Introduction

If a bank account doesn’t give your cash enough room to grow, an investing account may offer a more productive experience. Vanguard and Merrill Edge both provide securities accounts in several formats, along with a range of services that can add value to those accounts.

Comparison Table

Available Products

Brokerage and investment-advisory accounts are offered at both companies. On the self-directed side, investors can trade stocks, options, funds (mutual, exchange-traded, and closed-end), and fixed-income securities. Merrill Edge has a larger OTC stock offering than Vanguard.

Vanguard has a robo service that uses a computer program to select Vanguard ETFs for an account. Merrill Edge uses professionals to manage portfolios, although its program nevertheless remains a budget service. Merrill’s costs 0.45% annually, while Vanguard charges 0.20% or 0.25% before applicable credits, depending on the portfolio option.

Both firms also have advisory programs that make it possible to consult with a human investment advisor, receive a financial plan, and generally get more help than a low-cost automated program can provide. Fees vary, based on the exact setup chosen.

A broad mix of taxable and tax-deferred account types can be opened at either firm in this comparison. This includes education accounts, 529 plans, retirement accounts, solo 401k plans, joint accounts, custodial accounts, and more.

Winner: Because Merrill Edge has branch locations for advisory customers, we give it the victory here

Bank Products

Merrill Edge customers can add debit cards and checks to their brokerage accounts. There are no recurring fees for these features, although using the debit card outside the U.S. can trigger extra charges. Because Merrill is owned by Bank of America, investment accounts are automatically connected to checking and savings accounts. Moving money between securities accounts and deposit accounts online is very simple.

Vanguard has cash-management options, including Cash Plus and Cash Deposit accounts.

Winner: Merrill Edge

Margin

A margin account is required for several investing strategies. Both broker-dealers in this comparison provide it. Vanguard’s stepped margin schedule begins at 12% and decreases to 8.75%. Merrill Edge has a tiered schedule that incorporates a customer’s total assets within the Bank of America family of companies. The potential margin schedule varies from 12.18% to 8.18%.

Winner: Pretty close

Websites

Both brokerage firms in this matchup have websites that can be used for investment research, charting, and placing orders. Advisory accounts can also be accessed and managed through the websites.

Merrill Edge’s site includes a set of advanced options tools. These helpful resources are located under the Research tab. There is an actual screener for options contracts, which is not very common in the brokerage industry. A strategy builder can also locate multi-leg trades based on a variety of inputs.





MarketPro is another major feature, and it is a sophisticated browser-based platform. It can be used to trade options, stocks, and ETFs. Charting is very strong, with full-screen display and many tools.

At Vanguard, there is no separate web-browser platform at all. Instead, everything is handled on the website, which is quite simple. Charts, for example, don’t expand across the full width of the screen, and we found fewer tools than what MarketPro provides.





Winner: Merrill Edge

Mobile Apps

Trading on a computer is no longer the only way to invest, and both securities brokers here understand that. Each has a mobile app. Merrill’s platform includes many of the same features we found on its strong website, minus MarketPro, of course. The trade ticket offers several order types, including:

Stop
Limit
Trailing ($ or %)





The Merrill app has separate tickets for mutual funds and options. Charting can be used in horizontal mode with a variety of tools, and options contracts can be charted as well.

For securities research, there is a good amount of information on stocks and funds. We found PDF reports from CFRA and Morningstar on many stocks.

On Vanguard’s app, we found trade recommendations on stocks from multiple analysts. But there are no stock reports. Charts are very simple. A graph cannot be displayed horizontally, and there are zero tools.





A recent update to the Vanguard app has added actual trading in stocks. However, there are only 4 order types. Perhaps the most disappointing aspect of the app is that it can only trade mutual funds from Vanguard. Mutual funds from other fund families can only be traded on the website.

Winner: Merrill Edge

Supplementary Services

Fully-Paid Stock Lending: Vanguard customers, but not Merrill Edge clients, can earn money by loaning out their fully-paid shares.

Individual Retirement Accounts: Both firms offer IRAs, and both firms charge IRA fees in certain situations.

Automatic Mutual Fund Investing: Available at both firms, although Vanguard limits its service to Vanguard funds only.

Fractional Shares: At Vanguard, investors can buy Vanguard ETFs using whole-dollar amounts.

IPO Access: Not available at either investment firm.

Extended-hours Trading: Vanguard customers can trade after the closing bell. Merrill Edge clients can trade in this evening session plus a pre-market period.





Dividend Reinvestment Plan: A DRIP can be turned on at either brokerage firm.

Winner: Draw

Recommendations

Beginners: We recommend an investment-advisory account at either firm. Both offer human advisors in different ways, and adding one to an account for more personalized help could be even better.

Mutual Fund Trading: Using Vanguard’s mutual fund screener, we found thousands of funds. At Merrill Edge, we also received thousands of results from its fund screener. Merrill Edge’s screener, however, is easier to use.

Small Accounts: Vanguard requires just $100 to enroll in its Digital Advisor program. Merrill Guided Investing requires $1,000 for growth-focused strategies and $50,000 for income-focused strategies. Merrill Guided Investing with Advisor requires $20,000 for growth-focused strategies and $50,000 for income-focused strategies. Neither firm has any minimums or recurring fees for taxable self-directed accounts.

Long-Term Investors & Retirement Savers: An advisory account with a one-on-one working relationship with a human financial advisor at either firm can work well. Because Merrill has offices inside some Bank of America locations, we lean toward it.

Stock and ETF Trading: Definitely Merrill Edge with MarketPro.

Merrill Edge vs Vanguard: Which is Better?

Both firms have advantages and drawbacks. Advanced stock and options traders should definitely stay with Merrill Edge. Active investors and traders, as well as people who are new to investing, should also take a look at our Top 10 Stock Brokers.

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