Choosing An Online Broker For DIY Investing

Choosing An Online Broker For DIY Investing

I've been doing DIY investing since 2011, previously I was with a big financial investment company where the service was good but was mainly invested in mutual funds that have very high MERs.

At first I had no idea really what I was doing, but now I have a sense of picking stocks and selecting ETFs that I find value in and putting my money to work. And so far, so good. 

Now I think I’ve reached a point with my DIY investing career where it’s time to try out a new online broker and see if the grass is greener somewhere else when it comes to discount online brokers.

Why Choose A DIY Approach To Investing

Here are three reasons why DIY investing works for me:

  • Having direct control over the ETFs or stocks I buy and sell is very important. It’s empowering as I am directly in control of choosing the companies I want to invest in.
  • It lets you make your own mistakes and learn lessons about how the markets work (or don’t work) and that’s how I seem to learn best.
  • It’s convenient and efficient. With online brokers today it’s easy to set alerts for when stock goes up or down and reaches a price you believe it’s worth.

Related: How To Rebalance Your Investment Portfolio

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Online Broker Comparison

Full disclosure: I currently am with Credential Direct. I'm leaving because, in my opinion, they lost their way with customer service. After accidentally charging me extra fees that I believe didn't apply to my account (without warning), I requested they be refunded but was told they were within their rights to do it.

Looking back, they did in fact have the right to charge me, but I thought a message saying why the charges were taking place would have been much more effective than debiting my bank account. I have been with them for a while.

Worse, I have recently experienced some instability with their trading platform (trouble logging in during peak times) – and so this is enough for me to want to make a change.

I may come back to them eventually, but thinking giving a new place a try is a good idea.

Most people choose convenience when figuring out which online broker to use. I know I did. But lately I’m wondering if there’s a better platform that offers greater service. Here’s my list of current places I’m considering:

BMO InvestorLine

Commission Account Types & Investments Offered Fees & Minimum Deposits Perks

$9.95 per trade

+ $1.25 for options

  • Cash
  • Margin
  • RRSPs
  • TFSA
  • RESP
  • RIF
  • Locked In Accounts
  • Stocks
  • Mutual Funds
  • Fixed Income
  • ETFs
  • GICs
  • Options
  • Fees for registered accounts for RRSP, LIRA, LRSP, RIF, LRIF, RLSP, LIF, RLIF and RESPs
  • No fee is charged when your account value is greater than or equal to $25,000.
  • An annual administration fee of $50 is charged for RESP accounts less than $25,000.
  • For all other registered accounts, $100 is charged for accounts less than $25,000.
  • Touted to have the best customer service in the biz.
  • Offer Webcasts and E-curriculum for investors
  • $200-$750 in cash back or free equity trades (ends April 1, 2018)

CIBC Investor’s Edge

Commission Account Types & Investments Offered Fees & Minimum Deposits Perks

$6.95 per trade

$4.95 per trade for active traders (150 trades or more per quarter)

+ $1.25 for options

  • Cash
  • Margin
  • RRSPs
  • TFSA
  • RESP
  • RIF
  • Locked In Accounts
  • Stocks
  • Mutual Funds
  • ETFs
  • Fixed Income
  • GICs
  • Options
  • $100 Annual Fee on Non-registered accounts when the market balance is less than $10,000.
  • $0 when Market balance is greater than $10,000
  • $100 Annual Fee on Registered Accounts when market balance is less than $25,000. $0 When market balance is greater than $25,000
  • $0 for RESP or TFSA Accounts
  • No minimum account balance, no minimum trades $0 fees on RESP & TFSA accounts
  • Asian Language Services

Credential Direct

Commission Account Types & Investments Offered Fees & Minimum Deposits Perks

$8.88 per trade

+ $1.25 for options

$1 per $1,000 for Fixed Income

  • Cash
  • Margin
  • RRSPs
  • TFSA
  • RESP
  • RIF
  • Locked In Accounts
  • Stocks
  • Mutual Funds
  • Fixed Income
  • GICs
  • Options

$25 per quarter or $0 if you have:

  • $15,000+ in cumulative assets, or
  • At least 2 commissioned trades in each quarter, or
  • A recurring deposit of at least $100 a month, or
  • A new account (for up to 6 months)

Access to experts for new and experienced traders.

