Bank of America's (BAC) Merrill Lynch unit agreed to pay $39 million to resolve claims that it left retirement account customers earning extremely low interest on cash holdings, Reuters reported Wednesday, citing court filings.

The settlement, which still needs approval from a federal judge in Manhattan, addresses allegations that Merrill swept client cash into deposit accounts paying well below rates offered by rival brokerages, the report said.

The lawsuit alleged that these deposit accounts paid annual yields of 0.05% to 0.14%, while other brokerages were offering rates of about 2%, Reuters said.

Merrill has denied wrongdoing in agreeing to the settlement, the report said.

Bank of America's designated media contact for Merrill did not immediately respond to MT Newswires' request for comment.

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