Bank of America/Merrill Edge - Preferred Rewards

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anon_investor
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by anon_investor »

Morik wrote: Thu Dec 22, 2022 5:05 pm
anon_investor wrote: Thu Dec 22, 2022 4:58 pm
Morik wrote: Thu Dec 22, 2022 4:48 pm
anon_investor wrote: Thu Dec 22, 2022 4:37 pm
Morik wrote: Thu Dec 22, 2022 3:13 pm

Are you sure? I'm not an expert here by any means, but from info I can find...

GOTXX prospectus: "Pursues current income consistent with stability of principal and liquidity by investing in a portfolio of U.S. Treasury and government securities maturing in 397 days or less that pay interest exempt from state personal income tax."

Some random thing from searching: https://www.rbcwm-usa.com/resources/file-687493.pdf
"Agency bonds are
attractive to investors because of the
safety, liquidity, higher yields relative
to Treasuries, and for some agencies,
their state tax-exempt interest."

It seems like US Gov Agency debt isn't necessarily state tax exempt, but could potentially be depending on the agency.
It sounds like GOTXX only invests in the latter type; US Gov agency debt that is state tax exempt.
Interesting. Can't seem to find anything on the Federated Hermes website listing how much of the yield from GOTXX is actually exempt from state/local income tax.
I found this (screenshotted): https://ibb.co/hgc3DHY

If you go to the fund page and go to the distributions section and set the year to a past year, they appear to include some additional info.

I am mildly confused that they show no capital gains at all (at least, for 2021, if I click the capital gains tab, it says it couldn't find any), but the section on state taxes just talks about capital gains and not about dividends...
Capital gains distributions are different than dividends. Usually money market funds have little to no capital gains distributions because the short duration of the holdings.

Maybe someone else knows how to figure this out. Vanguard releases an info sheet annually that says what % of a funds yield is exempt from state/local income tax. Couldn't find something similar for Federated Hermes.
But it seems to list dates of dividend distributions in that table--there were no capital gains distributed in 2021.
Looking at 2020 it shows some non-0 percentages with dates that only correspond to dividends, not to capital gains.
This makes me think the table is mislabeled and they are actually showing the % of the distribution on that date that is subject to state tax.

Here are more screenshots, of 2020:
Image Image

On the other hand, if I look at TOIXX, for 2020 & 2021 they only show a few distributions on that table as state taxable... in total not very much state taxable at all, yet a significant portion of revenue was from repurchase agreements, which from everything I can find online are NOT state tax exempt...

EDIT: I think I partially figured it out.
Image

The final section shows a breakdown of income by type. You'd need to investigate each type of income to determine whether it is state tax exempt. I assume you would then multiply the annual total distributions by the % of income that was from non-exempt sources to determine final state taxes due.

However, I have no idea then how to use that first table in the screenshot, the one that shows a % of state taxes for capital gains... even though there was no gain distributed on those dates...
I think you need to look at the source of the income. It seems like in 2021, just over 91% was from "DIRECT FEDERAL OBLIGATIONS".
spammagnet
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by spammagnet »

bbrock wrote: Thu Dec 22, 2022 1:23 pm In consideration of the ME bonus, if I transfer my Roth IRA, get the $400 bonus, effectively that is a bigger bonus than if it was $400 to a traditional IRA. Right? Ultimately the $400 to a traditional would be less d/t Fed and CA taxes at withdrawal (currently we are at 24% + 9.3%)

It’s just recorded as earnings from reading the fine print, and what I’ve read in this thread.
I hadn't considered the effect of account type on the value of the bonus but you're right. You also are correct in that it's investment earnings in either account and not taxed as ordinary income. If transferring a taxable account, it is.

In my case, by using both my traditional and Roth IRAs I am just barely able to reach a higher reward threshold, so it's to my benefit to do so. I'm also in a lower marginal bracket and live in Florida (no state income tax) so the tax effect is smaller.
spammagnet
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by spammagnet »

anon_investor wrote: Thu Dec 22, 2022 3:11 pmIf you can convince my spouse, I would do that. Using different CCs is acceptable, Costco cash cards are a bridge too far... :P [my spouse does 90% of the actual Costco shopping]
Does Costco allow paying with their app, using the cash cards as a payment method? If so, your spouse may find that easier than pulling out a credit card. You can control the payment method online without their involvement.

Publix has long allowed paying with their app (I do, because it qualifies as online) but only recently added the ability to use their gift cards as a payment method. I don't need that to maximize BA rewards since it already qualifies as online but it allows me to hit MSRs for other new account bonuses, if the need arises. I did that recently and now am working off a $1,500 gift card balance. (I wouldn't have made the deadline, otherwise.)
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anon_investor
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by anon_investor »

spammagnet wrote: Thu Dec 22, 2022 6:17 pm
anon_investor wrote: Thu Dec 22, 2022 3:11 pmIf you can convince my spouse, I would do that. Using different CCs is acceptable, Costco cash cards are a bridge too far... :P [my spouse does 90% of the actual Costco shopping]
Does Costco allow paying with their app, using the cash cards as a payment method? If so, your spouse may find that easier than pulling out a credit card. You can control the payment method online without their involvement.

Publix has long allowed paying with their app (I do, because it qualifies as online) but only recently added the ability to use their gift cards as a payment method. I don't need that to maximize BA rewards since it already qualifies as online but it allows me to hit MSRs for other new account bonuses, if the need arises. I did that recently and now am working off a $1,500 gift card balance. (I wouldn't have made the deadline, otherwise.)
Not that I know of, and I can't get my spouse to even set up Apple Pay... so that won't help. It was hard enough to convince her to switch to multiple CCs to pay at Costco vs. just using the Citi Costco Visa. 3.5% > 2%, I pick my battles!
Morik
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by Morik »

anon_investor wrote: Thu Dec 22, 2022 5:49 pm
I think you need to look at the source of the income. It seems like in 2021, just over 91% was from "DIRECT FEDERAL OBLIGATIONS".
Right, but then what is that other table?

Could it be that you need to:
- Looking at source of income, sum up the non-exempt sources to get the % of income that state taxes are owed on.
- ALSO multiply each distribution on the matching date by the % shown in that other table (usually 0%) to get the amount of tax due to short term capital gains (despite none being distributed?)

E.g., for TOIXX in 2021:
Image Image Image

(And if you click "Final Capital Gains for 2021", it says there aren't any.)

Multiply your total dividends on 1099-DIV by 29.64% to get the amount of income on which you pay state taxes.

Then: Add 9.12% of the 8-31-21 distribution payout shown on your account statement to the amount of income on which you pay state taxes. Also add 0.12% of the 12-31-21 distribution.

Just to re-iterate, this is a guess/question on my part, not an authoritative answer of any sort.
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anon_investor
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by anon_investor »

Morik wrote: Thu Dec 22, 2022 6:31 pm
anon_investor wrote: Thu Dec 22, 2022 5:49 pm
I think you need to look at the source of the income. It seems like in 2021, just over 91% was from "DIRECT FEDERAL OBLIGATIONS".
Right, but then what is that other table?

Could it be that you need to:
- Looking at source of income, sum up the non-exempt sources to get the % of income that state taxes are owed on.
- ALSO multiply each distribution on the matching date by the % shown in that other table (usually 0%) to get the amount of tax due to short term capital gains (despite none being distributed?)

