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Best Online Investing Brokerages in Canada (2021)

Step one for self-directed DIY investors is to open a discount brokerage service to allow you to invest on public equity and fixed income exchanges.

It is as easy as having an internet connection.  Anyone can get started.

From there, you will have to open a brokerage account. Many banks have options for brokerage accounts, and there are other third-party options available. Each brokerage offers different perks and have their own downfalls.

When you begin investing, the stock market can be daunting, and then to find the brokerage account for you can add to your stress. To ease your mind, we compiled a list of some of the most common brokerage accounts in Canada and analyzed them for you to find the right brokerage for you.  

Absolute beginner? This video course will show you how to get started with the easiest hands off investing method called index investing.

What Even is a Brokerage?

A brokerage account is an arrangement where an investor deposits money with a licensed brokerage firm, who places trades on behalf of the customer. Although the brokerage executes the orders, the assets belong to the investors, who typically must claim as taxable income any capital gains incurred from the account.

Most online brokers simply provide a secure interface through which investors can place trade orders and charge relatively low fees for this service. Brokerage accounts may also differ in terms of order execution speed, analytical tools, the scope of tradable assets, and the extent to which investors can trade on margin.

How To Open a Brokerage Account

Once you decide on a broker, you need to create an account and submit your documentation (ID, address, etc.) for verification. In the application process, you’ll probably be asked broad questions about your investment goals and experience.

Once your application is approved, you will be able to deposit money into your brokerage account. Deposits are usually made through electronic transfers from your bank account or your debit or credit card. As soon as the money hits your brokerage account, you can use it to buy securities.

And that’s where the fun begins.

So which brokerage will you use?

Questrade Logo

Questrade

Questrade is an online investing platform headquartered in Toronto, Ontario, operating since 1999. Today, the discount brokerage offers some of Canada’s lowest commissions on trading and investing currently available.

As a virtual brokerage, Questrade only operates online, meaning there are no branches or offices open to the public. This allows the discount brokerage to provide the lowest trading fees in the industry.

Questrade offers a variety of investment options that suit all risk profiles, ranging from low-risk investments like Guaranteed Investment Certificates (GICs) to more volatile options like Forex and the stock market.

Questrade has become incredibly popular as a low-cost option for passive investing as well. It offers its own robo-advisor called Questwealth Portfolios, which allows Canadians to purchase and trade Exchange-Traded Funds (ETFs).

What’s made Questrade stand out—perhaps even the reason they’ve caught your attention—is their incredibly low fees.

Most investors gravitate to Questrade because of their unbeatable low-cost fees. Recurring fees can add up fairly quickly for active investors, and since online investing platforms charge up to $10 per trade, the use of discount brokerages like Questrade is increasing in popularity among Canadians.

This chart provides a brief overview of Questrade’s fees and features. How investors are charged depending on the account that they open is explored in the next section.

Click here to get $50 in trade commission when opening a Questrade account.  This is an affiliate link to support Stratosphere and our work. Use code si50 at signup.

Pros

Questrade’s pros far outweigh the cons. Below, we’ll take a quick glance at the benefits and drawbacks the discount brokerage has to offer.

  • Low fees: Naturally, low fees are the staple quality of this discount brokerage. Questrade has the best fees out of any online brokerage in Canada.

  • No annual fees: With the lowest fees in the country, Questrade also comes with no annual fees. Many of Canada’s online brokerages come with annual and sometimes even quarterly fees. Questrade comes with no yearly, monthly, or quarterly fees.

  • Online platforms and mobile app: Questrade offers a very fruitful online experience for customers. As an online brokerage, Questrade offers three virtual platforms: IQ Web, a browser-based trading platform; IQ Edge, a dedicated desktop program; and the Questrade Mobile App.

Cons

Nothing in life is perfect. Below are a few drawbacks that come with using the discount brokerage.

  • Quarterly Inactivity Fee: For accounts under $1,000, Questrade charges $24.95 if no trades are made within that quarter.

  • Minimum Balance Requirement: Opening an account with Questrade requires a minimum balance requirement. Minimum investment requirements vary from account to account. For example, opening certain accounts requires a minimum investment of $1,000.

  • Customer support can take a while on the phone. Chat option works better, though.

WealthSimple Logo

WealthSimple

Wealthsimple Trade is an online brokerage service that allows you to buy and sell thousands of stocks and ETFs on popular Canada and U.S. exchanges without paying a fee.

Until now, purchasing or selling a stock or ETF was going to cost you anywhere from $5 to as high as $30 per transaction. 

While discount brokerage platforms like Questrade and Virtual Brokers offer commission-free ETFs trading on the buy-side, you pay a fee (up to $10/transaction) when you eventually sell.

For me, the lack of desktop web application is very annoying.  This service has potential, but it is a little early still.

Pros

WealthSimple Trade is a pretty good option, however there are a few drawbacks which outweigh the pros in my opinion.

  • No trade commissions

  • Quick customer response times

Cons

Although there are a few cons, they might not be that bad for some investors, and possibly irrelevant for some people

  • Some companies are not purchasable on the platform yet, such as the well known Disney stock.

  • High foreign currency exchange.

BMO Graphic

BMO InvestorLine

BMO InvestorLine is a good fit for beginners and experienced investors alike. It offers a number of investment products that you can buy or sell quickly and easily with the click of a mouse. It also promotes a good selection of research tools to help you build your portfolio and track its progress.

This platform may be a particularly good resource for you if you’re already a BMO customer. This is because you can use your BMO bank account to easily transfer funds into your BMO InvestorLine account to start making trades. You should also have a minimum of $5,000 available to open any non-registered account.

Pros

BMO offers a solid service with InvestorLine, and here are some of their highlighted pros.

