TD Ameritrade vs. Merrill Edge

When it  comes to investing for retirement, it can be confusing for people who don’t know the process. That’s why companies like TD Ameritrade and Merrill Edge are so popular – they do the hard work while people reap the benefits.

Both Merrill Edge and TD Ameritrade don’t have minimum deposit requirements on their accounts, but some brokers do have “minimum limits” that unlock certain perks and benefits, so it’s a plus to keep a larger amount of money in the account. People trying to choose between TD Ameritrade and Merrill Edge have a few basic things they should know to help them decide between the two companies.

More to Know About TD Ameritrade

TD Ameritrade first came on the scene in 1971, and today is an online trading company that offers a lot of different trading options, like mutual funds, stocks, ETFs, options, and more. Today, Ameritrade has 6.6 million accounts that have over $667 billion in funds invested. The company became famous in the 1980s for being the very first company to allow trading by touch tone phone.

More to Know About Merrill Edge

Merrill Edge was launched in June of 2010, and is a part of Merrill Lynch. Edge is dedicated to “mid range” investors who have between $100,000 and $250,000 in investments. In 2015, Edge had over 2 million customers and managed more than $118 billion in assets. That works out to about $59,000 for every customer. It’s intended for “well educated” customers who are comfortable making their own trades

Advantages of TD Ameritrade Over Merrill Edge

  • Overall, TD Ameritrade has few fees and zero surcharge on a penny stock trade. Large orders with many shares or after hours stock trading also doesn’t incur any additional fee.
  • If people want a large and popular company that has a lot of physical locations, TD Ameritrade may be the way to go
  • Maybe the biggest plus for Ameritrade is the fact they have the top selection of independent, third party market research tools, from 13 of the biggest firms like Standard & Poor’s, TheStreet, Morningstar, and Jaywalk

A big advantage of TD Ameritrade is the fact that they offer no load NTF funds and commission free ETFs. That means people can easily build a fairly diverse portfolio without paying a lot of extra fees. Building a portfolio with fee free funds can actually help a customer save thousands of dollars on fees over time.

One downside to Merrill Edge is that while they don’t charge extra for penny stock trading, a person’s portfolios can’t have only penny stocks, and penny stock trading is fairly restricted. Merrill Edge also doesn’t have no-commission exchange-traded funds.

Ameritrade is geared towards people that can make their own decisions, and has two main trading platforms for their customers: the Ameritrade Thinkorswim service and the Trade Architect service. One great advantage of Ameritrade is the fact that users can actually practice making trades with money that’s not real by using PaperMoney virtual trading. This gives people the chance to learn how to make stock trades without the risk. TD Ameritrade offers access to myTRADE online trader community where people can talk with other investors to learn even more.

Like Merrill Edge, TD Ameritrade has zero account maintenance or inactivity fees, meaning it’s a good option for people who are just starting out. Free streaming quotes are given to all Ameritrade investors, including Level Two. Over 100 ETFs are allowed for each Ameritrade account with no commissions.

People interested in investing in mutual funds will find a lot of them here, with over 12,000 different ones available. There are also 4,000 plus no transaction fee funds  and a dividend reinvestment plan.

TD Ameritrade Customer Contact

  • Call 800-669-3900 to contact a TD Ameritrade Customer Representative or write to TD Ameritrade 200 South 108th Avenue Omaha, Nebraska 68154

Advantages of Merrill Edge Over TD Ameritrade

  • Has been called he the “best for lowest-cost penny stock trades” because they offer trades for a flat commission with no extra fees for penny stocks
  • Became widely known among young people for their “Face Retirement” tool that took a person’s picture and used age progression software to make it look older (with the idea to convince young people to save for retirement because younger people save more when they think about their older self)
  • Merrill Edge offers a free dividend reinvestment option, but the client will need to call customer support and set that option up

One of the biggest areas Merrill Edge is better than TD Ameritrade is in the area of price per every stock trade made. Stock trading with TD Ameritrade costs $9.99 per trade, while Merrill Edge charges $6.95 per trade. It’s only $3 per trade, but that certainly adds up over time. Both TD Ameritrade and Merrill Edge have a “flat” charge for trading stocks, meaning it costs the same whether someone trades 1 share or 1,000 shares.

Merrill Edge does offer free traders if a person’s account meets certain requirements, and they do have fairly decent banking services on their own (even a free checking account). The lack of a surcharge on penny stocks is a big plus, and extended hours trading is great for people who want to be able to manage their account beyond normal business hours. There’s no account maintenance or inactivity fees  associated with Merrill Edge, and an account includes investment research tools like Morningstar, Bank of America Merrill Lynch, Thomson Reuters, Recognia, and S&P Capital IQ.

Merill Edge Customer Contact:

  • Call 1 800 MERRILL (1 800 637 7455) or write to 601 Lexington Ave., New York, NY 10022

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