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Is Merrill Edge Account Cash FDIC/SIPC Insured? For How Much?
Is Merrill Edge FDIC protected? For how much brokerage, IRA investing accounts cash and funds have SIPC insurance coverage?
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Is Merrill Edge FDIC Insured and SIPC Protected?
Merrill Edge does not provide FDIC deposit insurance. However, the broker is owned by Bank of America,
and deposit accounts with the bank can easily be linked to a Merrill Edge trading account. Both
Merrill Edge and Bank of America accounts appear on the Merrill and Bank of America platforms.
Cash balances held in a Merrill Edge account rather than a Bank of America checking or savings
account will be protected by the SIPC, up to a quarter of a million dollars. Merrill's membership
in the SIPC provides a total insurance protection of $500,000 per account. Because linking accounts is simple to do, an easy way to maximize both insurance amounts is to hold cash deposits in a CD or savings account with Bank of America, while keeping securities in a Merrill Edge account.
Merrill Edge and Competitors
Merrill Edge IRA Review
Opening an IRA at Merrill Edge is quick and easy. The broker's on-line application will lead you step-by-step through a series of questions, and the retirement account will be opened in no time.
The cost of choosing Merrill Edge for an Individual Retirement Account is very reasonable. The broker charges no setup fee or annual fee. There are no inactivity fees, low-balance charges, or other maintenance costs. However, closing an IRA or transferring one to another broker costs $49.95.
There is no minimum deposit amount to open an IRA. Several varieties are available with the firm, including Traditional, Roth, Rollover, Inherited, SEP, and SIMPLE. The broker does not offer Custodial accounts, although a bank IRA can be opened through Merrill's relationship with Bank of America.
Merrill Edge IRA Cost of Trading
Both retirement and non-retirement accounts at Merrill Edge pay the same commissions for trades. The broker charges $0 for ETF and stock transactions. Using the firm's automated phone system rather than the Internet to submit an order costs nothing extra. Placing a trade with a living, breathing agent over the phone rather than the computer tacks on an extra $23.
Merrill Edge charges $19.95 for transactions of mutual funds that don't appear on its NTF list. The charge is applied to purchases, sales, and exchanges. A $10 surcharge is added if an order is placed with a live rep. The broker has over 800 mutual funds that carry no load and no transaction fee. There is a $39.95 short-term redemption fee on these funds if they are held for less than 90 days.
In total, there are more than 4,000 mutual funds available with the broker. Some of these are target-date funds, which are designed for retirement accounts. There are target-date funds from Fidelity and Vanguard, among other fund families. Some of them come with neither load nor transaction fee.
Exchange-traded funds are available, but unfortunately Merrill does not offer any that are commission free.
Merrill Edge IRA Fees Comparison
There are some other brokerage houses that don't charge anything to close an IRA. Vanguard and Schwab customers, for instance, pay nothing to close a retirement account. On the flip side,
WellsTrade charges $95 for closing an IRA, while Capital One Investing clients pay $75.
Merrill's seven IRA types are a smaller selection than the ten that E*Trade offers. Interactive Brokers does not offer a SIMPLE IRA, which Merrill Edge does provide.
Not having an annual IRA fee is a big plus at Merrill Edge. Ally Invest, by comparison, charges $50 every year for each IRA that doesn't place at least one trade or if
it has a balance below $2,500.
The mutual fund selection at Merrill Edge is rather small. USAA provides more than 15,000 funds, while Fidelity customers have access to 11,000 products.
Furthermore, Merrill's selection of no-load, no-transaction-fee funds is rather small as well. Robinhood has 0.
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