  • Web interface

  • Plethora of research tools

Cons

BMO offers a bit for everyone, but they have a couple drawbacks that have been fatal to their business from some customers.

  • Certain account fees

  • Customer service

  • Mobile interfaces

  • Higher trading fees than non-bank services

CIBC Graphic

CIBC Investor's Edge

CIBC Investor's Edge rarely wins top prize when it comes to ease of use or comprehensiveness of their website. A somewhat outdated user experience and look and feel, together with the absence of US dollar denominated registered accounts certainly impoverishes the service on offer. Nevertheless, the broad range of instruments that one is able to trade in, the very low cost of trading involve, and the more than adequate mobile app and mobile responsive website makes CIBC Investor's Edge a solid choice among discount brokerages.

Non-registered investment accounts incur a fee of $100 per annum unless a minimum balance of $10,000 is maintained or if the account holder maintains at least one registered account. Selected registered accounts (RRSP, RRIF, LIRA and LIF) incur a fee of $100 per annum unless a minimum balance of $25,000 is maintained. There is no minimum balance required for either TFSA or RESP accounts.

There are no account-opening fees and no minimum account size. Transfer-out fees imposed by your previous brokerage – if you're transferring accounts to CIBC Investor's Edge – will be refunded up to a total of $135 for assets transferred if these have a value of $25,000 or higher. On the flip side, Investor's Edge will impose a $135 transfer-out fee if you decide to transfer your accounts to another brokerage.

Pros

Of the brokerages stemming from banks, CIBC has a decent resume.

  • Lower fees than other big banks

  • Simple interface, but clunky

  • Good mobile apps

Cons

CIBC comes with some average cons to balance their average pros.

  • Some account fees

  • Old interface aesthetic

  • No USD based accounts

Qtrade Graphic

QTrade Investor

Qtrade Investor is an online brokerage that strives to give you control over your financial goals. They do this by focusing on features that most investors need, such as easy-to-navigate online and mobile platforms, powerful research tools, and fast and knowledgeable customer support.

They combine this with some of the lowest fees in the industry to give you one of the best online brokerages available. In fact, according to their website: “Value and commitment to continuous improvement are the reasons why Qtrade Investor has been ranked among Canada’s very best online brokers for the past decade.”

Qtrade Investor also focuses on you being empowered to make your own independent financial decisions. They give you the research and support you need to be successful, but you’re still in the driver’s seat when it comes to making decisions. Their platform is where you’ll make your trades, and it has features such as:

Pros

Qtrade boats some attractive pros

·   Low fees

·   Stellar customer service

·   No fees or commission for mutual funds

Cons

With their ups, customers have some bouts with Qtrade

·   Hidden closing fees

·   Outdated interface

·   Annual fees

RBC Graphic

RBC Direct Investing

Is RBC Direct Investing a good broker? That depends entirely on how sophisticated the investor needs their broker to be.

If all they are doing is making the odd stock, mutual fund, or ETF purchase every once in awhile, then RBC Direct Investing will meet their needs. However, if there are more advanced needs beyond that then it would be advisable to people to look elsewhere. The clunky interface and multiple clicks required to complete the most basic tasks will be frustrating for active traders and investors.

RBC Direct Investing does what it is supposed to do; buy and sell stocks, mutual funds, ETFs, GICs, and monitor a portfolio. However, for such a large bank, the trading platform should focus on becoming more efficient and easier to navigate.

Pros

RBC lacks in terms of pros

·       Attached to RBC bank accounts

Cons

Majors cons come attached with RBC Direct Investing

·   Slow interface and software

·   Outdated interface (being overhauled, though)

TD Graphic

TD Direct Investing

TD Direct Investing (formerly known as TD Waterhouse Discount Brokerage) is one of Canada’s largest discount brokerages. As a bank-owned online brokerage, it is able to offer clients the ability to manage multiple accounts (including personal banking) and products via the TD online platform. What makes TD Direct Investing stand out relative to most of its bank-owned peers is the amount of education it provides as well as the diverse set of trading platforms. Specifically, TD Direct Investing offers web-based and desktop platforms for active traders as well as longer term investors.

What makes TD stand out from other platforms is its expansive research tools and data, as well as educational videos they provide to help new investors. They also provide a clean and elegant interface which trumps almost any other brokerage account. Their mobile apps are very good as well, just not as expansive as their web app.

Pros

TD holds some relatively strong pros for a banking brokerage account.

·       Elegant interface

·       Expansive tools

·       Education centre

·       Ease of use

Cons

TD doesn’t come with many cons if you’re cool with paying $10/trade.

·       Higher commissions

InteractiveBrokers Graphic

Interactive Brokers

Interactive Brokers has always been a great choice for active traders, especially those who can move into the broker's cheaper volume-pricing setup. Now, with the availability of free trades with IBKR Lite, even casual traders might find Interactive Brokers a strong contender. But beginner investors might prefer a broker that offers a bit more hand-holding and educational resources.

Pros

Interactive Brokers has some very appealing pros.

  • Fractional shares

  • Low commissions

  • Research material

Cons

With their appealing pros, comes a few downsides.

  • Very complex fee structure

  • High inactivity fees

  • More suited towards experienced investors and active traders 

The Bottom Line

Picking a brokerage account that’s right for you can be tricky. It is a very important aspect of your investing journey, but it can be hard to know which one is best.

With our comparisons, we hope we shed light on the different options available to investors. With this knowledge you should be ready to dive into your investing journey and start building long term wealth.

At Stratosphere, we use Questrade. The free ETF buys and $4.95 trades make Questrade one of the best options out there. With this link, you will get $50 in trade commission when opening a Questrade account. This is an affiliate link to help support Stratosphere with our work.