All you need is 1000 million dollars!
CIBC Investor’s edge has done much to keep up with their big bank peers to stay relevant as a discount stock broker in Canada. This review will explain why we think they are a decent choice, but also why we think most investors would be better going with a different broker. Continue reading “CIBC Investor’s Edge Review”
TD Direct Investing is another offering from the big banks for self directed investors in Canada. In this review, we will compare TD to some of the other big banks and some of the independent discount brokers, and try to let you know why we think it’s a somewhat inadequate choice by comparison. Formerly known as TD Waterhouse Discount Brokerage, TD Direct Investing has some big positives, they have a wealth of resources to teach new investors how to trade and their trading platforms are many and varied. However, we feel that they lag behind some of their big bank peers in innovation and interface.
Opening a new account is fairly easy, as it is for most brokerages in 2017.
TDs fees are similar to the other banks for carrying a trading account and in terms of commissions.
They offer many of the same features offered by other brokerages that we’ve come to accept as industry standards.
However, there are a number of services that are lacking:
The last few points lead us to our main complaint about TD. They don’t really offer anything you can’t find elsewhere, they lag behind in multiple categories and they don’t seem to really be innovating. They more appear to be constantly playing catch-up with their peers. So they’re not a very exciting broker to have an account with (or to review for that matter)
TD is a decent broker, but why choose decent when there are many good or excellent stock brokers in Canada? Par or sub-par in many respects, we recommend most of the other Big Bank brokers over TD. And we recommend several discount brokers, like Questrade, over the big banks.
Our RBC Direct Investing, formerly known as Royal Bank Action Direct, review will show you that RBC is a decent broker and leads the way among big banks in fee innovation. They offer some interesting an unique features – such as a community section that allows users to communicate
By all accounts signing up is relatively painless and there is zero minimum to open an account.
Their commission fees are comparable to other bank brokerages, but you should note that RBC has led the way among bank brokerages. They were the first to substantially lower their commission rates and the other brokerages followed suit. This furthers our firm belief that competition between the various brokers in Canada is very beneficial to investors.
The number and quality of features offered by RBC Direct Investing range between standard and subpar.
Types of Accounts
Other Info
RBC has led the way among the big banks by lowering fees, but lags behind in their trading interface as well. If you want a big 5 Bank broker, they might be a decent choice, but not our #1 recommendation
Updated: Feb 2017
Virtual Brokers is one of the best discount brokers in Canada for most users. This review will show that it is fairly low cost, feature rich and well suited for most investors and a very nice option for active traders.
By all accounts, signing up for Virtual Brokers is fairly fast and relatively painless. You only need $1000 to open an account, but $5000 if you want to qualify for their commission free plan.
Understanding Virtual Brokers fees now requires you to understand the fee structure for their two different account types. Standard and Commission Free Accounts.
Standard Accounts have the following Fees
Commission Free accounts charge $0 per stock trade. This sounds like a no-brainer, but additional fees make it attractive only to very active investors.
So while the commission free plan may not have commissions on trades, you will still pay at least $150 USD per month. So, this plan might make sense for very active traders, but you would need to make dozens of trades every month to be saving money on commissions
For the average investor, Virtual Brokers is a decent, low cost brokerage. They offer free ETFs, and many other features. However, their commission fees are not the lowest in Canada unless you are a very active investor. In this case, you can make unlimited trades for at least roughly $150 USD per month. Virtual Brokers is a great broker, but has a few failings that prevent it from being near perfect.
We feel that, while BMO InvestorLine is not the best online discount brokerage in Canada, they are the best of the big 5 bank brokerages. As always, keep in mind in this review that your investment goals and needs are quite idiosyncratic and your best broker might differ from someone else’s.
Opening an account is easy to do and BMO has made it even easier in recent years. You can choose between two services
The best of the big bank brokers with great research tools, low-simple costs, a robo trader ETF, but lacking many of the features that non-big bank brokers offer like commission free ETF trading.
Interactive Brokers Canada is the Canadian version of a very popular American discount brokerage. The author has used Interactive Brokers since 2007 and has been quite happy with them, but as we will explain in this review – we feel they are the best choice for some Canadians and definitely not others. It depends on how much you have to invest and your investment strategy. Also, IB Canada was good back in 2007 and they’ve done a lot to become even better in recent years.