E.g., for TOIXX in 2021:
Image Image Image

(And if you click "Final Capital Gains for 2021", it says there aren't any.)

Multiply your total dividends on 1099-DIV by 29.64% to get the amount of income on which you pay state taxes.

Then: Add 9.12% of the 8-31-21 distribution payout shown on your account statement to the amount of income on which you pay state taxes. Also add 0.12% of the 12-31-21 distribution.

Just to re-iterate, this is a guess/question on my part, not an authoritative answer of any sort.
T-Bills are so much easier for tax prep! The 1099 just tells you the $ amount exempt from state taxes! Lol
spammagnet
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by spammagnet »

anon_investor wrote: Thu Dec 22, 2022 6:22 pm... I can't get my spouse to even set up Apple Pay...
As tap to pay POS terminals become more common it gets easier to use my phone. I've had some success encouraging my wife to do the same. She doesn't resist so much as forget. It's habit to pull out a wallet.
Morik
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by Morik »

anon_investor wrote: Thu Dec 22, 2022 6:37 pm
Morik wrote: Thu Dec 22, 2022 6:31 pm
anon_investor wrote: Thu Dec 22, 2022 5:49 pm
I think you need to look at the source of the income. It seems like in 2021, just over 91% was from "DIRECT FEDERAL OBLIGATIONS".
Right, but then what is that other table?

Could it be that you need to:
- Looking at source of income, sum up the non-exempt sources to get the % of income that state taxes are owed on.
- ALSO multiply each distribution on the matching date by the % shown in that other table (usually 0%) to get the amount of tax due to short term capital gains (despite none being distributed?)

E.g., for TOIXX in 2021:
Image Image Image

(And if you click "Final Capital Gains for 2021", it says there aren't any.)

Multiply your total dividends on 1099-DIV by 29.64% to get the amount of income on which you pay state taxes.

Then: Add 9.12% of the 8-31-21 distribution payout shown on your account statement to the amount of income on which you pay state taxes. Also add 0.12% of the 12-31-21 distribution.

Just to re-iterate, this is a guess/question on my part, not an authoritative answer of any sort.
T-Bills are so much easier for tax prep! The 1099 just tells you the $ amount exempt from state taxes! Lol
Maybe the 1099 for this would also indicate the amount exempt? In which case what I said above would maybe be the only way for someone who didn't have any investment in this to figure out how much they would have owed in state taxes, but anyone actually investing in it wouldn't have to do any calculations?

Anyone reading this have a 1099 from Federated Hermes? If so, can you confirm whether or not they have this data on there?
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anon_investor
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by anon_investor »

Morik wrote: Thu Dec 22, 2022 6:40 pm
anon_investor wrote: Thu Dec 22, 2022 6:37 pm
Morik wrote: Thu Dec 22, 2022 6:31 pm
anon_investor wrote: Thu Dec 22, 2022 5:49 pm
I think you need to look at the source of the income. It seems like in 2021, just over 91% was from "DIRECT FEDERAL OBLIGATIONS".
Right, but then what is that other table?

Could it be that you need to:
- Looking at source of income, sum up the non-exempt sources to get the % of income that state taxes are owed on.
- ALSO multiply each distribution on the matching date by the % shown in that other table (usually 0%) to get the amount of tax due to short term capital gains (despite none being distributed?)

E.g., for TOIXX in 2021:
Image Image Image

(And if you click "Final Capital Gains for 2021", it says there aren't any.)

Multiply your total dividends on 1099-DIV by 29.64% to get the amount of income on which you pay state taxes.

Then: Add 9.12% of the 8-31-21 distribution payout shown on your account statement to the amount of income on which you pay state taxes. Also add 0.12% of the 12-31-21 distribution.

Just to re-iterate, this is a guess/question on my part, not an authoritative answer of any sort.
T-Bills are so much easier for tax prep! The 1099 just tells you the $ amount exempt from state taxes! Lol
Maybe the 1099 for this would also indicate the amount exempt? In which case what I said above would maybe be the only way for someone who didn't have any investment in this to figure out how much they would have owed in state taxes, but anyone actually investing in it wouldn't have to do any calculations?

Anyone reading this have a 1099 from Federated Hermes? If so, can you confirm whether or not they have this data on there?
Merrill Edge would issue the 1099, and I don't think that info is ever on the 1099 for mutual funds or ETFs, at least I haven't see it on 1099s from Vanguard or Fidelity. This is my first year holding MMFs at Merrill Edge.
Morik
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by Morik »

So according to https://www.investopedia.com/terms/a/agencybonds.asp, there are federal governmental agency bonds that are fully backed by the US gov just like treasuries, but have slightly higher rates due to less liquidity than treasuries.

That page also has some statements on which types are/are not subject to state taxes.


Also from that page:
Agency bonds, when bought at a discount, may subject investors to capital gains taxes when they are sold or redeemed. Capital gains or losses when selling agency bonds are taxed at the same rates as stocks.
I bet that table with capital gains and state tax % refers to this activity. I.e., the amount of the distribution funded by the sale or redemption of agency bonds purchased at a discount or other similar things? I checked GOTXX and it shows some capital gains state taxes for 2021. I wonder if that came from those 'Other' investments (~9% of holdings).
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by MikeG62 »

anon_investor wrote: Thu Dec 22, 2022 3:05 pm
...Only US treasury securities are state tax exempt. US government agency debt is not exempt from state income tax and is also not backed by the full faith and credit of the US like treasuries, so in theory less safe.
Some US Gov agency debt is exempt from state income taxes.

https://www.investopedia.com/terms/a/agencybonds.asp

"Tennessee Valley Authority (TVA), Federal Home Loan Banks, and Federal Farm Credit Banks agency bonds are exempt from local and state taxes."

https://www.raymondjames.com/wealth-man ... securities

I've bought a decent amount of agency paper (FFCB and FHLB) as the yields have been hard to pass up. I have difficulty imagining the US Gov allowing debt from these agencies fail (in some sort of severe economic crisis). They don't have a track record of allowing things like this to happen. Long term implication to the funding market would be profound. After all, how would they ever raise funds again. Keep in mind this is AAA rated paper.
Real Knowledge Comes Only From Experience
Morik
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by Morik »

MikeG62 wrote: Fri Dec 23, 2022 8:15 am
anon_investor wrote: Thu Dec 22, 2022 3:05 pm
...Only US treasury securities are state tax exempt. US government agency debt is not exempt from state income tax and is also not backed by the full faith and credit of the US like treasuries, so in theory less safe.
Some US Gov agency debt is exempt from state income taxes.

https://www.investopedia.com/terms/a/agencybonds.asp

"Tennessee Valley Authority (TVA), Federal Home Loan Banks, and Federal Farm Credit Banks agency bonds are exempt from local and state taxes."

https://www.raymondjames.com/wealth-man ... securities

I've bought a decent amount of agency paper (FFCB and FHLB) as the yields have been hard to pass up. I have difficulty imagining the US Gov allowing debt from these agencies fail (in some sort of severe economic crisis). They don't have a track record of allowing things like this to happen. Long term implication to the funding market would be profound. After all, how would they ever raise funds again. Keep in mind this is AAA rated paper.
Also some of those agency debts are backed by the full faith of the US Gov according to that same article:
Federal government agency bonds are issued by the Federal Housing Administration (FHA), Small Business Administration (SBA), and the Government National Mortgage Association (GNMA). GNMAs are commonly issued as mortgage pass-through securities.

