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Canadian Online Discount Stock Brokerage Comparison 2016

Notice: Although this Canadian online stock brokerage review/comparison is dated back to Dec 2006, the information below is updated regularly.

Are stock trading commissions eating away at your profits (or increasing your losses)? Ticked off at paying at least $29/trade at one of the big bank discount brokerages? Well there are some new players in town! They are MUCH cheaper and offer similar features. Who are we talking about? From my research, there are a number major (cheap) discount brokerages in Canada that are worth mentioning which include: E-Trade (now i-trade), Virtual Brokers, Qtrade, Interactive Brokers, and Questrade (voted #1 by Million Dollar Journey Readers).

As an update and side note, almost all discount brokerages are very competitive with low trading fees (under $10/trade).  In addition to trading fees, keep an eye on annual maintenance fees if you are below the minimum balance, and especially foreign exchange fees.  Most discount brokers will hide the fee in the exchanged amount.

Lets do a little table comparing all the features (last update January 4, 2015):

Broker RRSP / TFSA Mutual Funds USD RRSP Commission Comm Free ETFs Fees DRIP
Scotia i-Trade (formerly e-trade) Yes/ Yes Yes No (offer reduced FX rates) $24.99 or $9.99 /trade with $50k in assets or 30+ trades /quarter, $4.99/trade with 150+ trades /quarter Yes (select group) $25/ quarter for low activity. $0 if balance > $25k, $30/ quarter for US friendly RRSP. Yes
IB Yes/ Yes No Yes Min $1 /USD trade. Max 0.5% of trade value ($0.005/ share)Min $1/CAD trade. Max 0.5% of trade value ($0.01 / share) No $10 USD/ mo (only if you don’t trade $10 worth of commissions/mo, waived if $100k USD balance), $50/year annual RRSP fee.  Min $10k to open an account. No
Questrade Yes/ Yes Yes Yes $4.95 for up to 495 shares ($9.95 max), $9.95 per mutual fund trade. ETFs are free to buy, reg commission to sell. Yes (only when buying, selling is regular comm) $0, but $19.95/ quarter if balance < $5k Yes
BMO Investor Line Yes/ Yes Yes Yes $9.95/ trade no minimum balance No $100 / yr if less than $25k balance Yes
RBC Direct Investing Yes/ Yes Yes Yes $9.95/ trade no minimum balance, $6.95/ trade if 150+ trades / quarter No $25 / quarter if less than $15k balance Yes
CIBC Investors Edge Yes/ Yes Yes No (offer FX at spot rate within RRSP and TFSA) $6.95/ trade no minimum balance No $125 / yr if under $25k balance Yes
Credential Direct Yes/ Yes Yes No $8.88 / trade No None ?
TD Direct Investing Yes/ Yes Yes Yes $9.99/ trade no minimum balance, $7/ trade if 150+ trades / quarter. No $100 / yr if under $25k balance Yes
QTrade Yes/ Yes Yes Yes $8.75/ trade or $6.95/ trade if assets > $500k Yes (select group) $100/ yr admin fee if under $25k balance, $60/ yr for USD RRSP Yes
Virtual Brokers Yes/ Yes Yes Yes Three options; 1) $0.01/share with cap of $9.99. 2) ETFs are free to buy, $0.01/share to sell min of $0.99/trade. 3) $6.49/ trade + ECN fees Yes (only when buying, selling is regular comm) $50/ yr if under $15k balance, $50/ yr for USD RRSP  Yes*

Due to popular demand, below is the foreign exchange fee/spread charged by each of the brokerages to convert your CAD->foreign currency.

Brokerage Forex Fee/Spread (each way)
E-Trade 1.5% (not confirmed)
IB 0.01% + 2.50USD
Questrade 1.99%
BMO 0.90%
TDW 1.40%
BNS ~1%
CIBC 0.01% (approximately spot rate within RRSP/ TFSA)
RY ~1%
Qtrade 1.75% for < $10k, 1.60% for > $10k but < $25k
Virtual Brokers 0.75%

As you can see from the charts, there is no perfect brokerage that would suit everyone. However, there are some general guidelines:

