Rolling over a 401(k) to a Merrill Edge IRA is a five-step process that takes roughly one to three weeks and incurs no taxes or penalties if done as a direct rollover. You open a Merrill Edge IRA, contact your old plan administrator, request a direct transfer, and then invest the funds once they arrive. The rollover can also boost your Preferred Rewards tier — a meaningful benefit if you bank with Bank of America.
Should You Roll Over Your 401(k) to Merrill Edge?
A rollover makes sense when you leave a job and want to consolidate retirement savings in one place. Merrill Edge is worth considering if:
- You already bank with Bank of America — a Merrill Edge IRA counts toward your Preferred Rewards balance, potentially unlocking a 25–75% bonus on BofA credit card rewards
- You want free ETF and stock trading in your IRA — Merrill Edge charges $0 commissions on stocks and ETFs, including inside IRA accounts
- You want access to BofA Global Research — institutional-grade analyst reports on thousands of stocks, included free with your account
- You use Merrill Guided Investing — rolling over increases your balance, and Platinum Honors clients ($100,000+) pay $0 for the robo-advisor
If you prioritize the widest fund selection, Fidelity’s rollover IRA or Schwab’s rollover IRA may offer more mutual fund options. If you want the lowest-cost index funds, Vanguard’s rollover IRA is a strong alternative.
Direct Rollover vs Indirect Rollover
There are two types of 401(k) rollovers. Always choose a direct rollover.
| Feature | Direct rollover | Indirect rollover |
|---|---|---|
| Check made payable to | Merrill Edge FBO [Your Name] | You personally |
| Taxes withheld by employer | No | Yes — 20% mandatory withholding |
| Risk of penalty | None | High — if not redeposited within 60 days |
| Time to complete | 7–21 business days | Up to 60 days |
| Recommended? | Yes | Avoid if possible |
In an indirect rollover, your old employer withholds 20% of the distribution for taxes. To complete a tax-free rollover, you must deposit the full original amount — including the withheld 20% from your own savings — into the IRA within 60 days. If you miss the deadline or can’t cover the withheld amount, the shortfall is treated as a taxable distribution plus a 10% early withdrawal penalty if you’re under 59½.
The IRS allows only one indirect rollover per 12-month period across all IRAs. There is no such limit on direct rollovers.
Step-by-Step: How to Roll Over a 401(k) to Merrill Edge
Step 1: Open a Merrill Edge Rollover IRA
If you don’t already have a Merrill Edge IRA, open one before initiating the rollover. Go to merrilledge.com and select “Open an Account → Rollover IRA.”
- For a traditional 401(k), open a Traditional IRA (also called a Rollover IRA)
- For a Roth 401(k), open a Roth IRA
- If you have both, you may need to open two separate accounts
There is no account minimum and no fee to open the account. You can open it online in about 10–15 minutes.
Step 2: Contact Your Old Plan Administrator
Call the HR department or benefits administrator at your former employer and ask to initiate a direct rollover from your 401(k) to Merrill Edge. You’ll need:
- Your Merrill Edge IRA account number (available on merrilledge.com after account opening)
- The IRA custodian name: Merrill Lynch, Pierce, Fenner & Smith Incorporated
- The mailing address Merrill Edge provides for rollover checks
Many plan administrators have an online rollover portal you can use instead of calling. Check your plan’s website first.
Step 3: Request a Direct Rollover Check
Ask your plan administrator to make the check payable to:
Merrill Lynch, Pierce, Fenner & Smith Incorporated FBO [Your Full Name] Account number: [Your Merrill Edge IRA account number]
“FBO” means “for benefit of.” The check goes to Merrill Edge, not to you — this is what makes it a direct rollover and avoids the 20% withholding.
Some plans send the check directly to Merrill Edge. Others mail it to your home address to forward. If you receive the check, do not deposit it in your bank account — mail or deposit it to Merrill Edge immediately.
Step 4: Submit the Check to Merrill Edge
If your plan mails the rollover check to your home address, you have two options:
- Mail it to Merrill Edge — use the address provided on their rollover documentation
- Mobile deposit — the Merrill Edge app supports mobile check deposit for rollover checks, which is the fastest option
Once Merrill Edge receives and processes the check, your IRA balance will update within 2–5 business days.
Step 5: Invest the Funds
Once the rollover is complete, your cash sits in your Merrill Edge IRA’s core account earning minimal interest. You must actively invest it — the rollover does not automatically invest the funds.
Log in to merrilledge.com or the mobile app and place buy orders for your chosen ETFs, stocks, or mutual funds. If you prefer automated investing, you can move the funds into Merrill Guided Investing (the robo-advisor).
Note: If you’re unsure how to invest the funds, review the Merrill Edge IRA guide for strategies on building a retirement portfolio.
Timeline: What to Expect
| Stage | Typical timeframe |
|---|---|
| Open Merrill Edge IRA | 1–2 business days (online approval) |
| Old plan processes rollover request | 3–10 business days |
| Check mailed/wired to Merrill Edge | 1–5 business days |
| Merrill Edge credits your account | 1–3 business days after receipt |
| Total (typical) | 7–21 business days |
Electronic ACH or wire rollovers (some large 401(k) plans support this) are faster — typically 3–7 business days total.
How the Rollover Affects Your Preferred Rewards Tier
Your Merrill Edge IRA balance counts toward your combined Bank of America and Merrill balance for the Preferred Rewards program. This makes a 401(k) rollover financially meaningful beyond just the retirement account itself.
Worked example: James has $35,000 in his Bank of America checking and savings accounts and a $5,000 Merrill Edge brokerage account — a combined balance of $40,000, which puts him at Preferred Rewards Gold tier (25% credit card rewards bonus). He rolls over a $25,000 401(k) to a Merrill Edge IRA. His new combined balance is $65,000, pushing him into Platinum tier (50% credit card rewards bonus).
On a card earning $800/year in base rewards, the jump from Gold to Platinum adds an extra $200/year in bonus rewards — just from rolling over the 401(k).
Common Mistakes to Avoid
- Taking an indirect rollover without planning for the withholding — if your employer withholds 20%, you need to cover that from savings or it becomes a taxable distribution
- Missing the 60-day deadline — the IRS enforces this strictly; late deposits are taxable plus a 10% penalty
- Rolling Roth to Traditional or vice versa — keep the tax treatment consistent; a Roth 401(k) must go into a Roth IRA
- Leaving cash uninvested — the rollover deposits cash into your IRA; you must place buy orders to put it to work
- Rolling over if you’re still working — if you haven’t left the employer, you may not be eligible to roll over an active 401(k). Check your plan rules.
Frequently Asked Questions
See the FAQ section below, or explore the Merrill Edge IRA guide for contribution limits and investment options. For a full comparison of rollover IRA options, see the best brokerage accounts guide.
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