Questrade

Commission Account Types & Investments Offered Fees & Minimum Deposits Perks

1 cent per share up to $9.95 per trade with $4.95 minimum.

+ $0.75 for options

Buy ETFs for Free, Sell for $4.95

  • Cash
  • Margin
  • RRSPs
  • TFSA
  • RESP
  • RIF
  • Locked In Accounts
  • Stocks
  • Mutual Funds
  • ETFs
  • Fixed Income
  • GICs
  • Options
  • Precious Metals
  • FOREX
  • CFDs

No Annual Fees (TFSA & RRSP)

 

Otherwise $5,000 min balance to eliminate the $24.95 quarterly inactivity fee.

  • Canada’s #1 choice for DIY Investing
  • Offers Managed Investing
  • Teaches Newbies How To Trade
  • Loyalty program for referrals
  • Free Electronic Transfers
  • No account opening or closing fees

Qtrade

Commission Account Types & Investments Offered Fees & Minimum Deposits Perks

$8.75 per trade

$6.95 for active or high asset traders

+ $1.25 for options

Buy ETFs Free, Sell for Free. Choose from a list of 100 approved ETFs

  • Cash
  • Margin
  • RRSPs
  • TFSA
  • RESP
  • RIF
  • Locked In Accounts
  • Stocks
  • Mutual Funds
  • ETFs
  • Fixed Income
  • GICs
  • Options

$25 per quarter, or

The Administration Fee will be waived if any of the following apply:

  • You have at least $25,000 in assets as of the last business day of each calendar quarter
  • You completed at least 2 commission-generating equity or option trades during the immediately preceding calendar quarter
  • You completed at least 8 commission-generating equity or option trades during the immediately preceding 12 months
  • You add $100 or more to your account each month by recurring electronic funds contribution
  • You are 18-30 years of age and add $50 or more each month to your account by recurring electronic funds contribution
  • You have been a client for less than one calendar quarter

Offer Margin Trading Accounts

RBC Direct Investing

Commission Account Types & Investments Offered Fees & Minimum Deposits Perks

$9.95 per trade

$6.95 per trade for active traders (150+ transactions per quarter)

+ $1.25 for options

  • Cash
  • Margin
  • RRSPs
  • TFSA
  • RESP
  • RIF
  • Locked In Accounts
  • Stocks
  • Mutual Funds
  • ETFs
  • Fixed Income
  • GICs
  • Options
  • $100 per year, or
  • Free when you have combined assets of $15,000
  • Practice trading platform
  • Access to advisors
  • Free Investment Seminars

Scotiabank iTrade

Commission Account Types & Investments Offered Fees & Minimum Deposits Perks

$24.99 up to 1,000 shares + 3¢/share afterwards

$9.99 per trade for Scotia Bank customers with $50,000 combined assets or loans, or

$4.95 per trade for frequent traders (150 + trades per quarter)

+ $1.25 for options

Buy ETFs for Free, Sell for Free. Approved ETFs only

$1 per $1,000 for Fixed Income ($24.99 min and $250 max)

  • Cash
  • Margin
  • RRSPs
  • RRSPs
  • TFSA
  • RESP
  • RIF
  • Locked In Accounts
  • Stocks
  • Mutual Funds
  • ETFs
  • Fixed Income
  • GICs
  • IPOs and New Issues
  • Options
  • Cash Account
  • $100 per year, or
  • Free when you have combined assets of $15,000 and make more than 12 commissionable trades per year
  • Free Education tools
  • Practice Accounts to learn the trading platform
  • Loyalty Friend Referral program

TD Direct Investing

Commission Account Types & Investments Offered Fees & Minimum Deposits Perks

$9.99 per trade, or

$7.00 per trade for active traders (150+ per quarter)

+ $1.25 for options

  • Cash
  • Margin
  • RRSPs
  • TFSA
  • RESP
  • RDSP
  • RIF
  • Locked In Accounts
  • Stocks
  • Mutual Funds
  • ETFs
  • Fixed Income
  • GICs
  • Options
  • Precious Metals
  • No fee for household accounts with total assets of $15,000 or greater.
  • $25 per quarter for household accounts with total assets or less than $15,000.

