Save & Invest
The Best Discount Brokerages in CanadaApril 26, 2023
When it comes to investing, you can end up spending a lot of money just on brokerages. One way to save some money on these fees is to use different online trading platforms (also referred to as online stock brokers) in Canada. While this does often involve a self directed investing approach, there are some that don’t. That said, you do often have the power to make a trade, for free, right from your phone. Their platforms also give you access to different market research tools to help you make the most of your investment.
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When you, as a Canadian investor, are deciding to go the self-directed investing route, it is important that you do your research before you decide on an online brokerage. Different brokerages offer trading of different securities. They also have different fees. It’s important to ask yourself questions like: What is the best overall brokerage? What if I only want to invest in index funds? Which brokerages don’t take commission? Which has the lowest overall fees? These are just a few. Don’t worry though. We have done some of the research for you to help you get started.
Best Online Brokerages for Index Funds
If you are looking into investing in index funds, there are quite a few online brokerages available to help you out. Whether it’s with a private brokerage, or one connected to a major bank, you have to find the one that works best for you. Luckily, you have some great ones to choose from.
RBC Direct Investing
When it comes to investing in index funds, one of the best online brokerages that you can use is RBC Direct Investing. They also offer a wide range of other investment options as well, including:
- Fixed securities
- ETFs (Exchanged Traded Funds)
- Mutual Funds
With RBC, the fees are pretty straightforward. It’s $9.95 per trade, unless you are more of an active trader. If that is the case and you make more that 150 trades per quarter, the fee is then $6.95. That is for everything except mutual funds and fixed securities. For mutual funds the fee is 1% of the gross trade amount when you buy or switch. The commission on fixed securities is $25 to $250 per trade. That amount is already quoted into the price. There are no extra account fees on top of these.
When it comes to getting index funds, ETFs or mutual funds with RBC, they have tools directly on their site in order to help you make the right investment decision. They have real time streaming accounts as well as access to research and exclusive tools. They even offer the ability to create a practice account. This allows you to practice your trading without losing any funds.
Qtrade Direct Investing
Just like other brokerages, Qtrade offers a wide variety of investment options besides index funds. These include:
- Mutual Funds
Not only that, you can begin with a 30 day free trial. After that, the prices are very reasonable.
|Security||Fee||Fee for Active Traders|
|Select ETFs (includes index fund ETFs)||Free||Free|
|Options||$8.75 + $1.75||$6.95 + $1.75|
|Exchange Traded Debentures and Fixed Securities||$1 per $1,000 face value||$1 per $1,000 face value|
While the actual trading fees are reasonable and there are no commission fees. There are other fees that are included. The most common is the $25 administration fee that is charged every quarter. There are also administration fees, documentation fees and cancellation fees. If you have brokerage accounts with other online brokerages (or any brokerage) there is an account transfer free of $150. On investment account transfers valued at $15,000 or more, the fee will be reimbursed.
Throughout their website, there is also a ton of information and resources available to new and experienced investors on the stock market and other pertinent information. This includes information on RRSPs, TFSAs and stock trading.
Since Qtrade isn’t part of the big five banks, people can be skeptical about using it but it’s actually quite safe. Qtrade is actually owned by Avisa Wealth. Avisa is one of the largest wealth management firms in Canada. They have over $95 billion in investment assets from over 500,000 clients.
As one of the top five banks, it’s really no surprise that BMO InvestorLine is one of the best investment brokerages for index funds. That said, they actually do offer quite a few investment options including ETFs, mutual funds and stocks.
WIth BMO InvestorLine there are many reasons to go with them. Not only are they one of the top online trading platforms, they are also one of the best bank owned brokers. You also have the option to trade using your phone or going onto the actual site. THere is also a ton of investing education at your fingertips.
The main reason they are a great fit for investing in index funds and ETFs is the fact that they offer a ton of them with no trading fees. This is ideal if this is your main focus of investing. There are no commission fees and any other trades are $9.95b per trade. They also don’t require a minimum balance.
When it comes to investing with BMO, there are a few different investment accounts that you can choose from. They offer TFSAs, RRSPs, RESPs, and RRIFs. They can help you figure out what type of account is best for you.
Whether you are a beginner trader or a more experienced trader, there are plenty of options for you. You have the option between self-directed investing and advice directed investing. They even have a program for experienced investors that allows for you access to exclusive perks. It’s called the BMO 5 star program and it is available to those to make 15 or more trades per quarter. It includes:
- Dedicated support
- Preferred rates and pricing
- Thorough research
- BMO active trader as well as other tools that are professional level
They have a little something for everyone.
Best Zero Commission Brokerages
When you are looking into investing, instead of standard fees, some brokerages charge a commission rate. Depending on the amounts invested, brokerages can make more money this way. Here are some of the best online brokerages that don’t charge any commissions.