Like Treasury securities, federal government agency bonds are backed by the full faith and credit of the U.S. government. An investor receives regular interest payments while holding this agency bond. At its maturity date, the full face value of the agency bond is returned to the bondholder.

Federal agency bonds offer a slightly higher interest rate than Treasury bonds because they are less liquid. In addition, agency bonds may be callable, which means that the agency that issued them may decide to redeem them before their scheduled maturity date.
The FFCB/FHLB/etc are not fully backed though.

Looking at holdings for GOTXX, they hold from 4 entities as of 12-15-2022:
- Federal Home Loan Bank System (FHLB)
- Tennessee Valley Authority (TVA)
- Federal Farm Credit System (FFCB)
- US Treasuries

These holdings do include notes purchased at a discount.
From the investopedia article: "Agency bonds, when bought at a discount, may subject investors to capital gains taxes when they are sold or redeemed. Capital gains or losses when selling agency bonds are taxed at the same rates as stocks."
It isn't clear to me whether that should show up as a capital gain distribution from GOTXX, or whether some other mechanism like that table I posted earlier (reposted below here) needs to be used by the investor to figure out state taxes owed.
Image

In any case, the FHLB, TVA, and FFCS holdings are NOT backed by the full faith of the US gov, but the dividends are state tax exempt.

Below are my notes on the various MMFs that have same-day settlement. Note that the 'best for investors with state taxes' entries may still have lower post-tax returns compared to the not-state-tax-exempt versions of the funds--you'll need to compare the post-tax returns yourself based on the tax rate of your state.

1) GOTXX
Cut-off: 11:45 am EST
Holds treasuries plus not-fully-backed US agency debt. No repurchase agreements.
Best for: Investors with state taxes who want higher returns than pure treasuries and are ok with not-fully-guaranteed US gov debt, and who don't mind the 11:45 am cut-off time.

2) GOIXX, FIGXX, TFDXX
Cut-off: 1:45pm EST (GOIXX, FIGXX), 5 pm EST (TFDXX)
Like GOTXX, but also have repurchase agreements.
Best for: Investors with no state tax who want higher total return than pure treasuries and are ok with not-fully-guaranteed US gov debt, and/or who want a very late cutoff time (TFDXX).

3) TTTXX, UTIXX, FSIXX
Cut-off: 11:45 am EST (UTIXX, FSIXX), 1:45 pm EST (TTTXX).
Pure treasuries, no repurchase agreements.
Best for: Investors with state tax who want to stick to pure treasuries.

4) TOIXX, FISXX
Cut-off: 1:45 pm EST
Holds treasuries & treasury repurchase agreements.
Best for: Investors without state tax who want to stick to pure treasuries (well, and repurchase agreements, which aren't 100% risk free but my impression is its essentially risk-free and even if it falls through, things still mostly work out due to being collateralized with US treasuries).

So basically:
- Care about cut-off time? Maybe avoid group 1 & the earlier cutting off funds in group 3.
- Are you ok with re-purchase agreements outside of the tax consequences? If not, eliminate groups 2 & 4.
- Do you want pure treasuries? Use group 3 or 4. Otherwise consider groups 1 & 2 which are likely to have higher returns.
- Do you care about state taxes? You can adjust the various funds' yields to be post-tax and compare. Note that many of the not-fully-exempt funds will still have some state tax exempt income; you'd need to look at the composition of the holdings. Groups 1 & 3 should be fully or almost-fully state tax exempt (that pesky capital-gains on discount agency bonds issue may bring some state taxes for group 1).
Last edited by Morik on Fri Dec 23, 2022 12:33 pm, edited 2 times in total.
bbrock
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by bbrock »

spammagnet wrote: Thu Dec 22, 2022 6:07 pm
bbrock wrote: Thu Dec 22, 2022 1:23 pm In consideration of the ME bonus, if I transfer my Roth IRA, get the $400 bonus, effectively that is a bigger bonus than if it was $400 to a traditional IRA. Right? Ultimately the $400 to a traditional would be less d/t Fed and CA taxes at withdrawal (currently we are at 24% + 9.3%)

It’s just recorded as earnings from reading the fine print, and what I’ve read in this thread.
I hadn't considered the effect of account type on the value of the bonus but you're right. You also are correct in that it's investment earnings in either account and not taxed as ordinary income. If transferring a taxable account, it is.

In my case, by using both my traditional and Roth IRAs I am just barely able to reach a higher reward threshold, so it's to my benefit to do so. I'm also in a lower marginal bracket and live in Florida (no state income tax) so the tax effect is smaller.
Lucky you don’t have state taxes 👍
bbrock
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by bbrock »

Morik wrote: Fri Dec 23, 2022 9:26 am
MikeG62 wrote: Fri Dec 23, 2022 8:15 am
anon_investor wrote: Thu Dec 22, 2022 3:05 pm
...Only US treasury securities are state tax exempt. US government agency debt is not exempt from state income tax and is also not backed by the full faith and credit of the US like treasuries, so in theory less safe.
Some US Gov agency debt is exempt from state income taxes.

https://www.investopedia.com/terms/a/agencybonds.asp

"Tennessee Valley Authority (TVA), Federal Home Loan Banks, and Federal Farm Credit Banks agency bonds are exempt from local and state taxes."

https://www.raymondjames.com/wealth-man ... securities

I've bought a decent amount of agency paper (FFCB and FHLB) as the yields have been hard to pass up. I have difficulty imagining the US Gov allowing debt from these agencies fail (in some sort of severe economic crisis). They don't have a track record of allowing things like this to happen. Long term implication to the funding market would be profound. After all, how would they ever raise funds again. Keep in mind this is AAA rated paper.
Also some those agency debts are backed by the full faith of the US Gov according to that same article:
Federal government agency bonds are issued by the Federal Housing Administration (FHA), Small Business Administration (SBA), and the Government National Mortgage Association (GNMA). GNMAs are commonly issued as mortgage pass-through securities.

Like Treasury securities, federal government agency bonds are backed by the full faith and credit of the U.S. government. An investor receives regular interest payments while holding this agency bond. At its maturity date, the full face value of the agency bond is returned to the bondholder.

Federal agency bonds offer a slightly higher interest rate than Treasury bonds because they are less liquid. In addition, agency bonds may be callable, which means that the agency that issued them may decide to redeem them before their scheduled maturity date.
The FFCB/FHLB/etc are not fully backed though.

Looking at holdings for GOTXX, they hold from 4 entities as of 12-15-2022:
- Federal Home Loan Bank System (FHLB)
- Tennessee Valley Authority (TVA)
- Federal Farm Credit System (FFCB)
- US Treasuries

These holdings do include notes purchased at a discount.
From the investopedia article: "Agency bonds, when bought at a discount, may subject investors to capital gains taxes when they are sold or redeemed. Capital gains or losses when selling agency bonds are taxed at the same rates as stocks."
It isn't clear to me whether that should show up as a capital gain distribution from GOTXX, or whether some other mechanism like that table I posted earlier (reposted below here) needs to be used by the investor to figure out state taxes owed.
Image

In any case, the FHLB, TVA, and FFCS holdings are NOT backed by the full faith of the US gov, but the dividends are state tax exempt.