The sign up process is much more annoying than some other Canadian brokers, but if Interactive Brokers meets your unique investment needs, it will be well worth it. Generally, even if Interactive Brokers works for you, you will also need to have another broker for certain trades unless you don’t mind paying enormous fees.
Interactive Brokers trading commission structure is strange and somewhat more complicated than other brokers. But it can be the lowest commission of all brokers by far for certain people. Allow us to explain:
Many trades with Interactive brokers have a commission of only $1 USD. Which is far lower than any other broker in Canada. If you are buying or selling up to 200 shares of any stock or ETF, you pay just $1 per trade. This is staggering low cost. However, every share above 200 traded is priced at 0.5 cents per share with a maximum commission of 0.5% of the trade. So, if you are trading in very large volume with very low priced shares, you might pay considerably more than brokers with a flat-rate commission. So, imagine you’re buying 200,000 shares priced at $1 USD. Your commission would be a whopping $1000 USD! This fee structure is baffling at times, but it can be worth it for many traders.
$10 monthly fee for accounts with less than $100,000 USD. This also includes $10 in free montly trades, so this fee is nonexistent if you frequently trade
The trading platform is great and has many many features. It is a bit complex and hard to learn, but very full featured. Their website leaves much to be desired. It can be confusing and very frustrating to use.
Interactive Brokers is a great broker for certain trades and for day traders who trade shares with a high price. It’s terrible, due to the fee structure, for trading penny stocks. Everything else is quite good except their website. For some people the review should be A+ and for others it would be a D. It really depends on your situation
Scotia i-Trade is one of the online brokerages that is wholly owned by the big banks. It is a very good brokerage for higher net worth individuals, but not so great for investors with small sums of money to invest due to fees. So, if you’re looking for discount broker, look elsewhere (see our reviews), but if you have a balance to invest in the high $100s of thousands, Scotia might still be a good broker for you
Signing up is fairly painless, but it is apparently more difficult than signing up for some of the newer kids on the block – like Questrade or Qtrade.
Fees are much higher for people who carry a relatively small balance and much lower for more active traders with a high net worth. If you have a balance of less than $50,000 across all trading accounts, you will pay a trading commission of $25 per trade. This was not uncommon 10 years ago to pay commissions this high at ‘discount’ online brokerages, but today Scotia is one of the very few brokers that still have fees this high.
If you have more than $50,000 in your iTrade accounts, you will pay commission of $9.99 per trade. This commission also applies if you’re an active trader and you trade over 30 times per quarter. If you are a very active trader and you trade more than 150 times per quarter, you will get their best commission rate and trade at $4.99 per order.
Scotia iTrade has some positive qualities. If you’re looking for broker that is associated with a big bank and you have a decent balance across all trading accounts, then Scotia might be for you. But we would recommend a BMO or RBC over Scotia. If you’re not dead set on big bank broker, have a look at Questrade (our review) or Qtrade
Qtrade, not to be confused with Questrade, is a very good Canadian Stock Broker. It’s not quite as good as Questrade, which if you read our review, you will find is almost a perfect broker for most Canadians, but it comes very close! On to our review:
Signing up for Qtrade is quite easy and fast. And their fees are quite low. It’s a great brokerage for low net worth individuals, especially if you are young (under 30). You require a Minimum Balance of $1000 CAD to open an account.
For individuals under 30, they offer trades for $7.75 commission and you do not need to carry a minimum balance in your account. You just need to add a minimum of $50 per month to your account. This is a great way for young people who are interested in self directed investing to get started.
By all accounts customer service is good. With fast response times and helpful staff, we haven’t encountered any serious complaints from the half-dozen or so Qtrade clients we’ve consulted.
Qtrade would be a nearly perfect Canadian broker if their fees weren’t a bit higher than the competition.
The best online brokerage for day trading stocks in Canada depends on your needs as a day trader. That being said, we have found that Questrade is the best overall broker in Canada (read our full review) and is also the best broker for many day traders. It depends on your situation. We shall try to explain.
Day traders make their money (or lose it) by engaging in high-frequency trading and exploiting often tiny fluctuations in the markets. They hold purchased stocks for very short periods of time and very seldom hold any stocks overnight. So, one of the great enemies to their bottom line is overhead. Brokerage commission fees can really hurt a day trader’s bottom line.