The fee will be waived if any one of the following conditions is met:

  • The first account in your household accounts has been open has no fees for the first six months.
  • One or more of the accounts in your household accounts are enrolled in a Systematic Investment Plan (SIP) or Preauthorized Deposit or Preauthorized Contribution that totals $100/month or more
  • You make three or more trades in the preceding quarter which incurred a commission
  • Your household accounts include a Registered Disability Savings Plan (RDSP)

$150 if you transfer in $25,000 or more and are a TD client.

HSBC InvestDirect

Commission Account Types & Investments Offered Fees & Minimum Deposits Perks

$6.88 per trade (minimum $50,000 in assets)

Or

$4.88 for active traders (150+ per quarter)

+ $1.25 for options

  • Cash
  • Margin
  • RRSPs
  • TFSA
  • RESP
  • RIF
  • Locked In Accounts
  • Stocks
  • Mutual Funds
  • ETFs
  • Fixed Income
  • GICs
  • Options

$25 per quarter for accounts with no trades (inactivity), or

$0 if you have more than $10,000 in your account

Make more than 1 trade per quarter

No fees for the first 90 days

Access to 20 global markets

Competitive Pricing

Tools and resources for planning retirement.

What I’m Looking For

I’m pretty small-time operation when it comes to investing.

Right now, I have an RRSP trading account and a TFSA trading account. I also plan on moving my kids RESP accounts to my new online broker in the near future. In the RRSP I hold Exchange Trade Funds. In the TFSA, it’s mostly dividend earning stocks.

The RESP is very low risk investments. With the government incentives, we already make 20% on the new money we invest every year into this account. Though I’m a small investor, I do plan on growing as big as I can before I decide my years are too golden to work.

The two main things I’m looking for are:

  • No quarterly fee with accounts that have $5,000 or more in them.
  • A low fee per trade. Anywhere around $9 a trade is my sweet spot for my DIY investing approach. (I typically make 2 trades per quarter…I know, huge mover and shaker!)

Related: Basic Tax-Saving Tips for Investors

Who Will Get My Business

The jury is still out, but it’s hard to argue with Questrade’s approach to having no annual fees (for RRSP & TFSA) and very low cost per trade.

In fact, I think no annual fees alone is a deal maker for people just wanting to start investing who have a few dollars to make a few trades within a TFSA or other savings vehicle. I’ll keep you posted on my final decision.

What is your experience with discount online investment brokers? Anything you look for for your DIY investing approach?

Disclosure: Some links in this article may be affiliate links. We're letting you know because it's the right thing to do. Here’s a more detailed disclosure on how HTS makes money.

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Comments

Ken
Ken's picture

I have tried to take an interest in this for a long time now. I know how to save, but have always been low risk with my money.. Putting my RRSPS in safe investments with low returns.

I know many say that you need to take control of your money, and that a person needs to take an interest in this and do all your own investing.

That is from people that are interested in it however, I cannot see myself ever spending even more time doing something I dont want to do.

After decades at BMO getting nothing on returns, I have recently moved to Investors Group. Inlaws have used them for decades and seem to be fine, and so does my wife. Her returns even after fees are way higher than mine.

Every thread I read on letting places like this handle it for you they say you are basically giving them a third of your investments or even half in fees.

I dont know about that, and I tell you what, i dont care anymore either. Im at the halfway point in my life now, been saving since Ive been 18. Have a work pension, another pension from another province thats sitting, and my own personal investments, RRSPs and TFSA, and RESPS for 3 kids.