  • If you are looking for a USD RRSP, for larger accounts (>$50k), I like RBC Direct Investing for USD RRSPs.  With a larger balance they offer relatively low trading commissions, no fees, and automatic journaling of shares (for the DLR/DLR.U trick) .  For smaller accounts, Questrade offers the best product.  With a small balance (greater than $5k), they offer no fees, ultra low commissions, commission free ETFs, and journaling of shares via online chat. Here is my Questrade Review that I’ve written.
  • If you want to keep everything in CAD, CIBC Investors Edge now charges very close to spot rate when buying USD stocks (but maintained in CAD).  This simply means that you don’t need to mess around with journaling etc to save money when converting CAD to USD.
  • For long term index investors who use ETFs only, then Questrade likely offers the best overall product.  No commission on buying ETFs, and a no fee USD RRSP for US based ETFs.
  • If you are looking for an RRSP account to invest in mutual funds, then you have 3 options, big bank, E-Trade, or Questrade (additional fee applies).
  • If you’re looking for an RRSP account (with little interest in mutual funds) that has no fees, low minimum deposit, low commissions and you trade less than 790 shares at a time and LESS THAN 50 trades/year, then Questrade is your best bet.
  • If you’re looking for an RRSP account but with a larger balance and typically trade greater than 790 shares at a time and MORE THAN 50 trades/year, then CIBC Investors Edge is best.
  • If you’re looking for a non-registered trading account with ridiculously low commissions and margin interest, then Interactive Brokers is a no brainer. There is a $10USD / month minimum fee with IB which means that if you spend less than $10USD in commissions in a month, they will charge the difference to your account. For example, if you spend $6 USD (6 USD trades) in commissions in a month, they will charge you an extra $4 USD. These monthly fees are tax deductible. IB also offers extremely cheap currency exchange. The biggest downside of IB is that you have to pay for your real time data. I use IB for my trading and my big bank brokerage for my real time quotes.
  • There is one feature that I like a lot about big bank brokerages and that is FREE dividend re-investments (DRIP). For example, if you buy enough shares of CIBC to pay you $100 in dividends / quarter (enough for 1 share), you can set it up so that your brokerage will automatically purchase more shares of the same company with the dividend payout.

I personally use a big bank for my RRSP and Interactive brokers for my non-registered trading account. I’m sticking with my big bank for now because of the free DRIP. Update Jan 10/07: E-Trade AND Questrade now offer free DRIP!

There you have it! A simple review of some of the discount brokerage options out there. I believe that it’s only a matter of time before the big bank brokerages start reducing their fees. In the mean time, look at your personal situation and see if any of the companies listed in my review suit you. You can potentially save a substantial amount of money.

If you are interested in stock trading, here are some free online stock trading tools that I have used and recommend.

Update Nov 2013: Lately, I’ve been more focused on reducing my forex charges which can add up over time.  This is especially the case when buying US stocks within a Canadian based RRSP.  To save on these fees, I wrote an article rating the top discount brokers that offer USD RRSPs.  For ETF index investors, a discount broker that offers commission free ETFs is a way to reduce trading fees when rebalancing and/or adding to the account.  Here is a review of discount brokers that offer commission free ETFs.

Update Feb 15/07: As you can see, I’ve added CIBC to the chart. With their new commission structure, you get 50 trades for $395/year. This works out to be around $7.90/trade with no limit to the number of shares you can buy. After the 50 trades are up, it gets even cheaper, $6.95/trade. What I REALLY like about this structure is that you can purchase the same stock as MANY times as you like during the day, and you’ll only be charged for 1 trade. The same applies for selling, you can sell the same stock as many times as you want during the day and be charged for only 1 trade. This still may not be the lowest cost solution for the small time investor, but once you start making bigger trades, CIBC has the lowest trading fee of all brokerages in Canada.. I commend CIBC for taking the initiative that the other big banks have not taken, that is to reduce trading fees for Canadians.

Update Feb 23, 2007: I have opened a new RRSP account with Questrade.

Update June 25, 2007: Here is a detailed Interactive Brokers Review.

Update July 10, 2007: Here is a CIBC Investors Edge Review.

Update July 17, 2007: Canadian Capitalist has written a review of RBC Direct Investing.

Update July 19, 2007: Here is a detailed E*Trade Canada Review (now i-trade).

Update July 23, 2007: Canadian Capitalist has written a review of TD Waterhouse.

Update Aug 7, 2007: Canadian Capitalist has written a review of BMO Investorline.

Update: Jan 2, 2007: IB now requires a minimum initial deposit of $10,000USD to open an account.

Update: April 8, 2008: We’ve written a review of TradeFreedom discount brokerage.

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FrugalTrader About the author: FrugalTrader is the founder and editor of Million Dollar Journey (est. 2006). Through various financial strategies outlined on this site, he grew his net worth from $200,000 in 2006 to $1,000,000 by 2014. You can read more about him here.

