Online Discount Brokers Review For Canada And The US

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Written by Jin Won Choi on Aug. Last update on July 27, Man using trading terminal from Shutterstock. Unfortunately, answering this question can be complicated because each broker has his or her own unique way of charging fees. This means that different brokers will cost more depending on how the individual uses the account. In particular, I will look into three popular Canadian brokers - QuestradeInteractive Brokersand Virtual Brokers - to see which one of the three would end up being the least expensive, taking earnings into consideration.

Before we go on, I must disclose that I receive affiliate income from Questrade. The following list spells out the exact assumptions I used in my analysis.

Note that Virtual Brokers has different commissions best discount options brokers canada 2014, so I chose to use the "Classic" commission structure for comparison. Out of the three brokers, trading stocks cost the most with Virtual Brokers. This wasn't the case up until recently, when they used to charge just 1 cent per share for each trade. However, they have since changed commission structures to best discount options brokers canada 2014 more active traders.

Questrade's trading costs are half that of Virtual Brokers. That means a trade would only cost 1 cent per share if you buy between and shares. The biggest drawback of Interactive Brokers best discount options brokers canada 2014 their inactivity fee. If you pay less than 10 USD in trading fees each month, they will charge the remainder as an inactivity fee. Furthermore, they will charge this amount per account. Lastly, whereas it costs nothing to register an RSP account with either Questrade or Interactive Brokers, it can cost substantially more if you want to hold U.

While an RSP account that can only hold Canadian dollar investments costs nothing, an account that can hold U. Under Virtual Broker's old commission structure, determining which broker was cheapest wasn't so straightforward. But with the commissions changes, I believe Questrade is currently the cheapest out of all the major discount brokerage firms that offer registered accounts. Broker Interactive Questrade Virtual.

If you enjoyed this article, you might be interested in our free newsletter. Enter your email to get free updates. Best discount options brokers canada 2014 is the founder of MoneyGeek. He has a PhD in financial mathematics, and he worked at a top performing fund for 2 years. Virtual Brokers Questrade vs. This article has been updated to reflect prices as of July 27, Has 2 registered savings accounts RSPs. This fits the description of someone who makes a monthly contribution to buy one ETF a month.

I will also assume that each trade i. Will purchase stocks 4 times a year and sell stocks once a year. I will also assume that each trade consists of shares. A Canadian who wants to buy U. Which One Should You Choose? Broker Interactive Questrade Virtual Short url: Choi's commentary on current financial events All this is available for free. Join others and subscribe using the box below.

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A discount brokerage is a business, registered as an investment dealer, [1] that allow investors to buy and sell securities online. Discount brokerages, also called online brokers , typically offer both registered accounts and non-registered accounts. The types of products that can be purchased in these accounts include exchange-traded funds , stocks , bonds , GICs , mutual funds , and others.

Therefore, discount brokerage accounts are suitable locations to build investment portfolios for retirement or educational purposes. Discount brokerages usually allow their clients to trade for their own account with little or no action with a live broker.

In addition some brokers offer no-commission trades to their clients that hold a balance greater than a specific amount with them. Typically, discount brokers provide advanced electronic trading platforms which may be appealing to frequent and active traders but may deter some novice investors.

Discount brokers charge comparatively low fees but typically do not provide financial advice or guidance and provide instead a service aimed at self-directed investors. This article first compares discount brokerages to traditional full service brokers. Then the types of products offered by discount brokers are listed. Criteria useful to select a discount broker that suits your needs are given. Finally the article discusses the issues of dual currency support Canadian versus US dollars and what happens to your account if a broker goes bankrupt.

Discount brokers charge clients significantly lower fees than a traditional full service brokerage firm but without providing investment advice. Before the advent of discount brokers it used to be that only the wealthy could afford a broker and access to the stock market. However the development of internet and electronic trading helped to develop discount brokers, which allow investors to trade for much smaller fees. Traditional brokers in contrast will often provide financial advice and investment planning as well as related wealth management services.

When comparing discount brokers, commissions used to be the number one differentiator between online brokerage firms. When choosing a discount broker, you should also check their fee schedule to determine if there are annual fees associated with various accounts typically registered accounts and transfer and withdrawal fees. The discount brokers website will typically have a fee schedule available. The total value of assets generally is based on all accounts that have the same mailing address.

Because the commissions and annual fees have come down, recent broker reviews emphasize other selection criteria such as the ease of opening an account, ease of navigation, customer service, account reporting, market data and research, innovation, etc. Depending on which criteria an investor emphasizes, different brokers will be favored. Canadian investors can purchase securities on Canadian exchanges and US exchanges. When purchasing and holding securities trading on US exchanges, an important consideration is whether the discount brokerage supports both Canadian dollar accounts and US dollar accounts.

The level of support varies between the different discount brokerages. Over the years on Financial Wisdom Forum there have been a significant number of discussions about various aspects of discount brokerages. You might find it helpful to review some of these topics please note that there has been some minor editing of the topic titles.

A series of YouTube videos from Justin Bender for those who have never used a discount brokerage account:. Chequing account Savings account High-interest savings account. Credit card Line of credit Mortgage. Cash account Margin account. Low cost investing Mutual fund account Discount brokerage Full service brokerage Bank based Wealth manager Robo-advisor.

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This section requires expansion. Non-registered accounts Cash account Margin account.