Depending on what sort of stocks you are trading, commission fees can be mitigated by using certain brokerages. If you are trading stocks with a high purchase price in relatively low volume, Interactive Brokers is a great choice for your day trading. They have a minimum commission of $1 per trade @ $0.005 per share and a maximum commission of 0.5% of the trade. So, if you’re trading a stock with an expensive purchase price in smaller quantities, you can save a bundle. For example: if you buy 202 shares of a stock that costs $495 per share (total transaction price $100,000), you will only spend $1.01 on commissions. However, if you purchase 100,000 shares of a stock that costs $1 per share (total transaction price is again $100,000), you will pay $500!
If your fees will be higher with Interactive brokers, you should choose a broker that have a cap on commissions, like Questrade. Questrade charges 1 cent per share with a maximum commission of $9.95 and a minimum of $4.95, so if you’re buying 100,000 shares at $1 each, you will only pay $9.95 for the trade.
So, what’s the commission solution? When I was dabbling in high frequency trading, I had an account at both Questrade and Interactive Brokers. I used Questrade to reduce commissions that would be higher at IB and vice versa.
Both Questrade and IB have a plethora of options available in this department. Interactive Brokers has a definite edge if you are planning on trading equities in markets outside of Canada or the United States, but their fees are also generally higher. Questrade is generally the lower cost option in our experience.
In our view, Questrade is the best Online Brokerage firm in Canada for most Canadians. In some situations it might be better to choose a different broker, but for 90% of Canadians it is the best choice.
Skip the Review and visit Questrade to sign up
I have been using this broker for nearly 10 years and I have always been happy with their services, but lately I have been happier than ever before. I currently have a margin account, my RRSPs and a Tax Free Trading Account (TFSA). I currently carry a large USD balance and I make adjustments to my portfolio fairly frequently (though not as often as I used to).
Setup
Questrade has the simplest sign-up process for any online brokerage in Canada. It took me less than an hour when I helped a friend setup an account recently. You only require $1000 to open an account, so Questrade is very accessible to extremely low net worth individuals
Pricing, Fees and Commissions.
Questrade has almost no reccuring fees in most situations and their commissions are quite low. If you have a balance of $5000 CAD or more spread across all accounts, there is no annual or other fee for having an account. If your balance is less than $5,000, you will pay a $20/quarter fee ($80 per annum).
Stock commissions range from $4.95 for most trades to a maximum of $9.95. It’s based on the number of stocks involved in the trade. The price is $4.95 if you’re trading 495 shares or less. Every share over 495 costs one cent extra to trade to a maximum of $9.95. Commissions on options are priced at $6.95 per trade plus 75 cents per contract traded. You can purchase ETFs with no commission at all! This is a great feature that most brokerages do not offer.
Types of Accounts & Account Features
Questrade offers a wide array of account types. As mentioned earlier, you can open a TFSA, RRSPs and Margin accounts as well as accounts for FOREX. All accounts allow USD balances with no extra fees so you can trade securities & options traded on the American exchanges with ease.
Questrade also offers a Robo trading ETF for hands-off investors that might be of interest to some investors. This author is very hands on with his investments, so it’s not of much interest, but for some this is a great innovation that many other Canadian brokerages do not offer.
A new feature as of 2016 that Questrade has for offer is their IPO market. It allows small investors access to IPOs (Initial Public Offerings). This is an interesting innovation from Questrade, but it is unfortunately limited only to the relatively small Canadian IPO market. But, to the best of our knowledge, no other Canadian broker offers such a feature, so this is yet another interesting way that Questrade is trying to innovate.
Trading Platform
Questrade offers several different trading platforms and market data packages that will satisfy investors with just about any needs.
Their default and free trading platform, IQ Web, works great for nearly any investor. It’s simple yet powerful, it’s sleek and streamlined and it’s very easy to use. For professional investors or investors who need more market data and more advanced research tools, there is IQ Elite. This is a step up, but as I’ve written, most investors will have 100% of their needs met with the basic free service.
A Questrade account is extremely easy to set up, accessible to small investors, has a slick and easy to use interface. You can’t go wrong!