{ 20 comments… add one }

  • Nikolai April 1, 2015, 12:53 pm

    @Justin,

    I am and I am slowly transferring more family accounts to IB. As I said in one of the previous posts – I simply calculated my total commissions for my existing TD Waterhouse accounts for past years, calculated what minimums I will need to pay to IB for maintaining them and estimated my transaction costs. Even if I simply keep the same (relatively inactive) transaction pattern I save quite a bit of money with IBC.

    For the calculations, they have the process outlined on one of their pages. It is a bit unclear, but briefly it is like this: they calculate the total minimums for all accounts (plus the advisor one) and compare it to total amount of commissions they collect for all of these accounts in month. If they collected more than that minimum – you are off the hook ;) If it is less – then they go account by account and charge the difference between $10 and whatever you have paid for each account. And that’s how they calculate the additional charge. Of course they skip the accounts that have 100K – they are not subject to the minimum fee.

  • Nikolai April 4, 2015, 5:52 pm

    By the way, just found something interesting about IBC…I have noticed that they have charged me a mysterious “IRA Quarterly Fee” for both TFSA accounts. Either I misunderstood something, or they were not supposed to – this fee is only mentioned for RRSP accounts. Inquiring…

  • Justin April 4, 2015, 10:23 pm

    @Nikolai

    That is interesting, please keep us updated.
    So the umbrella “advisor” account actually counts as one account but you can’t trade in it. If you linked up 3 trading accounts, you need to generate $40 minimum if instead of $30?

  • Nikolai April 5, 2015, 12:26 am

    @Justin

    Yes, the advisor account adds another $10/month to the total required commission amount linked to it.

  • Nikolai April 7, 2015, 1:11 am

    Follow-up on IBC and TFSA quarterly fees – got the answer to my ticket. “These fees were charged by mistake, they will be reversed shortly.”. Good. However, it proves, unfortunately, one very simple thing I have learned in the past from other financial institutions: trust no one. Even the banks make mistakes. I prefer to think of them as mistakes – otherwise it would be too depressing ;)

  • jxg67 April 17, 2015, 2:43 pm

    Questrade is very bad. They have ECN fee hiden. I was charge $90 in one transaction for selling 100K penny stocks. Find another broker who doesn’t have hiden fee. Otherwise you’ll regret.

  • art April 21, 2015, 7:26 pm

    Having been a Questrade client for years, I have to say that I am sick and tired of their incompetence regarding tax slips.

    First – they release them late – at least a month later than my TD Brokerage account does. This causes problems for me since I have to file US tax return too – which is due April 15th.

    Second – they release them with errors. Last year they cancelled all the T slips for my family and released amended ones – which caused problems with the CRA for my mother in law – problems that I am only now getting straightened out.

    This year I could not understand our tax slips – since they did not match earnings listed on monthly statements. I sent Questrade a request for explanation – they responded by notifying me that amended tax slips are now available…
    This is after the date US taxes were due – so now I will have to file amended returns again. Since everything is computerized – I simply find such incompetence inexcusable.
    As much as I liked other aspects of Questrade – I’ll be moving all of our accounts elsewhere.

    • Carl - Team Questrade April 27, 2015, 5:49 pm

      Hi Art,

      This is Carl from Team Questrade. I’m sorry to hear about the difficulties you encountered in obtaining accurate, timely tax slips.
      If you are still having troubles with either understanding the slips provided, or if you are missing any information, please send me an email at cbranch@questrade.com and I will escalate the matter.

      Thanks,
      Carl from Team Questrade

  • Rob April 22, 2015, 12:10 pm

    Reporting back from transferring 2 TFSA and 2 RRSP accounts from RBC to IB brokers. It was a bit tedious , but it got done.
    All I can say that IB brokers surpasses any broker in Canada overall. With pricing, robust platform , security , etc. Very happy I made the move. Thanks again to all the folks here on answering questions and for the info.

  • Nikolai May 4, 2015, 8:19 pm

    Hi,

    Need an advice on frugality :) I have recently discovered that I cannot transfer certain things to Interactive Brokers. More specifically, some stuff from the companies like Manulife, Sunlife etc. Reason: they have no ATON, thus automated transfer is not possible and IBC deals only with ATON. They do not want to process T2033 forms.

    So, here is the question: what is the most economical way to get the funds (more specifically – just cash) from such a dinosaur RRSP to IBC? I was thinking maybe about something like Questrade – they seem to support ATON, they most likely can handle T2033 and their transfer fees are more reasonable than with TDW and alike. I hate the idea of opening another registered account as a proxy just for transferring something once (or once a year) but the alternative is to withdraw, suffer the tax deduction, then put some of my own money, extra tax paperwork…But maybe someone knows a better/faster/cheaper solution?

