The best online investment brokerage in Canada in 2024
THE STACK #35So you’re ready to start your investing journey but don’t know what investment brokerage to use. You’ve tried researching, but there are too many options, and you are about to give up and just stick with your bank.
Don’t give up yet because, in today’s issue of The Stack, I will compare all the online investment brokerages in Canada and give you my best pick based on different criteria.
THE STACK
What is an online investment brokerage?
An online investment brokerage is a licensed firm that provides a platform that allows investors to buy and sell securities online on their own.
They act as the middleman between investors and a securities exchange.
They are also referred to as discount brokerage or self-directed investing platform.
Online investment brokerages should not be confused with Managed Investment Accounts, where a Financial Advisor or Roboadvisor manages your transactions and portfolio.
What do you look for when choosing an online investment brokerage?
Before choosing an online investment brokerage, you should have an investment goal and know the types of securities you will purchase frequently.
Doing this will help you determine the best online investment brokerage that fits your goals.
Trading fees
Online investment brokers usually charge a commission, also known as a trading fee, to buy and sell certain securities.
Trading fees might seem small to the investor but add up over time.
For example,
If you purchase four ETFs bi-weekly with an online brokerage that charges a $9.99 trading fee per trade,
You will be paying (4 x $9.99) x 26 = $1,038.96 per year in fees. That’s enough to pay for a round trip to Paris plus two nights of accommodation in a decent hotel.
Now multiply that $1038.96 by another 35 years in the market, that is a whooping $36,364!!! Enough to buy you a brand-new car.
I’ve talked to many investors who prefer to stay with their current bank for convenience even though they charge a trading fee. So let me ask: is that convenience worth a yearly vacation?
| ONLINE BROKERAGE | INDEX FUNDS | ETFS | STOCKS | BONDS | BEST FOR |
|---|---|---|---|---|---|
| Wealthsimple Trade | Not Available | $0 | $0 | Not Available | CANADIAN STOCKS AND ETFS |
| Questrade | $9.95 |
$0 buy sell $0.01/share ($4.95 - $9.95) |
$0.01/share ($4.95 - $9.95) |
Min. $5,000 purchase | US STOCKS ETFS |
| Qtrade Direct Investing | $0 |
$8.75 (FREE 100 ETFS) |
$8.87 |
$1 per $1,000 face value ($24.99 min / $250 max) |
100 ETFS LISTED |
| TD Direct Investing | $0 | $9.99 | $9.99 | $1.50/$1,000 face value + $40 | TD INDEX FUNDS |
| RBC Direct Investing | $0 | $9.95 | $9.95 | $25 | RBC INDEX FUNDS BONDS |
| BMO Investor's Line | $0 |
$9.95 (FREE 80 ETFS) |
$9.95 | $1.50/$1,000 face value + $40 | BMO INDEX FUNDS AND ETFS |
| CIBC Investor's Edge | $6.95 | 6.95 | $6.95 | $1.50/$1,000 face value + $40 | NONE |
| Scotia Itrade | $0 | $9.99 | $9.99 |
$1 per $1,000 Face Value ($24.99 min, $250 max) |
SCOTIA INDEX FUNDS |
| National Bank Direct Brokerage | $0 | $0 | $0 | Quoted in price | STOCKS, ETFS, INDEX FUNDS |
| CI Direct Investing | $0 | $0 Buy Sell $0.01/share ($1.99 - $7.99) |
$0.01/share ($1.99 - $7.99) |
Free (traded only on an agency basis) |
ETFS |
The best online brokerage for commission-free trading in Canada is National Bank Direct Brokerage.
Investment Minimum
Some online investment brokerages require a minimum investment when opening a new account.
For new investors who cannot afford the investment minimum, this could stall the start of your investment journey.
Choose an online investment brokerage that does not require an investment minimum to open a new account, especially if you will not start with a lump sum.
Also, choose an online investment broker that does not require a minimum purchase for securities.
| ONLINE BROKERAGE | INVESTMENT MINIMUM FOR NEW ACCOUNTS | INVESTMENT MINIMUM FOR INDEX FUNDS |
|---|---|---|
| Wealthsimple Trade | $0 | Not Available |
| Questrade | $1,000 | Per Index Fund Minimum |
| Qtrade Direct Investing | $0 | Per Index Fund Minimum |
| TD Direct investing | $0 | $100 |
| RBC Direct investing | $0 | $500 |
| BMO Investor's Line | $0 | $500 |
| CIBC Investor's Edge | $0 | $500 |
| Scotia iTrade | $0 | $500 |
| National Bank Direct Brokerage | $0 | Per Index Fund Minimum |
| CI Direct Investing | $1,000 | Per Index Fund Minimum |
The best online brokerage that does not require a minimum investment is Wealthsimple Trade.