With the craziness of life, this is just one thing I do not want to add to the stress of my life. Good or bad, all depends on your persepctive.

March 20, 2018 @ 11:59 am
Anil Ramji
Anil Ramji's picture

I have been using Questrade for the last ten years and I am very satisfied with their service. The trading platform is very simple and user friendly. Customer support is excellent. When you use their chat feature, the response time is minimal and in all cases my concerns and questions were responded in a very efficient and professional manner.

March 20, 2018 @ 12:10 pm
Allan
Allan 's picture

I've got my investment account with Scotia bank iTrade, also I'm a senior. I wonder what the charges are to move accounts to another provider. I'm paying $25. a trade.

March 20, 2018 @ 12:12 pm
Chris
Chris's picture

I know my current place charges $125 to move my account, but paying $25 a trade could really add up quick! I would call Scotia Bank and talk to a customer service representative to see if they have any other solutions.

March 21, 2018 @ 1:03 am
Kristina0713
Kristina0713's picture

Do any of these companies allow DRIP-ing of dividends from US stocks? (Dividend re-investing)
BMO Investorline does not.

March 20, 2018 @ 12:28 pm
Marni
Marni's picture

Exactly. Investorline does not. I've been calling them about this for four years now and they keep giving a vague answer like we're considering it but they never do anything. This can be hundreds of dollars a year if you have to pay to reinvest every time you get dividends enough to buy another share or several.

March 20, 2018 @ 12:32 pm
Chris
Chris's picture

As far I can tell, they all offer DRIP but only for Canadian companies offering dividends. The only one I couldn't find DRIP offered was with IB (which looks like a real contender as well for an online broker fee-wise).

DRIP wasn't something I was too concerned about as I have never done direct re-investment plans with my dividends before.

March 24, 2018 @ 1:41 pm
Robert
Robert's picture

Missing one the best online Broker with an incredible platform ; Interactive broker.
But they do not sell everything : No mutual fund.
They are not for everyone

March 20, 2018 @ 12:30 pm
Stephen Weyman
Stephen Weyman's picture

Good point, we'll include them next time if we do a future update to this article.

March 20, 2018 @ 2:24 pm
Marni
Marni's picture

Since when is BMO Investorline $6.95 per trade? It's $9.95 or did they make a change very recently?

March 20, 2018 @ 12:30 pm
Maria Weyman
Maria Weyman's picture

Thanks for pointing this our Marni. Somehow we duplicated CIBC's fees in the BMO fees column by mistake when processing the article in the blog. We're making the correction now.

March 20, 2018 @ 12:45 pm
Maria Weyman
Maria Weyman's picture

Correction made, thanks again.

March 20, 2018 @ 12:50 pm
Basil Hendrickson
Basil Hendrickson's picture

What is your opinion on EQUITABLE LIFE?

March 20, 2018 @ 12:49 pm
Larry Miller
Larry Miller's picture

Regarding info on Questrade, I just received the following regarding fees.

"I can definitely explain to you the fees we have: The commission structure it is a penny per share where the minimum $4.95 and max is $9.95. The only other fee you have to consider is that you have to place one trade per quarter other wise you will be charged $24.95 or if you have more then $5000 inequity you do not have to worry about."

I think in your article you indicate a minimum of $1000 to avoid fees, it appears to be $5000 if I read Questrade response correctly.

March 20, 2018 @ 1:07 pm
Stephen Weyman
Stephen Weyman's picture

You're correct Larry. Their big header image talking about fees on this page mentions $1,000 but the table states the inactivity fee is only waived for $5,000 in assets. I think the $1,000 must be the minimum amount of money required to open an account but it is very easy to confuse given that they don't say that explicitly.

The table will be updated to reflect this.

March 20, 2018 @ 1:17 pm
Richard S
Richard S's picture

You should add Virtual Brokers to the list. Very competitive fees and ETF's are free.

