Merrill-Edge Drops Free Trades

Bad news on the investing front: one of the best deals going is coming to an end. Merrill-Edge is ending its 30 free per month transaction deal that was previously qualified by maintaining a deposit balance of $25,000 in Bank of America and Merrill-Lynch accounts. For many of our clients, the imposition of a $6.95 per trade fee will outweigh their returns on their small, learning accounts that we recommend.

Given that change, what other options exist? This chart lays out many of the options and our experience with Fidelity, Schwab, and Vanguard supports recommending to our clients that they contact one of those firms. For our purposes, we will be moving our corporate accounts to Vanguard as their in-house ETFs and funds meet our needs and fit with our philosophy. The fact that we can continue to trade for free in their products clinches the deal. That said, if we want something outside their offerings, their $7.00 per trade fee is a bit more and we’ll likely open additional accounts at either Fidelity or Schwab given their $4.95 per trade fee.  We like how Vanguard just seems honest and open with no $0.95 nonsense in their pricing.

We don’t have any experience with some of the other firms that offer free trades or trades assessed at very low per share rates. For small trades, of course, the small volume of shares will frequently produce transaction fees less than the flat rate $4.95 of Fidelity or Schwab. However, since we don’t advocate day trading as a strategy, given the low frequency of trades and the reputations of the two firms, we are comfortable with our recommendation.