Merrill Edge IRA Review

If you’re a Bank of America customer, it may be hard to find a reason not to open your IRA at Merrill Edge. Overall, the Merrill Edge IRA is absolutely fine, with investment offerings to suit retirement investors, top-tier educational resources and tools, and fees more or less in line with what you’ll see at other brokers.

But if you’re a Bank of America customer, you’ll get the added perk of enjoying instant money transfers between your accounts. And once you hit $20,000 across all of your BofA and Merrill accounts, including your Merrill Edge IRA, you’ll qualify for lower car-loan interest rates, higher credit card rewards, fewer bank account fees, and other goodies, thanks to the BofA Preferred Rewards program.

The two biggest downsides at Merrill are that it doesn’t offer fractional shares, and its robo advisor management fee is on the higher side.

Merrill Edge IRA pros & cons

Retirement account types

Merrill Edge checks almost all the boxes on IRA types, offering traditional, Roth, rollover, inherited, spousal, SEP and SIMPLE IRAs.

There’s one omission: Merrill doesn’t offer custodial IRAs. Any parents raising enterprising young people (even children under 18 must have earned income to contribute to an IRA) must look elsewhere. Vanguard, Charles Schwab and Fidelity are among the brokers that offer them.

Opening an account: Opening a Merrill IRA is a smooth enough process. As with any broker, you’ll be asked about your current job and so on. Merrill gets a little extra with the disclosures and documents you need to (pretend to) read — there are lots of them — and, for me at least, the website was janky at times, not letting me see some of those docs. But even if I couldn’t see a doc, clicking its link resulted in the requisite checkbox turning green, and I was good to go.

Mobile app: The Merrill app works great once you’re all set up. I did find it a bit persnickety when trying to link an external account. The website was easier for doing that.

Bank of America Preferred Rewards: One of the biggest reasons to consider opening an IRA at Merrill Edge is if you’re already a Bank of America customer. Your IRA balance will count toward your BofA Preferred Rewards eligibility, which means you could enjoy a slew of discounts and other fun perks, including lower interest rates on auto loans and home equity lines of credit, better credit card rewards, fewer bank account fees, and a lower management fee on your Merrill robo advisor account (aka Guided Investing.) The rewards start when your combined account balances reach $20,000.

Merrill Edge IRA fees

Fees are one of the biggest tools that individual investors like you and me can wield as we attempt to make our retirement-savings journey as smooth as possible, and I’m happy to report that Merrill Edge is in line with other major brokers in keeping fees low. That said, the fees aren’t nothing.

Along with a $39.95 fee for selling a mutual fund less than 90 days after buying it (a common fee among all brokers), Merrill levies the following fees.

IRA closure fee: While there’s no IRA annual fee, and no transfer-your-investments-out fee, Merrill charges $49.95 to close your IRA. That type of fee is not uncommon. Charles Schwab has a $50 full-transfer-out fee (when you move all of your investments to a different broker). Robinhood charges $100 for partial or full transfers, and SoFi takes the cake with a $100 fee for full or partial transfers plus a $20 account closure fee. Fidelity stands out here, charging a big fat $0.

Trading fees: Merrill charges $0 for stock and ETF trades, but there’s a $19.95 transaction fee on some mutual funds. This isn’t as steep as others — Schwab’s is $74.95 on some mutual funds, and Fidelity’s is $49.95. Still, if you’ve got a mutual fund you really want to buy, or a fund family that strikes your fancy, then take a moment to consider whether this particular broker is right for you. I’m a Vanguard groupie, so for me, finding a broker that lets me buy and sell Vanguard funds for free is essential.

Broker-assisted fee: Calling a broker to make your trades is going to cost you, just about anywhere. At Merrill, the fee is $29.95. Schwab charges $25. Even low-fee Fidelity charges $32.95 to call a broker. Robinhood and SoFi don’t even offer this service.

Self-directed investment options

If you’re a general buy-and-hold retirement investor, you should have no trouble finding investments to suit your portfolio needs at Merrill. The one major drawback is that Merrill doesn’t offer fractional shares.

Fractional shares: These are no-go at Merrill, which is too bad. If you’re not swimming in cash, being able to buy a fraction of a share of companies’ stocks makes it possible to inch toward greater diversification. (Of course, another path to a diversified portfolio is through mutual funds and ETFs.) If you’re eager to buy fractional shares, consider Interactive Brokers (fractional shares on more than 10,500 products), Fidelity (more than 7,000 stocks and ETFs), Schwab (all S&P 500 stocks), or Vanguard (its own ETFs).