Availability of registered accounts
Choose an online brokerage that offers all the registered accounts you wish to invest in, such as:
Registered Retirement Savings Plan - RRSP
Tax-Free Savings Account - TFSA
First Home Savings Account - FHSA
Registered Education Savings Plan - RESP
Spousal RRSP
Registered Retirement Income Fund - RRIF
Locked-In Retirement Account - LIRA
Locked-In RRSP - LRSP
Life Income Fund - LIF
Registered Disability Savings Plan - RDSP
Margin Account
Non-registered / Cash Account
Formal / Informal Trust Account
| ONLINE BROKERAGE | RRSP | TFSA | FHSA | RESP | SPOUSAL RRSP | RRIF | LIRA, LRSP, LIF |
MARGIN | RDSP | NON-REGISTERED | TRUST |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Wealthsimple Trade | Yes | Yes | Yes | No | No | Yes | Yes | No | No | Yes | No |
| Questrade | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | No | Yes | Yes |
| Qtrade Direct Investing | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | No | Yes | Yes |
| TD Direct investing | Yes |
Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| RBC Direct investing | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | No | Yes | Yes |
| BMO Investor's Line | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| CIBC Investor's Edge | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | No | Yes | Yes |
| Scotia iTrade | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | No | Yes | Yes |
| National Bank Direct Brokerage | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | No | Yes | Yes |
| CI Direct Investing | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | No | Yes | Yes |
The best online investment brokerage, which has the widest range of accounts available through its self-directed platform, is TD Direct Investing.
Availability of securities
Choose an online investment brokerage with the securities you wish to invest in, such as index funds, ETFs, stocks etc.
They should also offer securities on a wide variety of exchanges to give you more options of securities to choose from.
| ONLINE BROKERAGE | SECURITIES AVAILABLE |
|---|---|
| Wealthsimple Trade | STOCKS, ETFS, OPTIONS |
| Questrade | STOCKS, ETFS, MUTUAL FUNDS, OPTIONS, FX, BONDS, GICS, COMMODITIES, IPO |
| Qtrade Direct Investing | STOCKS, ETFS, MUTUAL FUNDS, OPTIONS, BONDS, GICS, IPO |
| TD Direct investing | STOCKS, ETFS, MUTUAL FUNDS, OPTIONS, BONDS, GICS, IPO |
| RBC Direct investing | STOCKS, ETFS, MUTUAL FUNDS, OPTIONS, BONDS, GICS, IPO |
| BMO Investor's Line | STOCKS, ETFS, MUTUAL FUNDS, OPTIONS, BONDS, GICS, COMMODITIES |
| CIBC Investor's Edge | STOCKS, ETFS, MUTUAL FUNDS, OPTIONS, BONDS, GICS, COMMODITIES |
| Scotia iTrade | STOCKS, ETFS, MUTUAL FUNDS, OPTIONS, BONDS, GICS, COMMODITIES, IPO |
| National Bank Direct Brokerage | STOCKS, ETFS, MUTUAL FUNDS, OPTIONS, BONDS, GICS |
| CI Direct Investing | STOCKS, ETFS, MUTUAL FUNDS, OPTIONS, BONDS, GICS, IPO |
The best online investment brokerage with the most securities available to trade on its platform is Questrade.
Intuitive Platform
Choose an online investment brokerage that has an easy-to-use, intuitive platform.
Some brokerages offer lots of free investing tutorials, which could be an advantage to help increase your knowledge.
Fast Deposits
Choose an online investment brokerage that has instant deposits.
Some brokerages link to your chequing account. It can take up to three business days for the funds to appear in your brokerage account. This can impact your investments as the price of the securities you want to purchase might increase, making you buy them much higher.
Admin Fees
Some brokerages charge account maintenance fees either annually or quarterly. Choose an online investment brokerage that does not charge maintenance fees or waives the account maintenance fees.
There could also be inactivity fees.
The best online investment brokerage with the lowest fees is Wealthsimple Trade
Investment Transfers
Some brokerages charge you a fee to transfer your investments or cash to another brokerage.
