The Ultimate Guide to Canada’s Online Brokerages in 2019

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best online brokerages CanadaWhether you’re investing using a robo advisor or financial advisor, you probably realize that you’re paying a chunk of change in fees and add-ons. To cut costs, you can manage the money yourself by signing up with one of the best online brokerage in Canada like Questrade (which is our top pick). To help you get started, we’ve put together a handy guide detailing Canada's best online brokers, as well as some tips on how to choose the best one for you.

What is an online broker?

An online broker lets you buy and sell stocks online within your trading account. They are often called “discount brokerages” because this method of buying and selling stocks is more cost effective than a traditional brokerage.

How do online brokerages work?

Online brokers operate on the same principle of investing for growth as mutual fund managers and robo advisors. Online brokers offer investment options that are both higher risk and higher return than savings accounts or GICs, and these higher returns help you save for retirement over the long term.

Where online brokers differ from mutual fund managers and robo advisors is how they deliver that service. Mutual fund salespeople and robo advisors rely on a questionnaire and sometimes an in-person meeting to help them determine your ideal asset allocation, and then build a portfolio for you.

It’s all DIY with online brokers. Online brokers leave asset allocation and portfolio building to you, and instead of offering oversight and advice, they offer a low-fee environment for you to invest your money.

Online brokers are ideal for investors who follow the Couch Potato Portfolio strategy because it lets them build their ideal portfolios easily with a handful of low-cost ETFs. You can use your online broker as little a four times per year to build your portfolio and rebalance your asset allocations.

Summary of Best Online Brokerages in Canada 2019 

BrandBest For
1. QuestradeBest for Low Fees
2. QtradeBest For Customer Service
3. Scotia iTradeBest for Larger Deposits
4. TD Direct InvestingBest for Passive Investing Approach
5. BMO InvestorLine Self-DirectedBest for User-Friendly Trading Interface
6. Virtual BrokersBest for Research

1. Questrade: Best for Low Fees

Questrade is one of the lowest cost online brokerages in Canada. They charge no annual fees no matter what your account size, and you don’t pay any fees to purchase ETFs. This means that you can build an ETF based portfolio for $0 by using Questrade. Their other trading fees range from $4.95 to $9.95, and their account minimum is $1,000. If you transfer your RRSPs or TFSAs from another institution, Questrade will cover your transfer fees.

Questrade offers a variety of platforms to help you trade, along with a mobile app that is responsive and easy to use. The Canadian Investment Protection Fund covers Questrade, so your money is in safe hands. Questrade has been operating in Canada for 19 years, and with over 30,000 online account sign-ups in 2018, they’re one of Canada’s fastest growing brokerages. It’s why Questrade is our top pick for the best overall online brokerage in Canada. Start investing with Questrade

What We Like:

  • Lowest trading fee
  • No Annual Fees
  • Free ETF purchases
  • Pays transfer fees
  • Multiple trading platforms
  • Solid reputation in Canada
  • Young & Thrifty's promo: Start investing and get $50 in free trades

What We Don’t Like:

  • Maintain minimum account balance of CAD$5,000 or make one trade to avoid quarterly inactivity fee of $24.95

Get started with Questrade or read our full Questrade review.


2. Qtrade: Best For Customer Service

Qtrade is a good alternative to Questrade and has a reputation for amazing customer service. The company is trustworthy too: operating since 2001, Qtrade has $11.5 billion in assets and is a member of the Canadian Investor Protection Fund and Investment Industry Regulatory Organization of Canada.
If you’re interested in purchasing mutual funds yourself, Qtrade is one of the few discount brokerages with the ability to do so – and you won’t pay any fees or commissions when buying them.
Maintaining an account with Qtrade is slightly more expensive than Questrade, but still very cost effective, setting you back $100 per year for RRSPs and TFSAs with less than $25,000 in combined assets. You’ll pay $8.75 per trade with Qtrade, and there are no account minimums. If you incur fees when transferring your assets to Qtrade, they will cover up to $150.
To better understand what you get with Qtrade we suggest to read and compare Qtrade vs Questrade in our review.