Crypto trading: Like many brokers, Merrill doesn’t offer direct access to cryptocurrencies, but you can trade spot bitcoin ETFs at Merrill if that’s your jam.

» If trading crypto is your thing, check out our guide to the best crypto trading platforms on StockBrokers.com (a Reink Media Group website, as is investor.com).

Managed investment options

Merrill offers both a standard robo advisor (i.e. automated investment management service) and a robo service that includes access to a financial advisor. Somewhat confusingly, these services have the same name — Merrill Guided Investing. They’re differentiated by “online” vs. “online with an advisor.”

Merrill Guided Investing Online: Merrill’s robo advisor stands out for its low upfront minimum of $1,000. The minimum for Schwab’s robo is $5,000, and it’s $3,000 over at Vanguard. But Fidelity’s robo minimum is $10, and SoFi’s is $1.

A caveat: Merrill’s $1,000 minimum is for investors who want “growth-focused strategies” — read: younger investors saving for retirement. There’s a $50,000 minimum for investors seeking “income-focused strategies,” i.e., people in or near retirement.

The robo advisor offers two main portfolio types: one that tracks the broad market and one focused on sustainability, which is a nice offering. Merrill says investment expenses (not to be confused with management fees) run about 0.05% to 0.07% for the market portfolio and 0.10% to 0.17% for the sustainability portfolio. These are deliciously low costs. Bravo, Merrill.

Buut… did someone say management fees? This is where Merrill Guided Investing Online stands out in a not-great way: The management fee is 0.45%. That’s higher than many of Merrill’s competitors. Vanguard charges 0.15% to 0.2%. Fidelity offers a free robo advisor on accounts up to $25,000 and the fee is just 0.35% on higher dollar balances.

Merrill offers a couple of bonuses right now: up to six months free on Guided Investing Online (get the offer code on this Merrill page); and get up to $600 when you open a Guided Investing account. However, that’s only if you’re investing $200,000. For lower balances, the payout will range from $100 to $250.

Bonuses are great. But remember, if you plan to invest for the long haul — that’s, after all, what an IRA is for — then fees are really important. If you want to invest through a robo advisor, be sure to compare brokers’ management fees.

Merrill Guided Investing — with an advisor: Merrill’s “with advisor” robo service requires a $20,000 minimum for “growth-focused” investors and a $50,000 minimum for “income-focused” investors.

The fee for Guided Investing with an advisor is 0.85%. You get access to one-on-one advice from a dedicated financial advisor. This fee isn’t astronomical, but if you’re open to getting advice from a group of advisors rather than a single person dedicated to you, then you could save a lot of money by going to Schwab, Vanguard or SoFi.

Retirement planning tools

While I find the Merrill website and app a bit hit or miss — I got hung up a few times with the spinning wheel of death — overall, there’s a ton of great tools and resources available.

Retirement calculator: I really like the Merrill Edge calculator. One awesome thing: Right up front it lets you add your spouse to the calculations. An amazing number of otherwise excellent calculators neglect to do this.

The calculator also includes an optional savings worksheet, where you can enter your total savings to date in taxable and retirement accounts, plus ongoing monthly savings.

At the end of an easy four-step process, you get your results on a page that offers useful details without being overwhelming. Plus, the Merrill retirement calculator offers results for both “poor” and “average” market conditions. You can even download a three-page PDF report, which is appealing, especially if Merrill tells you you’re on track. Frame that thing and hang it on the wall! Look, Ma, I may retire one day!

I do wish the calculator would give us more control to adjust assumptions. For example, my husband and I will have rental income in retirement (fingers crossed). It’d be nice to be able to input that; many other calculators let you add “retirement income,” but the Merrill calculator doesn’t. Instead, I had to reduce my “needed retirement income” by that amount. And you can only reduce your “needed retirement income” down to 60% of current income — no lower — which to my mind is finicky.

MyFinancialPicture: You can link all of your financial accounts to your Merrill account to see your net worth, set budgets and more.

Education and quizzes: Maybe you’re wondering what the heck a mutual fund is, and what “net asset value” means. Merrill has a helpful investor education section (it’s also easy to use on the mobile app). You can take courses on a variety of investing topics, complete with quizzes to test yourself. (Alternatively, check out our short explainer on what a mutual fund is.)