  • John June 3, 2015, 12:40 am

    @Nikolai

    Did you ever figure out what was the best course of action transferring assets into IB RRSP? I’m in the similar situation as you…I have cash in a RSP savings @ Tangerine doing nothing but I can’t get it over there without withdrawing then contributing. The only way I can think of is to transfer into Questrade and then transfer out again… Such a hassle.

    Maybe its better just to stick to questrade but the availability to sell options + US conversion makes IB a better choice

  • Nikolai June 5, 2015, 5:06 pm

    @John,

    I have just solved my problem by opening an account with TD Waterhouse, transferring the funds into that account (in cash) using T2030 form and then transferring that account in full to IBC. Looks like this is the only way. $135+tx sucks, but if the amount in question is significant than it is not that bad. Yes, it is a bit complicated but then it gets simpler when you have all of your buying power under the single account.

    I think Questrade changes a bit more for the transfer. I checked a couple of brokers from the list that IBC offers – $135 was the lowest price. Also I did not want to deal with the brokers that I never dealt with. Like, for example, I would never deal with Desjardins or RBC, I think I am not compatible with their mentality ;)

  • Anna August 12, 2015, 12:35 pm

    Hi everyone, can someone give me a few suggestions, i’ve been trying to find answers but can’t seem to get to the bottom of this. I want to play NASDAQ stocks, and be able to do this: short sell, trade after hours and pre-market hours. I am in Canada. Can someone suggest to me a Broker to do this with? I am currently with BMO Direct InvestoreLine and i trade NASDAQ stocks with them all the time, but just regular trades, with $10 fee per trade (so $20 to buy and sell in total). Thanks!

  • Nikolai October 29, 2015, 11:03 am

    I am going to throw another stone at TD Waterhouse. Back in May I have transferred several accounts from them to Interactive Brokers. Once the transfer has been completed, the account have immediately disappeared from WebBroker and it was impossible to get any statements or other documents about them. To my surprise, two accounts have re-appeared in the end of September with some cash balances on them. Once I have noticed it, I have immediately downloaded all the new documents for them. And this is where I found that few days after the transfer was done back in May/June I have received some dividends on these accounts. TD Waterhouse has never done the residual transfer, which is supposed to be done “promptly” according to IIROC 2300.8 rule. Since then (it’s been 3 weeks) I am fighting with TD to get my cash transferred to IBC. So, not only they have failed to do the transfer, they were quietly holding these money for several months and up until now I have spent over 2 hours of my time fighting with them. Unfortunately, these are RRSP accounts, so simply taking the cash out is not the option I would consider.

    • Nikolai October 29, 2015, 10:53 pm

      Replying to myself. Got some more info from IBC clearing department. According to them TD Waterhouse is not able to properly do residual transfers! So, the solution seems to be re-initiate the full account transfer (as silly as it sounds – do another full account transfer several months after the first one was done ;) ). Hrrr…..Called TDW, spent another 20 minutes on the phone, told them to put a note “do not even think about charging the fee for this transfer” on all accounts, initiated new transfers, fingers crossed.

      Seriously…I had quite good opinion about TD – except their fees and outdated platforms. But non-compliance to IIROC rules….this is something I would not expect from them.

      • Nikolai November 20, 2015, 12:50 pm

        Believe it or not. After fighting for weeks with TDW I have resolved the issue – got these residuals transferred. I thought I would never hear about it again. Guess what? Just got a call from IBC about that. TD Waterhouse tried to CHARGE my IBC account for $2.30 mentioning some sort of fee. I told IBC to reject the transfer and called TDW. Turns out, TDW has sent me a paper bill and that was the fee for it. Paper bill for the account that has been enrolled in e-bills since the beginning, that has been fully transferred to another broker TWICE! OMG. The only thing I could tell the guy – do whatever you want but I do not want to hear about these accounts and any fees from you again anymore. The fee has been refunded (of course). Lets see what happens next. I am actually going to file a complaint to IIROC about this residual transfer story.

  • stacey dutton December 20, 2015, 6:26 pm

    We have 2 rrif accounts in canada with tdwaterhouse but retired in england.
    TDW will on longer do direct wire transfers and will only send cheques. It cost us over $100 to cash the cheques and put into our canadian dollar uk bank account plus we could not convert the money for 6 weeks to make sure it cleared the canadian bank first.
    Do you know of any brokers in canada who we can transfer out rrif’s to that will arrange our annual withdrawals via wire transfers?

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