Merrill Edge vs. Robinhood: Which Broker Is Right for You?

If you're looking for a new brokerage account to buy and sell stocks and other investments, there is no shortage of choices available to you. Two of the most popular brokerages right now are Merrill Edge, which is Bank of America's brokerage arm, and Robinhood, which pioneered zero-commission investing and a user-friendly approach to buying stocks.

While both of these are solid choices for many people, neither one is a great fit for everyone. There are some big differences between the two, and in this Merrill Edge vs. Robinhood comparison, we'll take a closer look at these, as well as the similarities, to help you determine which (if either) is the best option for you.

Like most brokers, both Merrill Edge and Robinhood offer zero-commission stock trading, and no monthly maintenance fees. But that's where the similarities end on fee structures.

Robinhood has a big advantage for options traders, as it is one of the only brokers where investors can buy and sell options commission-free. Merrill Edge charges a per-contract fee of $0.65, which is in line with most of its peers. Plus, Robinhood offers commission-free cryptocurrency trading, while Merrill Edge doesn't offer cryptocurrencies at all.

On the other hand, Merrill Edge has a standard $19.95 commission for mutual fund investments and offers thousands of funds on a no-transaction-fee (NTF) basis, while Robinhood doesn't support mutual fund investments at all.

LEARN MORE: Best Options Trading Platforms

It's also worth noting the difference in account transfer fees, as there may come a time when you want to move your account to another broker. Merrill Edge charges a $49.95 fee for a full account transfer, while Robinhood is a bit higher at $100.

Merrill Edge and Robinhood both offer stocks, ETF, and options on their respective platforms, but that's where the similarities end.

For one thing, Robinhood offers the ability to buy fractional shares of stock, which can be a big perk for newer investors who may not have enough available cash to buy a full share of some of their favorite companies. Robinhood also offers the ability to buy and sell several different cryptocurrencies, and most bank-affiliated brokers like Merrill Edge do not.

On the other hand, Merrill Edge is the only one of the two that offers mutual funds and bonds through its platform. And because Merrill Edge is part of Bank of America, investors can buy CDs if they want a stable income investment.

It's also worth pointing out that neither platform offers futures or foreign currency (forex) trading, so if these are part of your investing strategy, you'll need to look elsewhere.

Robinhood offers more account types than it used to. You can open a taxable brokerage account, a Roth IRA, or a traditional IRA. Robinhood Gold members can apply for the Robinhood credit card to open a credit account. Robinhood's IRAs are unique in that Robinhood offers customers 1% match on deposits. So when you deposit $1,000, Robinhood adds $10.

Merrill Edge offers a wide variety of account types that will meet the needs of most customers. In addition to standard brokerage accounts, Merrill Edge allows customers to open joint accounts, retirement accounts (including small business accounts like SEP IRA and SIMPLE IRA), custodial accounts like UGMA and UTMA, as well as 529 college savings plans.

What's more, because it is a subsidiary of Bank of America, Merrill Edge investors can open and integrate Bank of America checking and savings accounts. Both can be accessed through the Merrill Edge desktop and mobile portals, and money can be seamlessly transferred between brokerage and bank accounts. It's a convenient all-in-one offering that Robinhood lacks.

READ MORE: Best Online Stock Brokers for Beginners

Both Merrill Edge and Robinhood have highly rated apps that are functional and easy to use, although Robinhood is clearly the mobile-first platform. Investors who prefer to use an app to simply buy and sell stocks and options often find Robinhood to be one of the most user-friendly apps in the market.

Merrill Edge's investing app holds ratings of 4.6 and 3.3 out of 5 stars on the App Store and Google Play store, respectively. Robinhood's ratings are 4.2 and 4.1, but with a big asterisk, as its ratings were significantly higher prior to the "meme stock" craze of early 2021, when it was forced to suspend trading in certain volatile stocks to the disappointment of many customers.

Merrill Edge reviews often call out the ability to seamlessly integrate with other Bank of America accounts and the many features of the app. Robinhood reviews often cite the user-friendliness of the app.

Robinhood offers lots of educational investment articles through Robinhood Learn, its educational desktop platform. Articles are bite-sized and plentiful. That said, Robinhood's advanced mobile and desktop charts are limited to Gold subscribers. Merrill Edge offers the MarketPro desktop trading platform that offers a fully customizable trading layout (it comes with plenty of bells and whistles) at no added cost, which might be more appealing to sophisticated investors.

RELATED: Best Free Stock Trading Apps

Both of these are excellent brokerage options, but they are clearly targeted to different types of customers. Merrill Edge is the more well-rounded of the two, aiming to provide investment solutions that meet the needs of most investors. Robinhood caters to active traders, though members may also prefer it for its unique IRA match, especially Gold members.

Robinhood is the better choice for your needs if:

• You're looking to trade cryptocurrencies
• You want to buy fractional shares of stock
• You're a part of the active trader crowd
• You want 1% to 3% match on IRA deposits

Merrill Edge is the better choice for your needs if:

• You're looking to open a nontraditional retirement account
• You want to invest in mutual funds
• You want a robo-advisory service to put your portfolio on autopilot