Bank of America’s Merrill Lynch unit will pay $39 million to settle a class-action lawsuit alleging it paid near-zero interest on idle cash in customers’ retirement accounts rather than market rates. Settlement papers were filed late Wednesday in Manhattan federal court and require approval from US District Judge Valerie Caproni, avoiding a trial scheduled for mid-October. The case covers holders of Merrill Edge online accounts from December 15, 2016, through March 15, 2020. Customers alleged Merrill breached its agreements by automatically sweeping cash into deposit accounts that paid less than a reasonable rate of interest. The complaint said those sweep accounts yielded 0.05% to 0.14% annually, compared with about 2% at other brokerages. Merrill Lynch denied wrongdoing in agreeing to settle, while a Bank of America spokesperson declined to comment. Lawyers for the customers did not immediately respond to requests for comment. Similar lawsuits against banks and brokerages increased in 2023 and 2024 as customers argued that cash sweep yields failed to keep pace with rising interest rates. The cases have produced mixed results: in February, another Manhattan federal judge ruled that JPMorgan Chase must face part of a comparable lawsuit, while on September 18, a third Manhattan federal judge granted final approval to a $70 million settlement with Oppenheimer & Co.