Below are my notes on the various MMFs that have same-day settlement. Note that the 'best for investors with state taxes' entries may still have lower post-tax returns compared to the not-state-tax-exempt versions of the funds--you'll need to compare the post-tax returns yourself based on the tax rate of your state.

1) GOTXX
Cut-off: 11:45 am EST
Holds treasuries plus not-fully-backed US agency debt. No repurchase agreements.
Best for: Investors with state taxes who want higher returns that pure treasuries and are ok with not-fully-guaranteed US gov debt, and who don't mind the 11:45 am cut-off time.

2) GOIXX, FIGXX, TFDXX
Cut-off: 1:45pm EST (GOIXX, FIGXX), 5 pm EST (TFDXX)
Like GOTXX, but also have repurchase agreements.
Best for: Investors with no state tax who want higher total return than pure treasuries and are ok with not-fully-guaranteed US gov debt, and/or who want a very late cutoff time (TFDXX).

3) TTTXX, UTIXX, FSIXX
Cut-off: 11:45 am EST (UTIXX, FSIXX), 1:45 pm EST (TTTXX).
Pure treasuries, no repurchase agreements.
Best for: Investors with state tax who want to stick to pure treasuries.

4) TOIXX, FISXX
Cut-off: 1:45 pm EST
Holds treasuries & treasury repurchase agreements.
Best for: Investors without state tax who want to stick to pure treasuries (well, and repurchase agreements, which aren't 100% risk free but my impression is its essentially risk-free and even if it falls through, things still mostly work out due to being collateralized with US treasuries).

So basically:
- Care about cut-off time? Maybe avoid group 1 & the earlier cutting off funds in group 3.
- Are you ok with re-purchase agreements outside of the tax consequences? If not, eliminate groups 2 & 4.
- Do you want pure treasuries? Use group 3 or 4. Otherwise consider groups 1 & 2 which are likely to have higher returns.
- Do you care about state taxes? You can adjust the various funds' yields to be post-tax and compare. Note that many of the not-fully-exempt funds will still have some state tax exempt income; you'd need to look at the composition of the holdings. Groups 1 & 3 should be fully or almost-fully state tax exempt (that pesky capital-gains on discount agency bonds issue may bring some state taxes for group 1).
Morik, thanks for your thorough thoughtful analysis. Very helpful!
bbrock
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by bbrock »

Thanks anon_investor and spammagnet for the ideas about this offer and the ways to navigate it

I have still yet to set up my ME account, preferred rewards, and Platinum Honors. I intend to do it and get a CCR and UCR. I thought about doing it for my wife as well (Roth IRA), but I may be cumbersome for her. She may just prefer using the Costco visa or just piggyback on to the credit cards I received and be an authorized cardholder.

I eventually will move a Roth IRA over, and then combining and moving savings from Ally to one of these MMF. Anon_investor I too like the pseudo-FDIC equivalent TTTXX. If you want ultimate safety, good enough yield, why not go for treasuries?

TTTXX (er 0.17%) = yielding 3.82% (not affected by the 9.33% CA taxes) - post tax 2.90%
MUCXX (er 0.20%) = pre/post tax 2.75%
Ally savings 3.3% = post tax 2.2%

Taxable equivalent yield (on MUCXX) = 4.12%

Looks like out of these choices that TTTXX may be the best, plus not affected by the 3 asterisk situation.
bbrock
spammagnet
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by spammagnet »

bbrock wrote: Fri Dec 23, 2022 12:43 pm... I thought about doing it for my wife as well (Roth IRA), but I may be cumbersome for her. She may just prefer using the Costco visa or just piggyback on to the credit cards I received and be an authorized cardholder. ...
(Pardon me if I'm repeating myself.) Depending on your cash flow, it may behoove you to open an account in her name, even if she's not actively involved. Set it up for online transactions, add it to Paypal, and pay online with Paypal whenever practical. The advantage is that each card has a $2,500/quarter limit at the higher reward rates. By using her card in that manner, you offload some of that space from your accounts onto hers, that otherwise would not be used. And, she doesn't have to deal with it.

If your spending does not reach the quarterly limits, it may not be useful. But, as an example, I had to buy a new evaporator coil for our heat pump today. $3,700 in a single transaction. I switched one of our inactive cards to home improvement before paying and immediately exceeded the quarterly limit. Fortunately, the repair shop does not distinguish between paying by check or credit card.
tlveik
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by tlveik »

Is there any forum like this one dedicated to Merrill Edge? I just opened an IRA there because that's where my 401k is (or was).
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by placeholder »

tlveik wrote: Fri Dec 23, 2022 8:42 pm Is there any forum like this one dedicated to Merrill Edge? I just opened an IRA there because that's where my 401k is (or was).
What's wrong with this one?
tlveik
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by tlveik »

placeholder wrote: Fri Dec 23, 2022 9:15 pm
tlveik wrote: Fri Dec 23, 2022 8:42 pm Is there any forum like this one dedicated to Merrill Edge? I just opened an IRA there because that's where my 401k is (or was).
What's wrong with this one?
Nothing. This forum is awesome, but potentially doesn't include posts from Edge users who haven't found this forum. Perhaps I've mistakenly thought this forum was primarily used by Vanguard investors.
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by placeholder »

tlveik wrote: Fri Dec 23, 2022 9:38 pm
placeholder wrote: Fri Dec 23, 2022 9:15 pm What's wrong with this one?
Nothing. This forum is awesome, but potentially doesn't include posts from Edge users who haven't found this forum. Perhaps I've mistakenly thought this forum was primarily used by Vanguard investors.
Largely vanguard fund users but as far as custodians it's pretty eclectic and I think even a smaller slice of this forum is going to be better than a merrill forum if such a thing even exists so I would suggest asking your questions.
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by GoodOmens »

Can you purchase Treasury Securities via Merrill Edge? Do they auto convert to funds like they do in my E-Trade account at maturity / can I sell them if I need to prior to maturity?

Looking to park our house down payment when we rent for a year in a new city. Figured a 4.x US treasury would be a good tax advantageous place to park it while also taking advantage of the sign up bonus / credit card boost.

Funds would be for another house so unsure if I could swing it to also getting the mortgage discount above 250k....
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by tj »

FWIW, I still haven't been warned by BofA that I've fallen below the required balance for Preferred Rewards (In fact I had transferred my entire Merrill Edge account over to Public almost 4 months ago). I'll probably move it back to Merrill from Public in March after the six month hold period is complete - hopefully receiving a promo bonus in the process!
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by pmindex »

GoodOmens wrote: Tue Dec 27, 2022 1:42 pm Can you purchase Treasury Securities via Merrill Edge? Do they auto convert to funds like they do in my E-Trade account at maturity / can I sell them if I need to prior to maturity?
Yes to all your questions.
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by GoodOmens »

pmindex wrote: Wed Dec 28, 2022 3:15 am
GoodOmens wrote: Tue Dec 27, 2022 1:42 pm Can you purchase Treasury Securities via Merrill Edge? Do they auto convert to funds like they do in my E-Trade account at maturity / can I sell them if I need to prior to maturity?
Yes to all your questions.
Thanks! Including auctions? Folks in this thread mentioned (back in Aug) treasury auctions can only done via broker assisted trades but it lists the ability to do auctions online in their pricing page. I'm assuming a new feature?
Morik
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by Morik »

I'll add a few more comments on other Merrill money market funds. See my post a little further up for my notes on the same-day settling funds (viewtopic.php?p=7021537#p7021537).

