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Merrill Lynch Preferred Deposit

Posted: Thu Aug 23, 2018 5:41 pm
by DTalos
I received an letter in mail about a bank deposit program from Merrill Lynch called Preferred Deposit that offers an interest rate of 1.56% vs the current .33% that I am currently earning in their Cash Management Account. The only "catch" that's prominently stated is that you would need to call your financial advisor to make deposits and withdrawals. The money is FDIC ensured and placed into a deposit account with Bank of America, N.A. What are the hidden or undisclosed "catches" to these higher interest rate accounts. Why would they offer such a higher interest rate with such few stated restrictions? Is Bank of America investing the deposits in riskier securities?

Re: Merrill Lynch Preferred Deposit

Posted: Thu Aug 23, 2018 6:09 pm
by Longtermgrowth
Merrill Edge account? Merrill Edge has two auto sweep options with a 7 day SEC yield close to that: BIF Money Fund and BIF Treasury Fund.
https://www.blackrock.com/cash/en-us/products/282856/

I use the BIF Money Fund to avoid phone calls, along with an online savings account that pays more than their Preferred Deposit rate.

Re: Merrill Lynch Preferred Deposit

Posted: Thu Aug 23, 2018 6:19 pm
by whodidntante
Merrill Lynch is not the same as Merrill Edge.

OP, a lot of us don't use full service brokers like Merrill Lynch due to the high costs involved. You might get better responses on another forum.

Re: Merrill Lynch Preferred Deposit

Posted: Fri Aug 24, 2018 1:58 am
by DTalos
Longtermgrowth wrote:
Thu Aug 23, 2018 6:09 pm
Merrill Edge account? Merrill Edge has two auto sweep options with a 7 day SEC yield close to that: BIF Money Fund and BIF Treasury Fund.
https://www.blackrock.com/cash/en-us/products/282856/

I use the BIF Money Fund to avoid phone calls, along with an online savings account that pays more than their Preferred Deposit rate.


I have a Merrill Lynch account, not Merrill Edge.

Re: Merrill Lynch Preferred Deposit

Posted: Fri Aug 24, 2018 5:15 am
by Longtermgrowth
DTalos wrote:
Fri Aug 24, 2018 1:58 am
I have a Merrill Lynch account, not Merrill Edge.
Sorry about that. The options you listed are also available through Merrill Edge.

I just did a lot of searching trying to find automatic sweep money market funds for Merrill Lynch accounts, and found this article partially behind a paywall indicating there may not be any very soon, at least for new accounts: https://www.google.com/amp/s/www.wsj.co ... 1534880179

As far as the question about risk of Preferred Deposit, with so many FDIC insured online savings accounts paying close to and some over 2% currently, it sounds fairly average to me.

Re: Merrill Lynch Preferred Deposit

Posted: Sun Aug 26, 2018 1:44 am
by DTalos
I don't understand why the Cash Management Account pays .33% interest, yet the Preferred Deposit Account pays 1.56% interest and the latter is FDIC insured.

Re: Merrill Lynch Preferred Deposit

Posted: Sun Aug 26, 2018 7:47 am
by mega317
One catch I can think of is the advisor has you on the phone to try to talk you into doing something more lucrative for him or her with the money. You are aware that you can get higher rates with FDIC, right?

Re: Merrill Lynch Preferred Deposit

Posted: Thu Sep 06, 2018 2:37 pm
by DTalos
I just looked at my statement and read that the cash management account is FDIC insured, but not SIPC insured. So, if both accounts are FDIC insured, what's the catch, other than having to contact the advisor for deposits and withdrawals?

Re: Merrill Lynch Preferred Deposit

Posted: Thu Sep 06, 2018 4:53 pm
by megabad
DTalos wrote:
Thu Sep 06, 2018 2:37 pm
I just looked at my statement and read that the cash management account is FDIC insured, but not SIPC insured. So, if both accounts are FDIC insured, what's the catch, other than having to contact the advisor for deposits and withdrawals?
I have no experience with ML specifically but it appears you have outlined the extra step needed. If this is truly a bank account, you may not be able to freely move money between the two without ACH (slow). SIPC not relevant for bank accounts since no brokerage is involved. Since neither of these accounts serve a purpose to me other than a short term sweep account, the interest rate is not relevant in my mind. Actually, I would probably want a lower interest rate in my sweep account to avoid gains.

Re: Merrill Lynch Preferred Deposit

Posted: Thu Sep 13, 2018 8:55 pm
by kevdude
Interesting that the rate thru ML is 1.56%. We use Merrill Edge and the rate for their Preferred Deposit is 1.82%. It is FDIC insured up to $250k, but we do need to talk to a rep in order to move money in and out of it. The initial minimum is $100k, but it can drop below that. I'm not sure if there is a minimum number of days it has to be at/above the $100k before it can drop below.

