Merrill Edge is a popular online brokerage platform that allows investors to buy and sell stocks, bonds, and other financial instruments. If you’re considering using Merrill Edge to invest your money, you may be wondering if your funds are safe and insured by the Federal Deposit Insurance Corporation (FDIC). In this article, we’ll take a closer look at Merrill Edge’s FDIC insurance coverage and what it means for you as an investor.
What is FDIC Insurance?
The Federal Deposit Insurance Corporation (FDIC) is an independent agency of the federal government that was created in 1933 to protect depositors in case of bank failures. FDIC insurance provides coverage for deposits made at FDIC-insured banks up to a certain amount, currently set at $250,000 per depositor, per account type, and per insured bank. This means that if a bank were to fail, the FDIC would step in to reimburse depositors up to the insured amount.
Is Merrill Edge FDIC Insured?
Merrill Edge is a division of Bank of America, which is a member of the FDIC. This means that Merrill Edge accounts are FDIC insured up to $250,000 per depositor, per account type, and per insured bank. However, it’s important to note that FDIC insurance coverage only applies to cash deposits held in Merrill Edge Deposit Accounts, which are offered through Bank of America, N.A. Cash balances held in a Merrill Edge brokerage account are not covered by FDIC insurance.
According to Merrill Edge’s website, “Merrill Edge Deposit Accounts are provided by Bank of America, N.A. Member FDIC. Merrill Edge is available through Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S), and consists of the Merrill Edge Advisory Center (investment guidance) and self-directed online investing.”
This means that if you have a Merrill Edge Deposit Account, your cash deposits are insured by the FDIC up to the $250,000 limit. However, if you have a Merrill Edge brokerage account and hold cash balances in that account, those balances are not covered by FDIC insurance.
What Does FDIC Insurance Cover?
FDIC insurance covers deposits in checking, savings, money market, and certificate of deposit (CD) accounts. FDIC insurance does not cover investment products such as stocks, bonds, mutual funds, and other securities. FDIC insurance also does not cover losses due to fraud or theft. It is important to read and understand the terms and conditions of your account agreement to know what is and is not covered by FDIC insurance.
How to Maximize FDIC Coverage at Merrill Edge
If you have more than $250,000 in cash deposits at Merrill Edge, you can still maximize your FDIC coverage by opening multiple accounts with different ownership categories. For example, you can open a single account in your name, a joint account with your spouse, and a trust account. Each account would be insured up to $250,000, providing you with a total coverage of $750,000.
What Are Merrill Edge’s Deposit Account Options?
Merrill Edge offers several deposit account options that are FDIC insured. These include:
Merrill Edge Bank Deposit Account: This is a standard checking account that offers online banking, bill pay, and mobile deposit. This account has no monthly maintenance fee and comes with a debit card.
Merrill Edge Interest Checking Account: This is a checking account that pays interest on your balances. It also offers online banking, bill pay, and mobile deposit, and comes with a debit card. This account has a $25 monthly maintenance fee, but the fee can be waived if you maintain a minimum daily balance of $20,000 across your Bank of America deposit accounts.
Merrill Edge MarketSafe® CD: This is a certificate of deposit that offers FDIC insurance and the potential for market-linked returns. The CD has a fixed term and a minimum deposit requirement.
It’s important to note that while these deposit account options are FDIC insured, they may not be the best option for every investor. Before opening a Merrill Edge Deposit Account, you should carefully consider your investment goals, risk tolerance, and liquidity needs.
In conclusion, Merrill Edge is FDIC insured, but only for cash deposits held in Merrill Edge Deposit Accounts. If you hold cash balances in a Merrill Edge brokerage account, those balances are not covered by FDIC insurance. If you’re considering opening a Merrill Edge Deposit Account, it’s important to carefully consider your investment goals and needs and to understand the terms and conditions of each account option before making a decision.