So all these funds in this post are next-day settling funds. I'm not exactly sure what the ramifications are on that in terms of interest (whether you give up one or more days of interest compared to investing in a same-day settling fund), but I have a separate post asking about that (viewtopic.php?t=393424).

Anyway, I didn't analyze all of the next-day settling funds, but here are the notes on the ones I did look at:

FFTXX -- probably best yield out of all the funds for anyone in federal tax bracket of 22%+ living outside of New York. Holds various state/municipal debt.
MUNXX -- best yield if you live in New York and are in the 22%+ federal bracket.

PVOXX/TMCXX -- highest raw yields, hold high quality short term corporate/bank debt. If your marginal federal tax rate is < 22%, these are likely the highest yield for you instead of the above federal tax exempt funds.

LEFXX -- if you prefer environmentally aware investments, this fund provides almost as high a yield as PVOXX/TMCXX but also considers some environmental criteria. I didn't dig into what their actual criteria are. This will cost just a few basis points--as of 12/28/2022, LEFXX yields 4.32%, vs 4.36% for PVOXX/TMCXX.
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by student »

GoodOmens wrote: Wed Dec 28, 2022 9:49 am
pmindex wrote: Wed Dec 28, 2022 3:15 am
GoodOmens wrote: Tue Dec 27, 2022 1:42 pm Can you purchase Treasury Securities via Merrill Edge? Do they auto convert to funds like they do in my E-Trade account at maturity / can I sell them if I need to prior to maturity?
Yes to all your questions.
Thanks! Including auctions? Folks in this thread mentioned (back in Aug) treasury auctions can only done via broker assisted trades but it lists the ability to do auctions online in their pricing page. I'm assuming a new feature?
ME does not offer the ability of auction online. We had a discussion earlier viewtopic.php?p=6971857#p6971857 and viewtopic.php?p=6974844#p6974844
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by anon_investor »

Morik wrote: Wed Dec 28, 2022 11:15 am I'll add a few more comments on other Merrill money market funds. See my post a little further up for my notes on the same-day settling funds (viewtopic.php?p=7021537#p7021537).

So all these funds in this post are next-day settling funds. I'm not exactly sure what the ramifications are on that in terms of interest (whether you give up one or more days of interest compared to investing in a same-day settling fund), but I have a separate post asking about that (viewtopic.php?t=393424).

Anyway, I didn't analyze all of the next-day settling funds, but here are the notes on the ones I did look at:

FFTXX -- probably best yield out of all the funds for anyone in federal tax bracket of 22%+ living outside of New York. Holds various state/municipal debt.
MUNXX -- best yield if you live in New York and are in the 22%+ federal bracket.

PVOXX/TMCXX -- highest raw yields, hold high quality short term corporate/bank debt. If your marginal federal tax rate is < 22%, these are likely the highest yield for you instead of the above federal tax exempt funds.

LEFXX -- if you prefer environmentally aware investments, this fund provides almost as high a yield as PVOXX/TMCXX but also considers some environmental criteria. I didn't dig into what their actual criteria are. This will cost just a few basis points--as of 12/28/2022, LEFXX yields 4.32%, vs 4.36% for PVOXX/TMCXX.
Don't all the fund you listed have floating NAV? Which means you can lose money on them.
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by pmindex »

GoodOmens wrote: Wed Dec 28, 2022 9:49 am
pmindex wrote: Wed Dec 28, 2022 3:15 am
GoodOmens wrote: Tue Dec 27, 2022 1:42 pm Can you purchase Treasury Securities via Merrill Edge? Do they auto convert to funds like they do in my E-Trade account at maturity / can I sell them if I need to prior to maturity?
Yes to all your questions.
Thanks! Including auctions? Folks in this thread mentioned (back in Aug) treasury auctions can only done via broker assisted trades but it lists the ability to do auctions online in their pricing page. I'm assuming a new feature?
Sorry, I don't know about auctions, I only buy on the secondary market (so I know for sure what I'm getting).
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by Morik »

anon_investor wrote: Wed Dec 28, 2022 1:14 pm
Morik wrote: Wed Dec 28, 2022 11:15 am I'll add a few more comments on other Merrill money market funds. See my post a little further up for my notes on the same-day settling funds (viewtopic.php?p=7021537#p7021537).

So all these funds in this post are next-day settling funds. I'm not exactly sure what the ramifications are on that in terms of interest (whether you give up one or more days of interest compared to investing in a same-day settling fund), but I have a separate post asking about that (viewtopic.php?t=393424).

Anyway, I didn't analyze all of the next-day settling funds, but here are the notes on the ones I did look at:

FFTXX -- probably best yield out of all the funds for anyone in federal tax bracket of 22%+ living outside of New York. Holds various state/municipal debt.
MUNXX -- best yield if you live in New York and are in the 22%+ federal bracket.

PVOXX/TMCXX -- highest raw yields, hold high quality short term corporate/bank debt. If your marginal federal tax rate is < 22%, these are likely the highest yield for you instead of the above federal tax exempt funds.

LEFXX -- if you prefer environmentally aware investments, this fund provides almost as high a yield as PVOXX/TMCXX but also considers some environmental criteria. I didn't dig into what their actual criteria are. This will cost just a few basis points--as of 12/28/2022, LEFXX yields 4.32%, vs 4.36% for PVOXX/TMCXX.
Don't all the fund you listed have floating NAV? Which means you can lose money on them.
There was a discussion about this either higher this page or maybe last page; apparently all of the funds can vary from $1, at least the institutional ones like Merrill provides access to.
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by bbrock »

Morik wrote: Wed Dec 28, 2022 4:34 pm
anon_investor wrote: Wed Dec 28, 2022 1:14 pm
Morik wrote: Wed Dec 28, 2022 11:15 am I'll add a few more comments on other Merrill money market funds. See my post a little further up for my notes on the same-day settling funds (viewtopic.php?p=7021537#p7021537).

So all these funds in this post are next-day settling funds. I'm not exactly sure what the ramifications are on that in terms of interest (whether you give up one or more days of interest compared to investing in a same-day settling fund), but I have a separate post asking about that (viewtopic.php?t=393424).

Anyway, I didn't analyze all of the next-day settling funds, but here are the notes on the ones I did look at:

FFTXX -- probably best yield out of all the funds for anyone in federal tax bracket of 22%+ living outside of New York. Holds various state/municipal debt.
MUNXX -- best yield if you live in New York and are in the 22%+ federal bracket.

PVOXX/TMCXX -- highest raw yields, hold high quality short term corporate/bank debt. If your marginal federal tax rate is < 22%, these are likely the highest yield for you instead of the above federal tax exempt funds.

