Merrill Edge IRA Fees
- IRA set-up fee: $0
- Annual IRA fee: $0
- IRA termination fee: $75
- Inactivity fee: $0
Merrill Edge IRA Trading Commissions
- Stocks and ETFs: $0
- Stocks and ETFs broker assisted: $29.95
- Options: $0.65 per contract
- Mutual funds: $19.95
- Merrill Edge self-directed mutual funds: 0.75% gross proceeds, $50 minimum, $250 maximum
- Bonds: on a net yield basis
- Investment products: stocks, mutual funds, options, ETFs, bonds, CDs
- Merrill Edge minimum deposit to open account: $0
Individual Retirement Accounts at Bank of America and Merrill Edge Overview
Bank of America and its subsidiary Merrill Edge both provide IRAs. At Merrill, a retirement account can be used to trade stocks, bonds, mutual funds, and other securities. Meanwhile, Bank of America's banking division offers IRAs with CDs or savings accounts. Let’s explore the retirement options at these two financial institutions and see how they compare.
IRAs at Bank of America
One benefit of opening an Individual Retirement Account at a bank is FDIC insurance, assuming the bank is a member, as most U.S. banks are. Deposits at Bank of America are protected up to $250,000 per customer, with strategies available to increase this amount. Both regular deposit accounts and IRAs contribute to the total insurance limit.
Beyond FDIC protection, having an IRA at a bank offers other advantages over a broker. IRA assets at a bank are placed in savings accounts, CDs, money market accounts, or other fixed-income investments, whose values do not fluctuate like securities.
Bank of America offers CDs and money market deposit accounts within an IRA. The money market account currently pays 0.03%. IRA CD yields range from 0.03% to 0.15%, depending on the term, balance, and CD type. The bank offers several types of CDs, including standard term, featured, risk-free, and variable rate CDs. The featured CD, with a 1-year term, currently pays 0.07% and requires a $2,000 minimum deposit. A standard term CD of 4 years or more earns 0.15% with a $1,000 minimum deposit.
A variable rate CD, as the name implies, has an interest rate that changes over time. The current APY is 0.03%. This CD can be opened with $100, and additional deposits are allowed at any time. The penalty-free CD allows access to its value at any time without a penalty and currently pays 0.04% with a $2,000 minimum deposit.
While these rates are low compared to what might be earned in a brokerage account, the safety of bank products still attracts retirement savers. Bank of America's rates are lower than some competitors. For example, a savings account IRA at Ally Bank earns 1.00%, significantly higher than Bank of America’s top rate. Ally’s 60-month CD offers an APY of 1.7% with a $5,000 deposit. Synchrony Bank’s 2-year IRA CD has a 1.45% annual yield with a $2,000 deposit, and its money market account, with a $250 minimum, pays 0.85%.
Bank IRAs can be opened in either Roth or Traditional formats. The Roth IRA is designed for those expecting a higher tax bracket in retirement, while the Traditional IRA is for those anticipating a lower tax bracket. Bank of America also offers a Rollover IRA for customers with old employer plans like a 403(b) or 401(k). Citibank offers a similar Rollover IRA.
Bank of America provides a retirement help desk for any questions about their retirement products or assistance with opening or transferring an account. They can be reached at 1-855-450-8724.
Building an IRA at Merrill Edge
As mentioned, bank IRA rates are low, leading some investors to seek higher returns at a brokerage house. However, brokers are not FDIC insured, though most have SIPC protection. The SIPC, funded by member brokerage firms, insures securities accounts up to $500,000, including $250,000 for cash deposits.
Merrill Edge is a member of the SIPC. In addition to offering double the insurance of a bank account, Merrill also provides trading in assets with higher return potential, such as stocks, ETFs, and mutual funds. The broker also offers various bonds.
Merrill Edge offers several IRA types, including Roth, Traditional, SEP, SIMPLE, and Rollover IRAs.
A Merrill Edge IRA does not have ongoing fees—no maintenance, inactivity, or annual fees. Establishing an IRA is free, though closing a retirement account incurs a $49.95 fee.
A Merrill Edge IRA follows the same commission schedule as non-retirement accounts. Online stock and ETF transactions are $0. Phone trades are also $0, but using a live representative costs $29.95. By default, accounts receive electronic statements, with paper statements available for $5 each.
Merrill Edge’s website offers many tools and educational resources for retirement savers, including videos and webinars on important IRA topics, such as strategies to avoid outliving a nest egg and creating a retirement account for young people.
Merrill's IRA calculators are useful in various areas, like analyzing the benefits of converting an employer’s plan to an IRA and calculating required minimum distributions from a Traditional IRA.
In addition to great retirement resources, Merrill Edge offers a wide range of mutual funds. The broker’s screener lists 3,963 products, with 2,246 having no load or transaction fee. Some of these are target-date funds designed for retirement savers.
Comparison
Merrill Edge’s website provides far more educational content than Bank of America’s, likely due to the higher risks and complexity associated with securities compared to fixed-income bank products. Individuals interested in learning more about IRAs and retirement savings might prefer a Merrill IRA for the educational resources available.
It is possible to open an IRA at both institutions. The IRS allows this, but the maximum annual contribution remains $5,500 across both accounts ($6,500 for those 50 and older). You could have a low-risk IRA invested in bank deposits and a higher-risk account in stocks and mutual funds. Both accounts would be automatically linked by both companies, allowing you to view them after logging into either the Merrill Edge or Bank of America website.
Bank of America IRA Fees Review Summary
While Bank of America’s rates are lower than those of securities, a bank CD offers safety that appeals to those nearing or in retirement. Investors willing to take more risks or seeking more retirement education may benefit from a Merrill Edge IRA.
Find a Financial Advisor
If you are looking for a professional money management service in your area, you can
find a Financial Advisor on the Wiser Advisor.
Try Wiser Advisor
Updated on 8/21/2024.
|