I moved some ETFs from E*Trade to Merrill Edge. I also opened a new Bank of America checking account. The combo deal gives me free trades on any ETF and a free-everything checking account with branch access and no ATM fee.
Bonus and Free Trades
Merrill Edge is the self-directed online investing service from Merrill Lynch, which is owned by Bank of America. Among major discount brokers, Merrill Edge is relatively new and not as well known. Fidelity, Schwab, TD Ameritrade, and E*Trade have been around longer. Since its parent Merrill Lynch has a much larger brokerage business and a longer history, I’m confident its trading and processing technology platforms are solid.
Like the other brokers, Merrill Edge offers a good bonus for bringing in new money. Right now there’s an offer for a $500 bonus if you open a new account and transfer in $100k in assets, or a $1,000 bonus for $200k. See details in Huge Bonus Offers From Brokers.
Because it’s self-directed, no Merrill Lynch broker will call you and sell you load funds. You place trades yourself, just as you do at other online discount brokers. The commissions are competitive. If you must pay, it’s $7 per equity or ETF trade, compared to $7 at Vanguard, $8 at Fidelity, $9 at Schwab, and $10 at TD Ameritrade and E*Trade.
However, if you have $50k or more invested, and you have a checking account with Bank of America, you get 30 free online equity and ETF trades per month. Instead of a fixed list of commission-free ETFs, every ETF is practically commission-free.
Wells Fargo’s WellsTrade used to have a similar deal (100 free trades per year). Now it’s limited to only grandfathered customers. Merrill Edge’s deal is still ongoing. In fact the number of free trades recently increased to 100 per month for accounts above $100k after 3 months under the new Bank of America Preferred Rewards program.
The $50k or $100k isn’t just the cash or money market balance at Bank of America. It includes the value of your investments at Merrill Edge. It’s quite easy to qualify. To get a similar deal at Vanguard you need $1 million, which gives you 25 free trades per year.
The free trades only extend to stocks and ETFs. Transaction-fee mutual funds still cost $20 per trade. It’s better to use Merrill Edge for ETFs.
The transfer from E*Trade to Merrill Edge went very smoothly. Merrill Edge has an online interface for requesting an incoming transfer. You fill out where you are transferring from, the account number, how the account is registered, and whether you want a full or partial transfer. You don’t have to print or mail any form or get a signature guarantee. It took just six business days for my ETFs to come over in-kind. Merrill Edge reimbursed the transfer-out fee charged by E*Trade.
A generous bonus plus free trades on any ETF make Merrill Edge a great place for holding ETFs.
No-Minimum Free Checking Account
I also opened a Bank of America checking account to qualify for the Preferred Rewards program.
The package deal with Merrill Edge waives the monthly maintenance fee with no minimum balance or direct deposit requirement. In addition, you get free check orders, free cashier’s checks, and free stop payments on top of the standard free online and mobile banking and free bill payments. The highest tier in Preferred Rewards with $100k at Merrill Edge after 3 months also gives you unlimited reimbursement of ATM fees charged by other banks.
Other than not paying much interest, this Bank of America checking account packs pretty much all one needs, with a large number of branches nationwide and the freedom to use any ATM anywhere in the country if you have $100k at Merrill Edge. For how I will use it, interest doesn’t really matter.
I opened the account completely online. I was able to set up online access and paperless statements very easily. The online interface is first rate. It supports 2-factor authentication by sending a code to your mobile phone.
I’m using this account as a local backup. Contrary to people reporting Bank of America as “bad” I don’t expect any problems.
Bonus On Credit Card Rewards
The third component in the Preferred Rewards program is extra rewards on Bank of America credit cards. At the highest tier with $100k at Merrill Edge, you can get a credit card that pays 2.625% rewards on everything and another card that pays 3.5% on groceries and wholesale clubs and 5.25% on gas. See
- Bank of America Travel Rewards Visa: Better Than Fidelity AmEx Or Citi Double Cash
- The Best Visa Card To Use At Costco Is Not The Costco Visa
[Update: After six months, Merrill Edge automatically paid the bonus as promised. I didn’t have to contact anyone to ask about it.]
[Photo credit: Flickr user Sean_Marshall]