Canadian Discount Brokerage Review and Comparison for TFSA and RRSP

With the wide selection in discount brokers offering services to Canadians, it can be difficult to understand what each firm is offering and even harder to determine which is the best broker for your needs. We’ve compiled a list of brokers and their relevant fees.

Infrequent traders

Individuals that place infrequent trades or have smaller account sizes are best off with Questrade in terms of commissions. At only $4.95 per trade (minimum), it is the lowest cost brokerage. Keep in mind that research is limited through Questrade, so you’ll have to have sources beyond your broker in order to do in depth research on equities or markets. Fixed income trading through Questrade is also more difficult than other brokers, requiring a phone call.

Virtual Brokers (VB) is another interesting option as well, in that they have a varied fee structure depending on what option you elect for. VB allows you to choose your commission option, either a flat $6.95 per trade or a per share arrangement, starting at $0.01 per share for stocks under $1.00. Depending on your trading patterns, this can be cheaper or more expensive than Questrade.

Questrade ® $50 Credit:
If you open an account with Questrade ® as a referral and deposit the minimum $1000, you will get up to $50 in free trades, just click on this link and open the account. You can also open the account at a later time, just make sure that in the Affiliate ID you use tradecanada and it will recognize you as a referral and credit you the $50.

Frequent Traders

There are a number of brokerages that offer discounts for frequent traders, with most of the big bank brokerages offering $6.95 or $7 trades if you provide them with 150 or more trades per quarter. These brokerages include TD Waterhouse, RBC Direct Investing, Scotia iTrade, and CIBC Investor Edge. The commissions increase to approximately $10 per trade if in range of 30-150 trades per quarter for all of these brokers.

HSBC InvestDirect also offers $6.88 per trade for high volume investors; however they set the line at 100 trades per quarter rather than the 150 trades that other brokerages demand.

Questrade still offers the lowest overall price at $4.95 per trade; however, at this volume of trading the added research, support and functionality of some of the other platforms may be worth the $2 per trade difference, depending on how much you utilize these features and the value they provide to your trading strategy. Trade Freedom also offers $6.95 rates, but has similar limitations to Questrade in terms of research and value added functionality.

Large Account Size

For investors with large account sizes, many brokers are willing to offer special commission rates and fee waivers, even if you trade infrequently. HSBC Direct Investing, TD Waterhouse, RBC Direct, Scotia iTrade, BMO Investorline, CIBC InvestorEdge and Qtrade will offer $9.95 trades with total assets of $50,000 or more. Further discounts are available for investors with even larger accounts, including $6.88 trades for investors with over $500,000 invested at HSBC and $6.95 per trade offered to CIBC customers with over $100,000 invested.

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Mutual Fund Investors

For those that invest primarily in mutual funds, there are several brokers that offer no fee accounts so this is likely the direct that you want to go in. Questrade and Disnat are the only firms that currently charge fees, however Questrade will refund you trailer fees, offsetting some of the cost.

Keep in mind that most brokerages will charge you a fee if you redeem a mutual fund within 90 days of purchase (some exclude money market funds from these rules, but check your agreement).

Open an account with Questrade ® and get FREE $50 in trades, use this link or Affiliate code: tradecanada.

Other Considerations

Choosing a broker is not all about fees; it may be matter of convenience or trust. While all of the brokers here are registered with the Canadian Investor Protection Fund, so your balances are safe despite the financial stability of any of the brokerages (not that any of these brokers are in financial difficulty to the best of our knowledge).

Transferring money between brokerage accounts can also be a hassle with some of the firms, and it may be more convenient to use the brokerage arm of your regular financial institution if you are frequently transferring funds in and out of your accounts.

Here is a summary table of our findings when we surveyed Canada’s leading discount brokerages (Questrade, Virtual Brokers, Disnat, HSBC InvestDirect, TD Waterhouse, RBC Direct, Scotia iTrade (previously e*trade, BMO Investor Line and Qtrade): 

“Questrade® is a registered trademark and/or service mark of Questrade, Inc. Questrade Inc. is a member of the Investment Industry Regulatory Organization of Canada (IIROC) and a member of the Canadian Investor Protection Fund (CIPF).”

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