Ally Invest versus Merrill Edge brokerage firms comparison: IRA, fees, commissions, stocks/funds offerings, differences, pros and cons. Which broker to choose?

Overview

Owned by banking giants Ally Financial and Bank of America, Ally Invest and Merrill Edge offer very low-cost pricing schedules but somehow manage to offer quite a bit in return. This article will put the two brokers head-to-head and try to determine which one is the top performer.

First Category: Pricing

Merrill Edge Review
Rating Ally Invest rating 3.5-star brokerage firm rating
Stocks, ETFs $0 $0
Options (per contract) $0.50 $0.65
Mutual Funds $9.95 $19.95
Initial Funding Requirement $0 $0
Inactivity Fee $0 $0
IRA Annual Fee $0 $0
IRA Termination Fee $25 $49.95
Outgoing Wire Fees (Domestic)$30$24.95
Full Account Transfer Out$50$49.95
Partial Account Transfer Out$10.00 per security, $50 maximum$0
Open an account Up to $3,500 cash bonus + $0 trades + transfer fee rebate. Get up to $600 when you open new Merrill Edge account with at least $20,000.


As you see from the table above, Ally Invest is better priced than Merrill Edge and it takes the first category.


Second Category: Available Securities

Merrill Edge customers can trade equities, exchange-traded funds, closed-end funds, mutual funds, option contracts, fixed-income securities, penny stocks, and over-the-counter stocks. To trade OTC stocks, customers must have at least $25,000 in assets.

Ally Invest has the same lineup of securities and adds forex to the mix. The broker also assesses surcharges on penny stock trades, something Merrill Edge doesn’t do. Ally does not have any account minimums to trade over-the-counter securities.

We’ll call the second category a draw.


Third Category: Learning Materials

Ally Invest’s website hosts an undersized section of videos and articles on investing topics such as how to construct a portfolio of exchange-traded funds. As for security profile pages, they too are rather brief. Equity reports can be downloaded from one analyst: CFRA.

At Merrill Edge, there is a greater amount of research and educational resources. Videos and articles look at many financial issues. These include the principles of asset allocation, an overview of education accounts, and the basics of mutual funds. The brokerage firm sends out a newsletter to customers every quarter.

Stock profiles at Merrill include more data points than we found on Ally’s site. For example, besides CFRA, Morningstar and S&P Global provide stock reports. Trefis® Price Analysis, which provides price estimates based on a company’s cash flow, is available at no cost.

Merrill Edge defeats its rival in the third category.


Fourth Category: Mutual Fund Details

With Merrill Edge’s mutual fund screener, we identified 3,151 securities that were available for new investments. We were disappointed to find that only 19 are no-load, no-transaction-fee funds. On the flip side, we found extensive fund profiles that included both Morningstar and Lipper ratings. Merrill is the only discount broker we know of to offer Lipper ratings free of charge.


Merrill Lynch or Ally


At Ally Invest, we found over 11,400 mutual funds open to new investors. That’s more than three times the number at Merrill. The downside is that Ally Invest doesn’t provide funds with both zero load and zero transaction fee. Every fund has either a load or a transaction fee.


Ally vs Merrill Edge


Ally’s large selection of funds gives it the victory here.


Fifth Category: Mobile Apps

The Ally Invest mobile platform can be used to trade funds (except mutual funds), options, and stocks. A second app can be used to trade forex. During our investigation of the main app, we saw several useful features, including bill pay, Zelle transfers, and mobile check deposit. Charting comes with multiple tools and a horizontal view option. Trailing and stop orders can be selected on the order ticket.


Ally vs Merrill Edge


On the Merrill Edge app, mutual funds can be traded in addition to stocks, options, and ETFs. There are also more trailing order types than Ally Invest offers on its app. Charting is on a similar level with a few tools and horizontal viewing. As with Ally, there is bill pay and check deposit. One highlight we really liked on Merrill’s platform is a free FICO score.


Merrill Edge vs Ally


Merrill Edge wins this one.


Sixth Category: Websites

Merrill Edge used to have a trade bar on its site; but for some reason, the broker has removed the tool. In its place is a simple site with no browser platform. The order ticket offers the same options as the mobile version. Charting offers tools (company events, technical indicators, and multiple chart styles) but no full-screen mode. Also missing are drawing tools.


Merrill Edge or Ally Invest


At Ally Invest, we found both a trade bar and a browser platform. The bar can place trades for equities and options. A small chart can be expanded from it as well. The platform delivers a lot of useful features, including full-screen charting with many drawing tools. The software further offers bond trading, option tools, and a trade ticket with several order types.


Ally vs Webull


Ally Invest is our pick here.


Seventh Category: Other Tools

Ally Invest offers its customers 2 desktop trading programs for forex: an Ally software program and MetaTrader 4. Securities traders who meet trading requirements and account minimums can gain access to Quotestream, another desktop system.

Merrill Edge offers a desktop platform called MarketPro. Like Quotestream, it also has trading minimums. Both software packages incorporate Level II quotes.

For mobile traders, Merrill offers an app for Apple Watch. Ally Invest does not.

Merrill Edge wins by a small margin.


Eighth Category: Other Services

If you prefer to roll cash dividends back into securities as additional shares, both brokerage houses have you covered. A free DRIP plan is easy to sign up for.

If you’re trying to build a nest egg, both companies also offer Individual Retirement Accounts. Merrill Edge does charge a $49.95 IRA closeout fee. Ally Invest charges $25. Merrill Edge customers can open a self-employed 401(k). Ally Invest doesn’t offer the account.

Ally Invest’s site permits regular deposits of funds into a trading account. There is no similar service for mutual funds. By comparison, Merrill Edge clients can set up recurring deposits into both funds and accounts.

Merrill Edge has a slight lead in the final category.


Promotions

Ally Invest: Up to $3,500 cash bonus + $0 trades + transfer fee rebate.

Merrill Edge: Get up to $600 when you open new Merrill Edge account with at least $20,000.



Our Recommendations

Long-Term Investors and Retirement Savers: We can recommend either broker. Ally Invest is better priced, though.

Beginners: Ally Invest’s learning materials don’t quite measure up to Merrill’s... but it has lower commissions.

Mutual Fund Traders: We propose Ally Invest over Merrill here due to Ally’s much lengthier list of funds.

Equity Trading: Merrill only offers $0 commissions to certain Bank of America customers; whereas Ally Invest has the same rate for all customers. We recommend Ally.


Ally Invest vs Merrill Edge: Results

The two brokers are evenly matched but Ally Invest offers better pricing on almost all products.




Webull


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