LEFXX -- if you prefer environmentally aware investments, this fund provides almost as high a yield as PVOXX/TMCXX but also considers some environmental criteria. I didn't dig into what their actual criteria are. This will cost just a few basis points--as of 12/28/2022, LEFXX yields 4.32%, vs 4.36% for PVOXX/TMCXX.
Don't all the fund you listed have floating NAV? Which means you can lose money on them.
There was a discussion about this either higher this page or maybe last page; apparently all of the funds can vary from $1, at least the institutional ones like Merrill provides access to.
But, is there really a likely hood that a fund like TTTXX (Blackrock TLF Treasury Trust Fund Institutional) could vary from $1? I would imagine the risk of a treasury fund deviating from the dollar would be quite low.
bbrock
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by Eno Deb »

bbrock wrote: Wed Dec 28, 2022 8:23 pmBut, is there really a likely hood that a fund like TTTXX (Blackrock TLF Treasury Trust Fund Institutional) could vary from $1? I would imagine the risk of a treasury fund deviating from the dollar would be quite low.
TTTXX uses "floating NAV" pricing, meaning it is continually priced according to the assets it contains and the price constantly fluctuates. However, under normal circumstances the assets are managed in a way so that the fluctuations are only fractions of a cent. You can see this e.g. on Blackrock's web site under "historical NAVs":

https://www.blackrock.com/cash/en-us/products/282697/

On the other hand, retail MMFs with a fixed NAV use a different pricing method that "hides" the fluctuations. But there is no guarantee that in extreme circumstances the funds don't "break the buck".

All that said, to my knowledge no treasury MMF has ever broken the buck. It seems very unlikely. It's a different story with prime MMFs, where this has happened a few times in the past.
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by tj »

Eno Deb wrote: Wed Dec 28, 2022 8:42 pm
bbrock wrote: Wed Dec 28, 2022 8:23 pmBut, is there really a likely hood that a fund like TTTXX (Blackrock TLF Treasury Trust Fund Institutional) could vary from $1? I would imagine the risk of a treasury fund deviating from the dollar would be quite low.
TTTXX uses "floating NAV" pricing, meaning it is continually priced according to the assets it contains and the price constantly fluctuates. However, under normal circumstances the assets are managed in a way so that the fluctuations are only fractions of a cent. You can see this e.g. on Blackrock's web site under "historical NAVs":

https://www.blackrock.com/cash/en-us/products/282697/

On the other hand, retail MMFs with a fixed NAV use a different pricing method that "hides" the fluctuations. But there is no guarantee that in extreme circumstances the funds don't "break the buck".

All that said, to my knowledge no treasury MMF has ever broken the buck. It seems very unlikely. It's a different story with prime MMFs, where this has happened a few times in the past.
How much damage has happened with prime MMFs?
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by Eno Deb »

tj wrote: Wed Dec 28, 2022 8:45 pm
Eno Deb wrote: Wed Dec 28, 2022 8:42 pm
bbrock wrote: Wed Dec 28, 2022 8:23 pmBut, is there really a likely hood that a fund like TTTXX (Blackrock TLF Treasury Trust Fund Institutional) could vary from $1? I would imagine the risk of a treasury fund deviating from the dollar would be quite low.
TTTXX uses "floating NAV" pricing, meaning it is continually priced according to the assets it contains and the price constantly fluctuates. However, under normal circumstances the assets are managed in a way so that the fluctuations are only fractions of a cent. You can see this e.g. on Blackrock's web site under "historical NAVs":

https://www.blackrock.com/cash/en-us/products/282697/

On the other hand, retail MMFs with a fixed NAV use a different pricing method that "hides" the fluctuations. But there is no guarantee that in extreme circumstances the funds don't "break the buck".

All that said, to my knowledge no treasury MMF has ever broken the buck. It seems very unlikely. It's a different story with prime MMFs, where this has happened a few times in the past.
How much damage has happened with prime MMFs?
I remember that one GE fund had redemptions at $0.96 during the financial crisis. Not sure if that was the biggest loss.
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by bbrock »

Eno Deb wrote: Wed Dec 28, 2022 8:42 pm
bbrock wrote: Wed Dec 28, 2022 8:23 pmBut, is there really a likely hood that a fund like TTTXX (Blackrock TLF Treasury Trust Fund Institutional) could vary from $1? I would imagine the risk of a treasury fund deviating from the dollar would be quite low.
TTTXX uses "floating NAV" pricing, meaning it is continually priced according to the assets it contains and the price constantly fluctuates. However, under normal circumstances the assets are managed in a way so that the fluctuations are only fractions of a cent. You can see this e.g. on Blackrock's web site under "historical NAVs":

https://www.blackrock.com/cash/en-us/products/282697/

On the other hand, retail MMFs with a fixed NAV use a different pricing method that "hides" the fluctuations. But there is no guarantee that in extreme circumstances the funds don't "break the buck".

All that said, to my knowledge no treasury MMF has ever broken the buck. It seems very unlikely. It's a different story with prime MMFs, where this has happened a few times in the past.
Got it Eno Deb. Thx.
bbrock
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by spammagnet »

tj wrote: Tue Dec 27, 2022 4:11 pm FWIW, I still haven't been warned by BofA that I've fallen below the required balance for Preferred Rewards (In fact I had transferred my entire Merrill Edge account over to Public almost 4 months ago). I'll probably move it back to Merrill from Public in March after the six month hold period is complete - hopefully receiving a promo bonus in the process!
Read the fine print on the promo bonuses before you do. Withdrawals within the past XX weeks affect the net new money eligible for a bonus. It may behoove you to delay returning the money until past that time period.
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by anon_investor »

Eno Deb wrote: Wed Dec 28, 2022 8:42 pm
bbrock wrote: Wed Dec 28, 2022 8:23 pmBut, is there really a likely hood that a fund like TTTXX (Blackrock TLF Treasury Trust Fund Institutional) could vary from $1? I would imagine the risk of a treasury fund deviating from the dollar would be quite low.
TTTXX uses "floating NAV" pricing, meaning it is continually priced according to the assets it contains and the price constantly fluctuates. However, under normal circumstances the assets are managed in a way so that the fluctuations are only fractions of a cent. You can see this e.g. on Blackrock's web site under "historical NAVs":

https://www.blackrock.com/cash/en-us/products/282697/

On the other hand, retail MMFs with a fixed NAV use a different pricing method that "hides" the fluctuations. But there is no guarantee that in extreme circumstances the funds don't "break the buck".

All that said, to my knowledge no treasury MMF has ever broken the buck. It seems very unlikely. It's a different story with prime MMFs, where this has happened a few times in the past.
The NTF muni funds offered at ME do not have a fixed share price of $1, so. In theory if you put in $1k today and sell tomorrow you could lose money, whereas TTTXX has a fixed share price of $1 (unless it breaks the buck). So I think that is a big difference.
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by Eno Deb »

anon_investor wrote: Wed Dec 28, 2022 11:41 pmThe NTF muni funds offered at ME do not have a fixed share price of $1, so. In theory if you put in $1k today and sell tomorrow you could lose money, whereas TTTXX has a fixed share price of $1 (unless it breaks the buck). So I think that is a big difference.
TTTXX actually has a floating NAV (SEC requirement because it's considered an institutional fund).

