Is Merrill Edge really free?

Merrill Edge is in fact a zero-commission broker when it comes to buying and selling US stocks. Zero commission is especially useful if you trade relatively low volumes, like buying stocks for less than $500 per trade, because you won't be hit with any minimum fees the broker might charge.

We should note that the payment-for-order-flow model, which is used by some zero-commission brokers to generate income (rather than relying on commissions), could potentially create a conflict of interest between you and your broker. This could result in trade execution (like routing your orders to specific market makers) that might be unfavorable for you under certain market conditions, especially when using market orders (as opposed to limit orders, which seem to be less affected).

Keep in mind that at some brokers, you could incur non-trading charges like withdrawal or inactivity fees. If you want to trade options, bonds or futures, then a transaction fee may also apply. Also, if you trade on margin, the margin rate charged by brokers can differ wildly. In the next chapter, we'll find out what these charges are at Merrill Edge and how they compare with fees charged by its closest competitors.

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Merrill Edge fees
Overview of Merrill Edge fees and charges

It's safe to say that Merrill Edge's fees are low in general. They either don't charge a brokerage fee for things that other brokers do, or they only charge a small amount.

Here's a high-level overview of Merrill Edge's fees

Merrill Edge Fees snapshot
Assets Fee level Fee terms
US stock fee Low Commission-free stock and ETF trading
EURUSD fee - Not available
US mutual fund fees High $19.95 per transaction, there are also ~ free funds
Inactivity fee Low No inactivity fee

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Merrill Edge fees
Merrill Edge fees explained

Online brokerages in general charge much lower brokerage fees than traditional brokerages do - this is largely because online brokerages' businesses can be much better scaled: from a purely technical standpoint, it doesn't make that much of a difference for them if they have 100 or 5,000 clients.

This is not to say, however, that they don't charge any fees at all. They make money by charging you various rates for various actions or events. Usually you need to keep an eye on the following three types of fees:

  • Trading fees - these are brokerage fees that you pay when you actually carry out a trade, like buying an Apple share or an ETF. What you pay is either a commission, a spread or a financing rate. Some brokers apply all of these.
    • A commission is either fixed or based on the traded volume.
    • A spread is the difference between the buy price and the sell price.
    • A financing rate or overnight rate is charged when you hold your leveraged positions for more than one day.
  • Non-trading fees. These are usually related to some operations you carry out in your account, such as depositing money, withdrawing money, or not trading for an extended period.

We compare Merrill Edge fees with its closest competitors, Fidelity and Ally Invest.

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Merrill Edge fees
Merrill Edge trading fees

Merrill Edge's trading fees are low, which makes it suitable for you even if you trade often (i.e. several times a week).

Let's break down trading fees according to the different asset classes available at Merrill Edge.

Trading fees

Merrill Edge's trading fees are low.

Stock fees and ETF fees

Merrill Edge has low stock trading fees.

Stock fees of a $2,000 trade
Merrill Edge Fidelity Ally Invest
US stock $0.0 $0.0 $0.0
UK stock - $11.7 -
German stock - $22.8 -

Fund fees

Merrill Edge fund fees are high.

Fees of a $2,000 fund purchase
Merrill Edge Fidelity Ally Invest
Mutual fund $20.0 $37.5 $10.0
EU mutual fund - - -

Bond fees

Merrill Edge has low bond fees.

Fees of a $10,000 bond trade
Merrill Edge Fidelity Ally Invest
US Treasury bond $0.0 $0.0 $10.0
EU government bond - - -

Options fees

Merrill Edge's options fees are average.

Options fees for 10 contracts
Merrill Edge Fidelity Ally Invest
US stock options $6.5 $6.5 $5.0
US stock index options $6.5 $6.5 $5.0
UK stock index options - - -
German stock index options - - -

Margin rates

Merrill Edge margin rates are high.

Merrill Edge margin rates
Merrill Edge Fidelity Ally Invest
USD margin rate 8.6% 8.3% 7.8%
EUR margin rate - - -

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Merrill Edge fees
Merrill Edge non-trading fees

When it comes to non-trading fees, Merrill Edge is a rather cheap broker.

Non-trading fees include various brokerage fees and charges at Merrill Edge that are not related to buying or selling assets. This can be a withdrawal fee, deposit fee, inactivity fee or account fee.

A high-level overview of how Merrill Edge stacks up in terms of non-trading fees
Merrill Edge Fidelity Ally Invest
Withdrawal fee $0 $0 $0
Deposit fee $0 $0 $0
Inactivity fee No No No
Account fee No No No

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Merrill Edge fees
Merrill Edge deposit fee

Usually, brokers don't charge anything for deposits, and Merrill Edge is no different.

Merrill Edge deposit methods
Merrill Edge Fidelity Ally Invest
Bank transfer Yes Yes Yes
Credit/debit card No No No
Electronic wallets No Yes No
Deposit fee $0 $0 $0

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Merrill Edge fees
Merrill Edge withdrawal fee

Merrill Edge generally doesn't charge a withdrawal fee.

Merrill Edge withdrawal fees and options compared
Merrill Edge Fidelity Ally Invest
Bank transfer Yes Yes Yes
Credit/debit card No No No
Electronic wallets No Yes No
Withdrawal fee for bank transfer $0 $0 $0

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Merrill Edge fees
Merrill Edge inactivity fee

Merrill Edge does not apply an inactivity fee, which is great because your account won't be charged even if you do not trade for an extended period (like several months or years).

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Author of this article

Nicole Conrad

Author of this article

Nicole is an intern content contributor for Brokerchooser. She comes to Brokerchooser with experience and certification in Accounting, and she currently is pursuing graduate studies in Economic Policy. Nicole writes broker reviews to provide transparency for customers: highlighting brokers’ exceptional services and holding them accountable for questionable practices.

Nicole Conrad

Broker Analyst

Nicole is an intern content contributor for Brokerchooser. She comes to Brokerchooser with experience and certification in Accounting, and she currently is pursuing graduate studies in Economic Policy. Nicole writes broker reviews to provide transparency for customers: highlighting brokers’ exceptional services and holding them accountable for questionable practices.

Everything you find on BrokerChooser is based on reliable data and unbiased information. We combine our 10+ years finance experience with readers feedback. Read more about our methodology

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