Doing an IRA rollover with Merrill Edge

Got an old 401(k) or other retirement plan sitting somewhere? Let’s start with the good news: Merrill Edge presents the details on what all of your options are — leave the money where it is, move to a new employer plan, roll it over to your Merrill account, etc. — in an easy-to-read format, with a list of pros and cons for each option.

While the Merrill rollover language is clear, it’s only clear up to a point, whereat the message switches to: “Call us to continue.” Now, it may be that calling Merrill will lead to a wonderful rollover experience. But Merrill could be clearer about why calling is essential — why can’t I continue online? A phone call may be the perfect option for many people, but I like a DIY option, too.

Bottom line

Merrill Edge is an absolutely fine broker. You could definitely do a lot worse (don’t get me started), and if you’re a Bank of America customer, you might not be able to do any better. A couple of “be aware ofs:” If you want to invest in mutual funds, there’s a $19.95 transaction fee on some funds (including one of my faves, the storied Vanguard Total Stock Market Index Fund). And if you want fractional shares, you’ll have to look elsewhere.

FAQs

What is the 2024 IRA contribution limit for Merrill Edge IRA?

The 2024 IRA contribution limit is $7,000 if you’re under age 50, and $8,000 for those 50 and older. The limit is set by the IRS and applies to the total annual amount of new money an investor is allowed to contribute to an IRA at any broker. If you invest in both a traditional and a Roth IRA in the same year, the total of your combined contributions still may not exceed that $7,000/$8,000 limit. (IRA rollovers aren't subject to these contribution limits.) See “What is an IRA?” for more on IRA contribution and withdrawal rules for 2024.

How do I withdraw money from my Merrill Edge IRA?

Merrill Edge offers a few different ways to withdraw money from (and deposit money into) your IRA:

• Make cash transfers between your IRA and any bank accounts you link to it. If you have a Bank of America account, transfers are essentially instantaneous. If your bank is a different company, your deposit may take up to four business days to drop.
• Do a wire transfer. The money should arrive the same day or the next day. You’ll have to pay a $24.95 fee for this need for speed.
• Use mobile check deposit to deposit money into your account. It can take two to eight days for the check to clear. (Granted, this question is about depositing into your account rather than withdrawing from it. This is me trying to encourage retirement savings, rather than withdrawals.)

Can you convert a traditional IRA to a Roth IRA at Merrill Edge?

Yes, you can convert a traditional IRA to a Roth IRA at Merrill Edge. To be clear, you can both:

• Convert a traditional IRA at a different broker to a Merrill Edge Roth IRA.
• Convert a Merrill Edge traditional IRA to a Merrill Edge Roth IRA.

When you convert from a traditional IRA to a Roth IRA, no matter the broker, you’ll owe taxes on any pre-tax traditional IRA deductions that you’ve made over the years, plus taxes on any investment earnings or interest.

If your traditional IRA that you want to convert holds only non-deductible contributions, i.e. you never got a tax break on the contributions you made to that IRA and you also own other IRAs that contain deductible contributions, don’t forget the pro-rata rule. That rule requires you to pay taxes on some portion of your rollover. In other words, you can’t roll over only your after-tax contributions if you have pre-tax contributions in other IRAs. Read this IRS page for more on the pro rata rule.

Do Merrill Edge IRA accounts count toward Bank of America Preferred Rewards?

Yes, your Merrill Edge IRA accounts count toward Bank of America’s Preferred Rewards program. In fact, if you have a Bank of America account already, that’s one of the best reasons to choose Merrill Edge for your IRA.

Methodology

Our mission at investor.com is to provide Americans with in-depth, unbiased reviews of financial products and services, based on our personal, hands-on testing and data collection. Our ratings are based on this research and on our in-house experts’ deep authority in the field. Brokers and other financial service providers cannot pay for preferential treatment. See more about why readers can trust our analyses.

Our research team conducts thorough testing on a wide range of features, products, services, and tools for U.S. investors. We personally test all available trading platforms and tools for each broker and evaluate them based on multiple variables. All research, writing and data collection at investor.com is done by humans, for humans. Read our generative AI policy here.

For this review of individual retirement accounts, we thoroughly examined all retirement-related accounts and services available to U.S. customers at the broker in question and looked for features important to long-term savers, such as types of accounts available, fees and planning tools. Each broker’s IRA offerings are given a rating on a five-star scale based on this data collection and individual evaluation. Accuracy is of the utmost importance to investor.com, and our data is checked on a rolling basis year-round.

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