March 20, 2018 @ 2:29 pm
Geoff
Geoff's picture

Another plug for Interactive Brokers. They cost WAY less than everyone else. Been using them for years, saved over $1000.00 in brokerage fees (yes, I'm somewhat active). They only charge $1.00 per 100 shares for purchase and only $1.50 ea for Canadian option (and I think $1.00 for U.S. ones). They also have a good support.

March 20, 2018 @ 2:37 pm
Patrick
Patrick's picture

The thing that bothers me is Thinkorswim in the USA offers $1.25 option trades, whereas TOS customers in Canada have to pay the $9.99 +$1.25! And Tastytrade is even cheaper, but not available to Canadians, because they can't offer us the cheap trades. I think we are being ripped off!

March 20, 2018 @ 2:54 pm
Richard
Richard's picture

I have been a client of TD and RBC Direct Investing for 5+ years. Each has certain pluses and minuses. TD has a great research site but we're slow to introduce D series funds or their own ETF's (not that the ETF's were much issue with the number readily available). RBC was one of the early brokers to offer their own D series funds but they also don't offer Mawer mutual funds which have some of the lowest MER's in the business. Both brokerages offer stock and ETF trades in the $10 range. I'm currently considering Questrade due to their lower trade fees but I'm not a frequent trader so stiill debating whether to bother.

March 20, 2018 @ 3:32 pm
Lana
Lana's picture

I have been looking into this whole mutual fund/investment change. My big question is, I am with Tangerine funds at the moment with 1.07% I have been looking into WealthSimple etc. as well,and there is no way I have the abilities to pick my own ETFs etc. So again, my question, I see others making alot higher gains with PI Financial, and Assante as well and they have higher fees, but their bottomline is still higher than with the lower fee robo advisors, or Tangerine fund, so really the lower fees isn't getting you the same gains so you get what you pay for? It really is causing me much frustration in trying to figure whats best, I have low income, but will have investment property to sell and put somewhere in a few years as well as have savings that should be working more for me than high interest savings as well as the right place for my TFSA that are not making much in Tangerine. i am 60.

March 20, 2018 @ 8:55 pm
Stel
Stel's picture

If moving into DIY it makes sens to get stocks with DRIP in your own name, outside the broker.
Any info where you can buy only one share of Canadian stocks with DRIP?
Thanks, stel

March 20, 2018 @ 9:51 pm
Patrick
Patrick's picture

There is a share exchange board at DRIP Investing Resource Centre. Lots of resources on that website for dripping through a transfer agent. People post single shares all the time to help get people started.

March 25, 2018 @ 12:40 pm
Marpy
Marpy's picture

I have been dealing with 2 of the above for many years now and with a number of full service brokers for years before that.. regardless of having a discount or full service broker, you have to pay attention to your account and the investments in it. i have had to call them up numerous times because they were totally missing the boat on stuff. The latest with respect to rights being issued by a stock I own that trades on the New York exchange. (Quickly - rights give you the ability to buy shares at a fixed price for a fixed period of time. you can either trade them or use them to buy the shares. Once the time is up and they expire, they are worthless). The rights my company issued expired after a month. I waited patiently for these rights to show up in my account and after 2 weeks, I called the discounter up to see what was going on. They were totally clueless to the situation. A couple of days later, they showed up in my account and I could deal with them. I know of 3 other people who missed the boat on these rights and one of them had a full service broker. Bottom line is that you have top pay attention and monitor your own investments.
When looking for a discounter, I would also put a heavy weighting on customer satisfaction. When you get into a good sized account, the trading costs and fees become a small percentage of the portfolio and the ability to get good service and have problems dealt with promptly and fairly become more important. Even for smaller accounts, poor service can really sour the situation.

just my 2 cents based on looking after my own investing for a long time.