Choose an online investment brokerage that offers to refund the transfer fees when moving your investments to their platform.
| ONLINE BROKERAGE | ADMIN FEES | TRANSFER OUT FEES | REBATE OF TRANSFER FEES |
|---|---|---|---|
| Wealthsimple Trade | $0 | $0 | $150 min of $5,000 |
| Questrade | $0 | $150 | $150 |
| Qtrade Direct Investing | $25/Quarter | $150 | $150 min of $15,000 |
| TD Direct investing | $25/Quarter | $150 | $150 min of $25,000 |
| RBC Direct investing | $25/Quarter | $150 | $200 min of $15,000 |
| BMO Investor's Line | $25/Quarter | $150 | $200 min $250,000 |
| CIBC Investor's Edge |
$25/Quarter $100 annual fee |
$135 | $0 |
| Scotia iTrade |
$25/Q low activity $100 annual fee |
$150 | $150 min of $1,000 |
| National Bank Direct Brokerage | $100 annual fee | $150 | $150 min of $20,000 |
| CI Direct Investing | $24.95/Quarter | $150 | $150 min of $25,000 |
The best online brokerage account with the best rebate program for transferring to a new account is Questrade.
*Note that this table is not the extensive list of fees charged by the brokerages mentioned. Additional fees are charged for various transactions. Ensure you look at the fee schedule published on the respective websites.
Alerts
Some online brokerages allow you to create a watchlist for stocks and ETFs and offer alerts for the stocks and ETFs on your wishlist or portfolio.
This is a nice feature to notify you of price movements for your securities.
Dual Currency Accounts
Some online brokerages allow you to hold CAD and USD in the same accounts.
This feature makes buying and holding US stocks in USD much more effortless than converting to CAD.
Currency Conversion Fees
Choose an online brokerage with a low foreign currency conversion fee if you're buying any foreign investments.
Portfolio Tracking
Choose an online brokerage that shows you how your investments are performing.
It should be able to track the following:
Contributions
Transfers
Personal rate of return on investments
Asset allocation based on types of investments
Book value of your investments
The market value of your investments
Regulation
Choose an online brokerage registered with the Investment Regulatory Organization of Canada (IIROC), Canadian Investment Regulatory Organization (CIRO) or the Financial Industry Regulatory Authority (FINRA).
IIROC is a regulatory organization that oversees all investment dealers and trading activity on Canada's debt and equity markets.
IIROC is committed to protecting investors, market integrity, and building Canadians' trust in financial regulation and the people managing their investments.
You can directly search the brokerage on IIROC's or CIRO’s website or look for the IIROC logo on the brokerage's website.
Insurance
Choose an online brokerage insured with the Canadian Investor Protection Fund - CIPF.
CIPF provides limited protection for securities held by a member firm on behalf of an eligible client if the member firm becomes insolvent.
If you have an account with a member firm, and that firm becomes insolvent, CIPF works to ensure that any securities or cash being held for you by the firm at that time is given back to you, within certain limits - up to $1 million combined per type of account.
CIPF does not protect any other type of risk or loss.
THE TOOL
Fees eat into your gains, and this fee calculator will show you exactly how much your investment fees will cost you in the long run.
Include the Management Expense Ratio (MER), Trading fees, admin fees and all other fees your brokerage charges you and prepare to be shocked!
THE ACCOUNTABILITY
If you already have an online brokerage, search for their fee schedule to see all the fees they charge.
Ensure that there are no sneaky fees.
THE COURAGE
THE KNOWLEDGE
Financial Advisor
A financial advisor is a professional who helps create a personalized plan for you to achieve your financial goals.
A financial advisor should have technical knowledge of investment products and be able to give investment recommendations that suit the client’s goals.
They assist with choosing investments that match the client’s risk profile and rebalancing the client’s investment portfolio.
A financial advisor should be licenced with a regulatory body in the province in which they provide service.
A financial advisor can be paid management fees, a trailing commission or a one-time fee to manage your investment portfolio.
Mutual Fund Representative
A mutual fund representative is a person who assists clients in the purchase and sale of mutual funds.
A mutual fund representative can only offer mutual funds that they are authorized to sell.
A mutual fund representative acts on behalf of the mutual fund broker, NOT the client.
Fun fact: Most times, when you go to the bank to open an investment account, the bank or representative is simply acting as a mutual fund representative, NOT a financial advisor, so they are not obligated to create a personalized plan that is in your best interest.
Keep Stacking!
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