It's important to realize that fixed vs. floating NAV is just a difference in pricing. The underlying assets fluctuate in both cases; in funds with fixed NAV you just don't see it (unless the buck is broken) because they use a different accounting method. In funds with floating NAV the fluctuations are usually fractions of a cent, so the broker's interface may not show them. The problems start when the market value of the underlying assets deviates too much from the fund's NAV.
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by Morik »

Eno Deb wrote: Thu Dec 29, 2022 11:00 am
anon_investor wrote: Wed Dec 28, 2022 11:41 pmThe NTF muni funds offered at ME do not have a fixed share price of $1, so. In theory if you put in $1k today and sell tomorrow you could lose money, whereas TTTXX has a fixed share price of $1 (unless it breaks the buck). So I think that is a big difference.
TTTXX actually has a floating NAV (SEC requirement because it's considered an institutional fund).

It's important to realize that fixed vs. floating NAV is just a difference in pricing. The underlying assets fluctuate in both cases; in funds with fixed NAV you just don't see it (unless the buck is broken) because they use a different accounting method. In funds with floating NAV the fluctuations are usually fractions of a cent, so the broker's interface may not show them. The problems start when the market value of the underlying assets deviates too much from the fund's NAV.
So the vast majority of the funds offered at Merrill Edge are institutional share class, which means they all have floating NAV, right?

The only ones I see that aren't marked institutional:
BFRXX, BTFXX (require a trust/retirement cash management account)
BUPXX, BEMXX, GOFXX, GOVXX (require enrollment in investment advisory program)
FIGXX, FISXX, FSIXX -- these appear to be available with no additional restrictions.

So without enrolling in investment advisory program or having special account types (trust or retirement cash management account), it sounds like the only potentially fixed-NAV options are those 3 from Fidelity?

The language from Fidelity on these has " Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so."
Looking at the market value history graphs:

Image

Image
Image

It appears the NAV isn't actually fixed for any of these.

Is it correct then to state that NONE of the Merrill Edge offerings available outside of special account types/management services have a fixed NAV?
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by Eno Deb »

Morik wrote: Thu Dec 29, 2022 12:11 pmSo the vast majority of the funds offered at Merrill Edge are institutional share class, which means they all have floating NAV, right?

The only ones I see that aren't marked institutional:
BFRXX, BTFXX (require a trust/retirement cash management account)
BUPXX, BEMXX, GOFXX, GOVXX (require enrollment in investment advisory program)
FIGXX, FISXX, FSIXX -- these appear to be available with no additional restrictions.
I believe the main criterium for a fund to be considered institutional is the minimum investment. All three of the Fidelity funds have a $1MM minimum, so they should be considered institutional and thus have a floating NAV. Don't know about the other ones. It's just that Merrill Edge allows customers to buy the funds even with a smaller investment (they probably buy the shares in bulk).
Last edited by Eno Deb on Thu Dec 29, 2022 12:45 pm, edited 1 time in total.
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by anon_investor »

Eno Deb wrote: Thu Dec 29, 2022 11:00 am
anon_investor wrote: Wed Dec 28, 2022 11:41 pmThe NTF muni funds offered at ME do not have a fixed share price of $1, so. In theory if you put in $1k today and sell tomorrow you could lose money, whereas TTTXX has a fixed share price of $1 (unless it breaks the buck). So I think that is a big difference.
TTTXX actually has a floating NAV (SEC requirement because it's considered an institutional fund).

It's important to realize that fixed vs. floating NAV is just a difference in pricing. The underlying assets fluctuate in both cases; in funds with fixed NAV you just don't see it (unless the buck is broken) because they use a different accounting method. In funds with floating NAV the fluctuations are usually fractions of a cent, so the broker's interface may not show them. The problems start when the market value of the underlying assets deviates too much from the fund's NAV.
I understand the floating NAV, but the fund manager still attempts to maintain a $1 share price. The NTF muni funds available at ME don't even try to maintain a $1 share price.
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by Eno Deb »

anon_investor wrote: Thu Dec 29, 2022 12:44 pmI understand the floating NAV, but the fund manager still attempts to maintain a $1 share price. The NTF muni funds available at ME don't even try to maintain a $1 share price.
What muni funds are you referring to? I just checked MCSXX and it's fluctuating around $1 by fractions of a cent just like the others.
Last edited by Eno Deb on Thu Dec 29, 2022 12:48 pm, edited 1 time in total.
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by tj »

Eno Deb wrote: Thu Dec 29, 2022 12:42 pm
Morik wrote: Thu Dec 29, 2022 12:11 pmSo the vast majority of the funds offered at Merrill Edge are institutional share class, which means they all have floating NAV, right?

The only ones I see that aren't marked institutional:
BFRXX, BTFXX (require a trust/retirement cash management account)
BUPXX, BEMXX, GOFXX, GOVXX (require enrollment in investment advisory program)
FIGXX, FISXX, FSIXX -- these appear to be available with no additional restrictions.
I believe the main criterium for a fund to be considered institutional is the minimum investment. All three of the Fidelity funds have a $1MM minimum, so they should be considered institutional and thus have a floating NAV. Don't know about the other ones. It's just that Merrill Edge allows customers to buy the funds even with a smaller investment (they probably buy the shares in bulk).

I'm now sure why institutional class would correlate with the NAV being floating or not. Aren't those separate issues?
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by Eno Deb »

tj wrote: Thu Dec 29, 2022 12:47 pmI'm now sure why institutional class would correlate with the NAV being floating or not. Aren't those separate issues?
The SEC requires that institutional MMFs must have a floating NAV (this regulation was introduced a few years after the financial crisis). Retail funds are not subject to this requirement.
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by anon_investor »

Eno Deb wrote: Thu Dec 29, 2022 12:47 pm
anon_investor wrote: Thu Dec 29, 2022 12:44 pmI understand the floating NAV, but the fund manager still attempts to maintain a $1 share price. The NTF muni funds available at ME don't even try to maintain a $1 share price.
What muni funds are you referring to? I just checked MCSXX and it's fluctuating around $1 by fractions of a cent just like the others.
The ME sheet that list NTF MMFs highlights them as not trying to maintain a $1 share price. Is that not true?
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by Eno Deb »

anon_investor wrote: Thu Dec 29, 2022 12:51 pm
Eno Deb wrote: Thu Dec 29, 2022 12:47 pm
anon_investor wrote: Thu Dec 29, 2022 12:44 pmI understand the floating NAV, but the fund manager still attempts to maintain a $1 share price. The NTF muni funds available at ME don't even try to maintain a $1 share price.
What muni funds are you referring to? I just checked MCSXX and it's fluctuating around $1 by fractions of a cent just like the others.
The ME sheet that list NTF MMFs highlights them as not trying to maintain a $1 share price. Is that not true?
Where do you see that? They clearly do try to stay close to $1 (by fractions of a cent).
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by Morik »

Eno Deb wrote: Thu Dec 29, 2022 12:53 pm
anon_investor wrote: Thu Dec 29, 2022 12:51 pm
Eno Deb wrote: Thu Dec 29, 2022 12:47 pm
anon_investor wrote: Thu Dec 29, 2022 12:44 pmI understand the floating NAV, but the fund manager still attempts to maintain a $1 share price. The NTF muni funds available at ME don't even try to maintain a $1 share price.
What muni funds are you referring to? I just checked MCSXX and it's fluctuating around $1 by fractions of a cent just like the others.
The ME sheet that list NTF MMFs highlights them as not trying to maintain a $1 share price. Is that not true?
Where do you see that? They clearly do try to stay close to $1 (by fractions of a cent).
I think he is talking about the 2-asterisk vs 3-asterisk language (also discussed a few pages ago), I'll re-paste it here:
**You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Fund’s sponsor has no legal obligation to provide financial support to the Fund, and you should not expect that the sponsor will provide financial support to the Fund at any time.

