2023: Merrill Edge corporate, municipal bonds, U.S. bills, notes trading. Can I buy bonds on Merrill Edge?

Can I Buy Bonds on Merrill Edge?

If you plan to trade bonds, you should check out the services that Merrill Edge offers. With good pricing and effective search tools, it is definitely competitive with other brokerage firms. Here’s how to trade government bonds with this brokerage firm:

Step 1: Learn Bond Basics First

Before jumping into the world of bond trading with real money, you really need to complete a minimum level of education. Merrill Edge has excellent learning materials for fixed-income securities. We found articles and videos on many topics, such as the relationship between bond prices and yields. There are self-guided courses from Morningstar that cover several important categories, such as zero-coupon bonds, a common offering from the U.S. Treasury department.

In addition to the educational materials, there are fixed-income news articles on the Merrill Edge site. We found Treasury bond yields (in table and graph format), articles from Dow Jones Newswires, and research reports in pdf format.

To locate Merrill’s bond education, click on the Research tab in the very top menu. Under Investment Research, select Fixed Income.

Step 2: Scan for Treasury Bonds

After you have completed your required education, it’s time to look for debt securities. You can find Merrill’s bond screener under Research > Screeners > Fixed Income Screener. Only secondary trading of Treasury bonds is possible at Merrill Edge. Primary issues can be traded over the phone only.

Once you have the screener open, you’ll need to select “Bond Type” under “Search By,” and not “Issuer.” Make sure you specify Treasury bonds. Once you have selected the correct settings, you’ll have access to bills, notes, STRIPS, and inflation-indexed bonds.

The screener has several search options. Perhaps the most important is maturity date. Each maturity, such as 20 years, shows a range of yields. We found 2.59% to 2.76% for this maturity.

After maturity, it’s possible to select a coupon rate, a market price, call status, coupon frequency, and whether the bond has any insurance.

Results of a scan can be sorted by a variety of information. We found coupon frequency, the next call date, call status, CUSIP number, offer price, yield to worst, and the type of bond. Hovering over a bond’s name generates a small pop-up window with more information, and clicking on the name creates a larger profile page with even more detailed information.

Can I Buy Bonds on Merrill Edge?

Step 3: Use Merrill Edge’s Bond Calculator

On the fixed-income research page, there’s a small section for ‘Tools & Calculators.’ It can be found under the ‘Overview’ tab near the bottom of the page. One of the tools is the bond income calculator. This can be very handy if you need to quickly estimate yield to maturity, yield to worst, yield to call, accrued interest, and total cost of trading a bond.

A second tool available in the same section is a taxable equivalent yield calculator. As the name suggests, it determines an investment’s tax-adjusted yield using your federal income tax rate, state income tax rate, and your state’s municipal bond tax policies.

Step 4: Submit an Order

When you have found the bond you want, it’s time to place a trade. The Merrill site offers a trade button on a bond’s profile page. There’s also an “Action” drop-down menu in search results where a trade link can be found.

Selecting either trade link produces the broker’s fixed-income ticket. The CUSIP number will automatically be populated. The ticket also has a “request a bid” feature in case you’re trying to sell but can’t find any attention from buyers. Merrill’s order form does not offer market or limit options, a slight disappointment.

Step 5: Consider Investing in Treasury Bond ETF’s and Mutual Funds

Merrill Edge offers several mutual funds and ETF’s that invest in U.S. Treasury securities. So if you ever decide that doing the research for individual bonds just isn’t your strong suit, you could switch to these funds instead.

Using Merrill’s screener, we found TFLO, the iShares Treasury Floating Rate Bond ETF. Over 99% of its holdings are in U.S. Treasury notes. Merrill charges $0 to buy or sell the fund.

Better Alternative

For bond investing, we recommend a broker called TD Ameritrade: learn about TD Ameritrade Bonds Investing.

Visit TD Ameritrade Website

Open TD Ameritrade Account

Merrill Edge Review

3.5-star brokerage firm rating

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