TD Direct Investing
One of the best online brokers that have no commission fees is TD Direct Investing. They were actually named as one of Canada’s best online brokerages. They don’t just offer one investing platform, they actually have multiple to choose from. They also have multiple different types of things you can invest in besides index funds.
- Mutual funds
- Fixed securities
There are also multiple different types of investment accounts to choose from. You can invest with cash, margins, TFSAs and RRSPs.
When it comes to pricing they have standard flat rates. That said, all of their investments are also commission free. There is, however, a $25 maintenance fee if your TD investing accounts hold less than $15,000. This is charged every quarter.
|Stocks (Standard Rate)||$9.99 trading fee (Canada and US)|
|Options (Standard Rate)||$9.99 + $1.25 (Canada and US)|
|Stocks (Active Trading Rate)||$7.00 (Canada and the US)|
|Options (Active Trading Rate)||$7.00 + $1.25 (Canada and the US)|
TD Direct Investing also offers tools and resources to help you make the best investing decisions. Whether you are new to investing or just want to expand your investing knowledge, there is information available to you.
Wealthsimple is another great option if you are looking for a brokerage account but don’t want to pay commision fees. They also have the added bonus of having a more diverse collection of investments. They offer:
This makes them stand out a bit more than other investing platforms. They also have no fees for trading stocks and ETFs. Not only that, they offer a ton of education in investing. They offer masterclasses and have a bunch of articles available to all users. They als0 have much lower currency conversion fees than other apps.
The downside to this platform is that it’s mostly available on mobile devices. The app is available on IOS or android. It isn’t entirely ideal for those who don’t use apps. You also have to keep in mind that their stock updates aren’t in real time. There is around a 15 minute delay. That said, you are able to get the real time quotes by registering for a premium account which is $3 per month.
Cheapest Brokerage Firms
Looking at all these online brokers in Canada, you notice that they do all have relatively low fees. That said, there are a few brokerages that top the one that we have already discussed.
National Bank Direct Brokerage
This is a new popular online brokerage. Just like many of the others that we have mentioned, they have no commissions on their investments. One of the key features that they promote is their state of the art analysis tools. Bonus, they are free. They are there to help new investors and experienced investors make informed decisions when it comes to investing their money.
The thing with National Bank Direct Brokerage though, is that they only offer options and ETFs. That said, the fact that they limit the securities that they offer, allows them to make those securities their speciality.
As we mentioned, this brokerage has no commissions. There is an annual fee of $100 but that will be waived as long as you meet at least one of the following criteria.
- You hold eligible securities that equal up to $20,000. This has to be completed by May 31.
- You hold an InvestCube account.
- You must be enrolled in one of their offers for investors.
- You must also be a young investor.
There are also some other fees to consider.
|Type of Transaction||Fee|
|Electronic Funds Transfer (from your bank account)||Free|
|Withdrawal from TFSA, RESP, RDSP||Free|
|Non-Resident||$150 per account|
|Internal transfer (Canadian dollar account to US dollar account)||$995 for each security|
|Transfer to another brokerage or institution (partial or total)||$150 for each account|
|Wire transfer (by phone from a non NBC bank)||$75 for each transaction|
|Excess RRSP reimbursement||$100 per transaction|
|Withdrawal from RRSP, RRIF, LIF (Lump sum)||$50 each transaction|
|Transfer from LIF to locked account||$100 each transaction|
There are also some other fees for certain specialized services and documentation.
If you are planning to use this brokerage though, you have plenty of different things you have access to for a low cost. You can easily find ETFs and options that include what you are looking for. You can also track your performance and set alerts for securities when they reach your ideal price.
CI Direct Trading
CI Direct Trading is an online brokerage that focuses on making self-directed trading simple and accessible, all at a low cost. Not only do they have different investment options, they also offer different account types and multiple trading platforms.
When it comes to commissions, there is a 1 cent fee for all equities, no fee for ETFs to sell and 1 cent to buy, and $7.99 when you buy or sell options, There are also other fees depending on whether you are an active trader or use broker assisted trading.
|Security||Active Trader||Broker Assisted|
|Mutual Funds||Free trades||Free trades|
|Fixed Income Securities||Free trades||Free trades|
|Options||$3.99 plus $1.25 contract (150 plus trades in the quarter)||$50 plus $2 contract|
|Equities||$3.99 (150 plus trades in the previous quarter)||$50 plus 3% per share (max $0.03)|
|Exchange Traded Debentures||$24.99 plus $1.00//$1000||1.5% of principal value|
There are also some account fees and administration fees, depending on the transaction that you wish to make. There are also some platform fees on the US platforms. Non-canadian residents follow an international commission schedule and have some extra fees per transaction.
Even though CI Direct Trading does provide a simple approach for self-directed investing, they also are there to assist you if you need it. Their app also allows you to invest and transfer funds anywhere at any time.