Re: Merrill Lynch Preferred Deposit

Posted: Tue Oct 09, 2018 11:41 am
by FlamingoTime
I'm in the process of opening a Merrill Edge account, mainly to maintain my Bank of America Platinum Honors perks. I was told by the Rep that there is no minimum time that the cash has to stay in the Preferred Deposit account after the minimum initial deposit of at least $100,000. The Preferred Deposit account is currently paying 1.97% interest. I was going to purchase some short term brokered CD's, but I'm now thinking perhaps I will keep it liquid until December to see what rates do.

Re: Merrill Lynch Preferred Deposit

Posted: Thu Dec 27, 2018 10:00 am
by md01
I spoke to one of their reps yesterday, and he quoted that the rate in the preferred deposit is now going up to 2.07%. The only "catch" as far as I can see is that you have to make a phone call for both deposits and withdrawals with same day settlement if calls are made before 4:30 pm ET.

Re: Merrill Lynch Preferred Deposit

Posted: Thu Dec 27, 2018 10:09 am
by md01
Couple of other notes from my call yesterday with the rep:
They incentivize you to bring money from other bank accounts by offering a one time bonus ranging from $150 to $600 depending on the amount brough tfrom other banks ranging from $50K to $200k+. There is a 50% booster on this bonus for existing platinum honors clients with BofA - so $225 to $900 if you already have the platinum honors benefit.

I asked him : what if I just moved a BofA to another bank and then re-routed to Merrill - will I still get the benefit of bringing money from an outside bank? His response was that they have ways to track the outflow/inflow of money from our accounts, so it is likely that we wouldn't get the benefit of cash bonus in this case.

Re: Merrill Lynch Preferred Deposit

Posted: Thu Jan 10, 2019 5:44 pm
by Watts
Does anyone know the minimum maintenance balance to stay in Preferred Deposit? If the balance drops below $100k, are you automatically ejected from the savings account?

I can’t seem to find any info about this online. Thanks.

Re: Merrill Lynch Preferred Deposit

Posted: Thu Jan 10, 2019 6:50 pm
by FlamingoTime
I just found a PDF document online that said it is a $100,000 minimum initial deposit in Preferred Deposit. I'm not sure if you have to keep a minimum balance. For some reason I don't think you do.

Re: Merrill Lynch Preferred Deposit

Posted: Sun Jan 13, 2019 5:35 pm
by Watts
As an update, I contacted Merrill Edge. The rep said that after the $100K minimum deposit, there does not appear to be any penalty for having a balance less than $100K. I'll post an update if I get conflicting information.

Re: Merrill Lynch Preferred Deposit

Posted: Mon Jan 14, 2019 12:48 am
by DTalos
The Preferred Deposit doesn't mention anything about the ability of to write checks on it, a debit card, or conduct Bill Pay with it, like the Cash Management Account which pays a lower interest rate. Also don't know how the advisor would get the withdrawal to you? Would he/she just issue you a check?

The Cash Management Account has an annual fee of $125 per year. Not sure if there is any annual fee for the Preferred Deposit program.

Are brokerages liberal about waiving account fees?

Re: Merrill Lynch Preferred Deposit

Posted: Wed Feb 06, 2019 3:12 pm
by gman10515
Watts wrote:
Sun Jan 13, 2019 5:35 pm
As an update, I contacted Merrill Edge. The rep said that after the $100K minimum deposit, there does not appear to be any penalty for having a balance less than $100K. I'll post an update if I get conflicting information.
I can attest to this. I have had significantly less than 100k in my MLPDA for 6 months with no issue.

Re: Merrill Lynch Preferred Deposit

Posted: Wed Feb 06, 2019 7:53 pm
by azianbob
DTalos wrote:
Mon Jan 14, 2019 12:48 am
The Preferred Deposit doesn't mention anything about the ability of to write checks on it, a debit card, or conduct Bill Pay with it, like the Cash Management Account which pays a lower interest rate. Also don't know how the advisor would get the withdrawal to you? Would he/she just issue you a check?

The Cash Management Account has an annual fee of $125 per year. Not sure if there is any annual fee for the Preferred Deposit program.

Are brokerages liberal about waiving account fees?
They only have the fee if you choose to have an advisor attached. If you do totally self directed option, there is no annual fee, only a transaction commission fee of $8 or something. But if you have more than $50k in assets they waive the fee for 30 trades a month