March 22, 2018 @ 1:20 pm
Barry
Barry's picture

I started investing with Tangerine funds, but recently moved to TD Direct Investing using their e-series funds. Following the Canadian Couch Potato recommended fund portfolio, it's easy, no fees (providing you set up a regular contribution) and requires very little "hands on" time. Just need to re-balance the funds about once a year. I did the set up completely on-line and only had to visit a TD branch to provide a void cheque for my bi-weekly contribution. It was relatively painless and the service from TD was excellent (I don't bank there at all and was never even asked or approached about buying other products). I would call it a good intermediate step to branching out to more DIY investing, although for the small difference in MERs between TD e-series funds and ETFs, it may be worth while paying the little bit extra for the automation.

April 06, 2018 @ 12:30 pm
George
George's picture

Hello guys,
Im a fulltime professional trader based in Quebec.
The question here is what you guys are trying to accomplish. If you want to trade international markets while based in Canada, you need to hook up with IB. IB looks cheap at first sight but comes with pretty nasty inactivity fees even when you just go on a holiday for 4 weeks. Do you really need to trade European and Asian markets and individual equities overthere?
TD Direct investing is the best platform available to Canadians who want to trade US stocks and US stock options, if that is what you want to do in order to diversify. I am told by pretty high ranking Canadian money managers from the big three that Canadian markets should not be traded by amateurs as Canadian stock prices are highly rigged and manipulated as volume is often not high enough on even prominent stocks to help prevent easy manipulation. Also, the quality of fundamental data readily available in Canada is of a lesser quality than on US equities which reflects weaker reporting standards.
If all you need is access to Canadian markets then I'd recommend CIBC but I'd always check the amount of 3rd party research that might be part of the packages by the different institutions.
Canadians can trade US futures via IB or (much cheaper) AMP Futures among others. AMP offers no Options on Futures though, which is a big negative for professional futures traders who often hedge out overnight risk by using options.
One thing needs to be said loud and clear: A broker has a conflict of interest in that they are interested primarily in using your account to balance theirs and to take your money from you. Period.
You must be aware that it is best practise to virtually ignore everything THEY have on offer for you beyond their actual software and charting tools. Now, when it comes to charting tools TD offers the best of all discount brokers on Think or Swim (ToS).
Ignore everything anybody tells you about anything for the industry does not offer a level playing field and do ignore what they want you to buy.
Investing is for professionals. It is a profession and it is hard when done properly, so is trading.
You can become professional or come close enough for your purposes, but you will have to spend some dollars and time on education and for independent data to get there. Much data can be found for free, but some you must be ready to pay for. Good education is not easy to come by and investing and trading literature is mostly crap written by charlatans with few exceptions.
Try to find some help on twitter or stocktwits for there are many professionals who might help by answering a few questions and don't follow guys who do not answer questions.
Last not least a word on money: if you don't like money, you will never have any. If you like to spend money and incur debt, you will never have any money to speak of. Go cash, avoid credit, and cellphones, and don't buy subscriptions. Start saving every dollar you can and pay off any debt you might have asap. Don't buy anything you can not afford to pay for in cash. Good luck!

August 29, 2018 @ 8:42 pm
Alex
Alex's picture

Hello George,

I was reading yet another review on Canada's best platforms and the info is always about trade fees and minimum $$$ in account. I agree with you that this is not the most important to consider.

I do trade from RBC's platform and I am ready to go to the next step and trade with real info, charts, decent tools( parametrable fibonaccis, ttm squeeze, vwap etc, done extensive research) and the info is hard to come by.

Also I would mostly trade us stocks on the Nasdaq and Nyse: knowing that would you still recomend Td direct investing(not think or swim) or Interactive brokers? I am a bit fed up with everybody basing their decisions on price per trade, it is the platform easy of use, speed and tools that are important.

And if by chance you answer me what do you do to avoid fees when transfering us funds to canadian and making withdrawals? Norbert's gambit? Other method?

cheers

Alex

March 23, 2019 @ 9:48 am
Alex
Alex's picture

...forgot to bring one important point: what about live market data?

March 23, 2019 @ 11:06 am

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