Once you open an IRA, your contributions will grow tax-deferred (traditional IRAs) or tax-free (Roth IRAs) until you retire. But IRAs offer more than just tax savings. Compared with 401(K) plans, IRAs offer more investment choices, enabling you to invest in everything from individual stocks to options and funds.

Today we'll review a popular brokerage, Merrill Edge, to see how its IRAs stack up on features that are most important to long-term investors.

Commission prices and trading costs

The fixed commission came to an end in 1975, and trading costs have plummeted ever since. Discount brokers like Merrill Edge make it possible to buy and sell stocks, options, and ETFs and spend less than it costs to buy a value meal at a fast food joint.

Stocks and ETFs

Stock Options

Mutual Funds

$6.95 per trade

$6.95 + $0.75 per contract

$19.95 per purchase

Data source: company website.

But even common commission schedules don't capture the full extent to which prices have declined. Merrill Edge clients can invest in some mutual funds for free. In addition, some customers receive up to 30 commission-free trades every single month for maintaining a minimum balance in their Merrill Edge or Bank of America accounts (see special offers for IRAs to learn more).

Mutual fund choices and commission-free ETFs

Brokerages aren't just for frequent stock and option traders. Merrill Edge offers its clients the ability to invest in thousands of funds, many of which can be purchased without paying a fee to make the trade.

Total Mutual Funds


Commission-Free ETFs

More than 7,600

More than 2,700

Not available

Data source: company website.

Cost-conscious investors might find some savings by shopping from the company's list of no-transaction-fee funds, given that other company charges $19.95 to invest in funds that don't make the cut.

Minimum deposit requirement for Merrill Edge IRAs

As with most of its accounts, Merrill Edge's traditional or Roth IRA accounts do not have a minimum initial deposit requirement. Therefore, investors can get started with whatever they feel comfortable investing and build up their account over time.

Glass jar filled with coins and currency.

You don't have to make a big deposit on day one. Image source: Getty Images.

International stocks and ADRs

Merrill Edge clients can invest in foreign companies via mutual funds, ETFs, and ADRs. However, it doesn't offer the ability to send trades to international stock exchanges.

Type of Investment


American depositary receipts (ADRs)


Stocks traded on international stock markets


Mutual funds and ETFs of foreign stocks


Data source: company website.

Realistically, limitations on foreign investments may not problematic for people who plan to invest in well-known companies such as BP or Nestle, both of which have ADRs that trade in the United States. Fund investors will find plenty of choices when it comes to foreign stock mutual funds and ETFs that offer diversified exposure to companies listed all around the world. The inability to send trades to international markets is most limiting when it comes to smaller foreign companies.

Mobile app

Merrill Edge clients can check their accounts and place trades from the convenience of a mobile phone or tablet. Here's how its own users rated its app, with ratings as of Feb. 1, 2017:

Apple App Store

Google Play

2.5 stars

4.0 stars

Data source: relevant app stores.

IRA account fees

Hidden fees can be an investor's worst nightmare. Keep an eye out for inactivity fees (for infrequent trading) or maintenance fees (which are assessed just for having an account).

Luckily, Merrill Edge customers won't pay either type of fee, but some brokers hit IRAs with recurring monthly and annual charges that can take a bite out of your balance. It's just one more thing to think about when you comparison shop for a broker to house your account.

Research and retirement planning tools

Merrill Edge customers can tap directly into its proprietary Bank of America/Merrill Lynch research and learn about its analysts' buy-rated companies. It also offers third-party research from S&P Capital IQ, Morningstar, and Thomson Reuters.

Clients will find numerous retirement-specific calculators and tools on its website, which enable you to benchmark your retirement savings and progress against your retirement goals.

Is a Merrill Edge IRA right for you?

Whether you plan on opening a traditional or Roth IRA, there's plenty to like about what Merrill Edge has to offer. The company boasts relatively low commissions and a diverse selection of mutual funds, and it doesn't require a minimum initial deposit to get started. That said, investors who use a lot of ETFs might be better suited with a broker that offers commission-free ETFs in addition to no-transaction-fee mutual funds.

The truth is that no broker is the one-size-fits-all solution to every investor. What really matters is how the broker's product line-up and pricing fits inside the specific needs of your portfolio. To be clear, The Motley Fool does not endorse any particular brokerage, but we can help you find one that is a good fit for you. Visit Fool.com's IRA Center to compare leading discount brokers, and see if you qualify for a special offer just for opening an account.