Investment Companies with the Lowest Fees
We have discussed the online broker costs of those that are the cheapest, but we haven’t discussed the ones with the lowest fees. Every brokerage charges their fees a little bit differently. The one you choose really depends on what you are looking to invest in and how much you are wanting to invest. Here are some of the best discount brokers with the lowest fees.
Questrade is a platform that offers multiple online brokerage services. You can either choose self-directed investing, if you like to be in control of your own investments, or get a pre-built portfolio. It is considered to be one of the best trading platforms with low fees. The fees depend on which type of investing you choose to do.
With their self directed investing, Questrade offers:
- No fees for opening an account
- No yearly RRSP or TFSA fees
- No commission on ETFs
- Low commission rates
The trading fees are:
- 1 cent per share to trade stocks (min $4.95, max. $9.95)
- No fees when you purchase ETFs, 1 cent each when you sell (min $4.95, max $9.95)
- Options are $9.95 plus $1 contract
- Mutual funds are $9.95 each
You also have the option to upgrade your package.
Real Time Options: This package allows you to get real time level 1 data on Canadian and US options. It costs $19.95 with the possibility to be eligible for a full rebate.
Advanced US Streaming: This package gets you level 1 and level 2 data for US exchanges and indices data. You also get active trader pricing. The cost is $89.95 per month with the possibility of a full rebate.
Advanced Canadian Streaming: This package gets you level 1 and level 2 data for Canadian exchanges and indices data. You also get active trader pricing. The cost is $89.95 per month with the possibility of a full rebate.
If you decide, when you create your online brokerage account, to go with the pre-built portfolio for ETFs, their management fees are still relatively low. The fees start at just 0.25% (0.20% for amounts over $100,000). Then there is the additional MER, (Management Expense Ratio) which will be individual to the ETF that you invest in.
CIBC Investor’s Edge
CIBC Investor’s Edge offers another great way to invest your money with minimal fees. They offer you the ability to invest in:
- Mutual Funds
- Fixed income investments
- Precious metals
- IPOs (Initial Public Offerings)
- Structured notes
The pricing of their investments is relatively low compared to other discount investment brokerages:
- When you buy and sell Stocks and ETFs they are $6.95 each
- Options are $6.95 plus $1.25 per contract
- Mutual funds are $6.95 or no cost for money market funds
There are no annual account maintenance fees for TFSAs or RESPs. There are no fees on RRSPs, RRIFs, LIRAs, and LIFs unless the market balance on your account is $25,000 or less. The fee is then $100. There are no fees on non registered accounts unless the balance in the account is $10,000 or less. The fee is then $100 as well.
Their platform also includes a few great features. There is investor education to help you make informed decisions when investing your money. You can also personalize your watchlist and alerts to help you follow the market more closely. You also have access to screening and charting tools, they even give you access to expert research.
Desjardins Online Brokerage
Desjardins online brokerage, also known as Desjardins Securities Inc, is another one of the online brokerages in Canada. They have two different options you can choose from when it comes to trading securities. The fees on each depend on whether or not you are an active trader.
|Securities||Disnat Classic||Disnat Direct|
|Equities and ETFs||$0 commission||$0 commission|
|Options||$1.25 per contract ($8.75 min)||$1.25 per contract ($8.75 min)|
|Mutual Funds||$0 commissions||$0 commissions|
|Fixed Income Securities||$50 per trade||$50 per trade|
Disnat classic has no fees for the markets. Disnat classic has more advanced markets so there is a fee per market if you don’t stay active. The Market Q Platform has no fee if you perform 10 or more trades per month, if not the fee is $35 per month. The Market Q Platform Level 2 is $0 per month if you perform 41 trades or more per month, if not the cost is $105 per month.
There are also inactivity fees. These are $30 per quarter and are waived if 6 or more trades have been done in the preceding 12 months. It can also be waived if you hold an RRSP, RRIF, or RESP or if your portfolio value is $15,000 or more.
They also include all sorts of perks. There are different analysis tools that are free for all Desjardin Brokerage clients. There are also events held every year, personalized services and resources to help with responsible investing.
They also have a Direct Brokerage for those ages 18 to 30. With this program you can trade:
- Mutual funds
- New issues
There are no fees for equity and ETF trades, no minimum balance is required, no activity fees, no admin fees and no minimum balance required for RRSPs.
When it comes to finding a discount brokerage, the important thing you want to consider is if they are legitimate. Canadian online brokerage firms are registered with and protected by the Canadian Investor Protection Fund as well as the Investment Industry Regulatory Organization. These help to protect you and your funds.
If you are looking to invest, there are plenty of options available to you. Whether you want to invest with the large 5 banks or a smaller brokerage, there are options for everyone. Take a look at all of your options and figure out which one fits your investment needs the best.