments. You can trade up to 2 legs for options online. In addition, their list of mutual funds is relatively minimal with not even 4,000 available. However, you can search mutual funds by objective, rating, and some other characteristics. More equities are available, but only if you work with a live broker.

Here is the complete list of investments offered by Merrill Edge:

•  ☑️ Stocks
•  ☑️ OTCBB/Pink Sheets
•  ☑️ Options
•  ☑️ Bonds
•  ☑️ Mutual funds

Trade Experience and Security 🤝

We looked at several factors for trade experience and execution to see which of these brokers truly provides the best platform. In reality, it may depend on the type of investor you are. Bank of America customers and passive investors may get more out of Merrill Edge, but we think TD Ameritrade robust platforms and various tools will make it easier to select the right stocks and mitigate risk.

Trading with Merrill Edge 💵

Merrill Edge’s website is not exactly made for active traders. With that said, it’s still easy-to-use. MarketPro is the name for the online platform that includes powerful charts, streaming data, and mutual fund screener tools. If you have a higher balance of over $1,000,000, then you can access NASDAQ Level II quotes and another tool called Market Depth.

Trade orders are pretty simple, and you won’t be able to do more than a 2-leg option spread with their trade types. If you want more complex order types and more streaming data or ordering within charts, TD Ameritrade is going to be the better choice.

While Merrill Edge does not accept payment for order flow and routing, many venues still compete to execute on these orders. You are likely to always get your bid price for a trade through Merrill Edge. This is because Merrill Edge uses smart order routing and real-time pricing information to get the best price for its customers.

Trading with TD Ameritrade 💸

Most experienced traders have heard of TD Ameritrade’s platform thinkorswim. It is award-winning and includes almost every research, charting, and screener tool available. You can also access your portfolio, trading platform, and research tools on their website, but more active, experienced traders always default to thinkorswim.

However, TD Ameritrade has been working on their user experience and have added various customization options, including dock and dashboard tools. There are 13 customizable modules to add, including streaming watchlists, Twitter news, streaming news, videos, and real-time chart data. You can also rearrange and resize any of these models.

Everything is also accessible through the cloud, so whether you are on the web, desktop platform, or mobile, you can access synced portfolio holdings and watchlists. Trade tickets are also the same on all platforms, so you can enter simple and complex orders no matter where you go.

TDA has some of the best trade execution statistics in the brokerage industry. You can see their published trade execution rates and speeds online. The brokerage reports a 98.2% price improvement rate.

Security 🛡

The Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) both regulate Merrill Edge and TD Ameritrade. You will also receive SIPC investor protection, which protects investors from the loss of cash and assets if the broker goes bankrupt. The SIPC protection cap is $500,000, including $250,000 for cash.

Furthermore, TD Ameritrade is backed by a number of regulatory bodies, including the Commodity Futures Trading Commission (CFTC), the Hong Kong Securities and Futures Commission (SFC), and the Monetary Authority of Singapore (MAS).

Education, Research, and Robo-Advisors 👨‍🏫

Education and Research with TD Ameritrade 📗

TD Ameritrade has been buildings its educational center for many years, which is why it has so many 2-minute videos on everything related to trading and investment options.

Over the past year, the brokerage has spent considerable time updating and streamlining some of the problems with the site so that information is easier to find. The result is that the new website provides in-depth research options and various news feeds to always keep up to date.

The thinkorswim platform lets you look for new trading opportunities on the fly with real-time data for options and equities. While other tools are still only accessible on the TD Ameritrade website, such as bond screeners. You can filter all of the news feeds to show what relates to your portfolios and watchlists, selecting by sector only.

The charts are also very customizable on thinkorswim, allowing you to pick from hundreds of technical studies and utilize various technical analysis tools to conduct research.

Is TD Ameritrade’s Robo-Advisor Worth It? 🤔

While you do need to make a deposit of at least $5,000, this robo-advisor includes comprehensive tools for socially responsible investing, tax-loss harvesting, and automatic rebalancing. There is also a 0.30% per year account management fee.

Education and Research with Merrill Edge 📘

Merrill Edge was designed to be simple to use, and there have been some updates to the user experience to make tools and features simpler to find. MarketPro is the better platform to utilize if you are looking for more education and research tools. You can also set up the layout according to what you want to display first in the dashboard.

Fundamental research is what Merrill Edge does best. You can see that in the huge library of historic research and stock rankings available through Bank of America and Merrill Lynch, which all customers have access to. You can also search a database with 6 months of reporting on 1,500 equities.

The Merrill Edge Portfolio Story feature is a great way to investigate your portfolio and see if it stacks up against the market average. It gives you an inside look into how your assets could be allocated for better returns. There are also environmental, social, and governance ratings to check out with this option too.

Does Merrill Edge Have a Robo-Advisor? 🤖

Merrill Edge Guided Investing offers human portfolio management with a robo-advisor tool, but the fees are considerably higher than most. You will pay 0.45% per year for account management, and it requires a $5,000 minimum investment. You also have to pay a higher fee to get human advisors and financial planners to assess your account.

Mobile and New Trade Tech 📱

TD Ameritrade offers two mobile apps. The first is TD Ameritrade Mobile, which mirrors the desktop app capabilities. It’s simple to use and works with iOS, Android, and Apple Watch.

The TD Ameritrade Mobile Trader app is the robust, feature-rich, and active-trader-approved mobile platform. It syncs up with thinkorswim, so you can access your charts, watchlists, market scans, and other data right from your phone. You can also access the virtual trading simulator through this platform.

TD Ameritrade has also been adding new ways to place trades through Facebook Messenger, Twitter, Google Assistant, and Alexa.

In contrast, Merrill Edge does not have a true mobile trading app. You can add the Merrill Edge widget to your Bank of America app to see your holdings and access some tools, but you can only make trades online.

Customer Support Compared ☎

Merrill Edge offers better services for those who want in-person support and old school phone support. While you can reach a representative 24/7, their representatives are not as knowledgeable about the platform or MarketPro features as they should be.

It took us several minutes to get an answer. In addition, you have to schedule an appointment to talk an advisor or get expert help.

While TD Ameritrade claims to offer live chat support, we found that was only available through Facebook Messenger and Twitter.

There are no links to direct live chat on the TD Ameritrade website, though you can talk to a representative on Facebook during normal business hours. Phone support may be the best way to reach a representative and get answers if you can’t reach anyone on social media.

Verdict: Which Broker is Right for You? 🏁

Unless you are a Bank of America customer or you really like fundamental research, Merrill Edge is probably not the most investment-forward platform. TD Ameritrade offers more tools, better research, and way more investment options for most traders.

You also can’t beat the customization and mobile-readiness of the thinkorswim platform. To learn more please refer to our comprehensive guide to broker reviews.

Comparison Corner

Find out how TD Ameritrade and Merrill Edge stack up against other competition.

• TD Ameritrade vs. Robinhood
  TD Ameritrade vs. Fidelity
  TD Ameritrade vs. E*Trade
  TD Ameritrade vs. Ally Invest
  TD Ameritrade vs. TradeStation
  TD Ameritrade vs. Vanguard
  TD Ameritrade vs. Interactive Brokers
• Merrill Edge vs. Vanguard
  Merrill Edge vs. Fidelity
• 
  

About the author

Tim Fries

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Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.