***You could lose money by investing in the Fund. Because the share price of the Fund will fluctuate, when you sell your shares they may be worth more or less than what you originally paid for them. The Fund may impose a fee upon sale of your shares or may temporarily suspend your ability to sell shares if the Fund’s liquidity falls below required minimums because of market conditions or other factors. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Fund’s sponsor has no legal obligation to provide financial support to the Fund, and you should not expect that the sponsor will provide financial support to the Fund at any time.
3-asterisk funds: LEFXX, TMCXX, PVOXX, MCSXX, MUCXX, MUNXX, FFTXX, FTFXX
(Basically--the prime value/hold non-government debt funds, and the municipal federal tax exempt funds.)

All the others are 2-asterisk.
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anon_investor
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by anon_investor »

Morik wrote: Thu Dec 29, 2022 12:58 pm
Eno Deb wrote: Thu Dec 29, 2022 12:53 pm
anon_investor wrote: Thu Dec 29, 2022 12:51 pm
Eno Deb wrote: Thu Dec 29, 2022 12:47 pm
anon_investor wrote: Thu Dec 29, 2022 12:44 pmI understand the floating NAV, but the fund manager still attempts to maintain a $1 share price. The NTF muni funds available at ME don't even try to maintain a $1 share price.
What muni funds are you referring to? I just checked MCSXX and it's fluctuating around $1 by fractions of a cent just like the others.
The ME sheet that list NTF MMFs highlights them as not trying to maintain a $1 share price. Is that not true?
Where do you see that? They clearly do try to stay close to $1 (by fractions of a cent).
I think he is talking about the 2-asterisk vs 3-asterisk language (also discussed a few pages ago), I'll re-paste it here:
**You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Fund’s sponsor has no legal obligation to provide financial support to the Fund, and you should not expect that the sponsor will provide financial support to the Fund at any time.

***You could lose money by investing in the Fund. Because the share price of the Fund will fluctuate, when you sell your shares they may be worth more or less than what you originally paid for them. The Fund may impose a fee upon sale of your shares or may temporarily suspend your ability to sell shares if the Fund’s liquidity falls below required minimums because of market conditions or other factors. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Fund’s sponsor has no legal obligation to provide financial support to the Fund, and you should not expect that the sponsor will provide financial support to the Fund at any time.
3-asterisk funds: LEFXX, TMCXX, PVOXX, MCSXX, MUCXX, MUNXX, FFTXX, FTFXX
(Basically--the prime value/hold non-government debt funds, and the municipal federal tax exempt funds.)

All the others are 2-asterisk.
Thank you, that is what I was referrencing.
Eno Deb
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by Eno Deb »

Morik wrote: Thu Dec 29, 2022 12:58 pmI think he is talking about the 2-asterisk vs 3-asterisk language (also discussed a few pages ago), I'll re-paste it here:
**You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Fund’s sponsor has no legal obligation to provide financial support to the Fund, and you should not expect that the sponsor will provide financial support to the Fund at any time.

***You could lose money by investing in the Fund. Because the share price of the Fund will fluctuate, when you sell your shares they may be worth more or less than what you originally paid for them. The Fund may impose a fee upon sale of your shares or may temporarily suspend your ability to sell shares if the Fund’s liquidity falls below required minimums because of market conditions or other factors. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Fund’s sponsor has no legal obligation to provide financial support to the Fund, and you should not expect that the sponsor will provide financial support to the Fund at any time.
3-asterisk funds: LEFXX, TMCXX, PVOXX, MCSXX, MUCXX, MUNXX, FFTXX, FTFXX
(Basically--the prime value/hold non-government debt funds, and the municipal federal tax exempt funds.)

All the others are 2-asterisk.
Ah, OK. What confuses me about that language is that it seems to imply that two-star funds like e.g. FSIXX are classified as fixed NAV when they clearly aren't (see the charts posted by Morik above).
tj
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by tj »

spammagnet wrote: Wed Dec 28, 2022 11:25 pm
tj wrote: Tue Dec 27, 2022 4:11 pm FWIW, I still haven't been warned by BofA that I've fallen below the required balance for Preferred Rewards (In fact I had transferred my entire Merrill Edge account over to Public almost 4 months ago). I'll probably move it back to Merrill from Public in March after the six month hold period is complete - hopefully receiving a promo bonus in the process!
Read the fine print on the promo bonuses before you do. Withdrawals within the past XX weeks affect the net new money eligible for a bonus. It may behoove you to delay returning the money until past that time period.
I spoke too soon - they sent me the letter and I have until February 28 2023 to bring a 3 month combined balance of $100k to BofA/Merrill. That's not going to happen as my 6 month hold with public won't be up until some time in March so I'll lose out on a month of some CC rewards and pay $5 on the checking account. Oh well. Or, I might just pivot from the BofA/ME system altogether.
spammagnet
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Re: Bank of America/Merrill Edge - Preferred Rewards

Post by spammagnet »

tj wrote: Thu Dec 29, 2022 1:15 pm
spammagnet wrote: Wed Dec 28, 2022 11:25 pmRead the fine print on the promo bonuses before you do. Withdrawals within the past XX weeks affect the net new money eligible for a bonus. It may behoove you to delay returning the money until past that time period.
... Or, I might just pivot from the BofA/ME system altogether.
That's a math problem.

If you lose PH status it takes time to get back to the $100K 3-month moving average. Of course, if you're moving $1,000,000 around, it takes less time, since it's an average. It takes at least a month regardless of the amount because they evaluate qualification only monthly. Once you qualify, you're good for another year.

So, considering what you might lose (or only delay a bit) by not moving your assets immediately to another new account bonus, does that exceed a year's worth of BA rewards, compared to the alternative kickbacks you might have access to already?

I did all that. I got dropped from PH status because my assets were temporarily elsewhere and I couldn't get them back in time for the anniversary. After I did, it took 3 months to regain status. I subsequently moved them to a different elsewhere, for a different bonus. For my level of assets and spending and the bonus opportunities available elsewhere at the time, the BA/ME system was worth maintaining, and still is.

Off topic: I'm starting to shift some spending to Chase because we can transfer UR points 1:1 to hotels. We recently exhausted all of our hotel points and are shocked by the cost of hotel rooms. We can't use our 100K SW points because we can't afford don't want to pay cash for the hotels when we get there. A particular Hyatt Place we like is remarkably cheap in points, compared to cash, so it's worth it to us to divert some spending to a Sapphire card for that purpose.
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