What We Like:

  • Reasonable fees
  • Mutual fund purchases
  • Stellar customer service
  • Pays transfer out fees

What We Don’t Like:

  • Fees for accounts smaller than $25,000

Get started with Qtrade


3. BMO InvestorLine Self-Directed – Best for User-Friendly Interface

BMO InvestorLine is an excellent choice for anyone looking to get started with an online discount brokerage but wants an intuitive and informative online and mobile platform. BMO InvestorLine’s user-friendly portal, along with their impressive library of third-party research and solid customer service will help you invest with confidence whether you are a seasoned investor or a complete beginner.

BMO InvestorLine isn’t the least expensive discount brokerage, with fees on accounts under $25,000, and fees to purchase ETFs, but their zero minimum balance requirement and award-winning platform are enough to overcome the drawbacks. Read full review

What We Like:

  • Excellent online and mobile app
  • Great third-part research
  • Excellent customer service
  • Zero minimum account balance for RRSPs and TFSAs

What We Don’t Like:

  • Fees on ETF purchases
  • $100 for account balances less than $25,000

Get started with BMO InvestorLine


4. Scotia iTrade – Best for Larger Deposits (Over $50,000)

Scotia iTrade is the online brokerage arm of the Bank of Nova Scotia and is a good choice for investors who want to keep money with an institution with name recognition. The bank has a long history in Canada dating back to 1837 and has hundreds of brick-and-mortar branches.

Scotia iTrade recently re-structured its fee system, making it way more affordable than it used to be. The new fees start at $9.99 per trade and are reduced to $4.99 per trade if you make more than 150 trades per quarter.

You’ll also pay account fees when you open RRSPs and TFSAs through Scotia iTrade. Expect to pay $100 until your accounts reach a $25,000 balance; higher balances pay no fees. You can build a portfolio of ETFs with Scotia iTrade using their 49 commission-free ETFs. This platform isn’t the most cost-effective for investors with small account balances.

What We Like:

  • Part of an esteemed Canadian bank
  • Good customer service
  • Fees are manageable for balances over $50,000
  • Scotia iTrade ETFs are commission-free

What We Don’t Like:

  • Trading fees eat into smaller accounts (under $50,000)

Get started with Scotia iTrade


5. TD Direct Investing – Best for Passive Investing  Approach

Another big player in the online brokerage market is TD Direct Investing, a division of TD Bank. This platform offers an excellent way to build a low-cost passive investing portfolio also offers trading fees that are in line with the smaller online brokerages. Also, their customer support has gotten rave reviews.

TD Direct Investing has a lower minimum account threshold than other large online brokerages, meaning that an account balance of $15,000 will waive the $100 account fees. There is no minimum account size when opening a TD Direct Investing account, and you’ll pay basic trading fees of $9.99 per trade. Read full review

What We Like:

  • Excellent for couch potato investors
  • Moderate trading fees

What We Don’t Like:

  • $25 per quarter on accounts smaller than $15,000

Get started with TD Direct Investing


6. Virtual Brokers – Best for Research

Virtual Brokers is one of the most competitive discount brokerages in Canada, with offerings on par with Questrade and Qtrade. Virtual Brokers offers free ETF trades, which is perfect for index investors, and they charge $9.95 for trades on regular stocks. There is a $25 per quarter fee on accounts with balances under $5,000.

Virtual Brokers has several trading platforms to choose from and a huge research center to help you stay ahead of the curve when making trades. Read full review

What We Like:

  • Free ETF purchases
  • No fees for accounts over $5,000
  • Excellent research tools for beginner to advanced investors

What We Don’t Like:

  • $1,000 minimum account balance

Get started with Virtual Brokers


Comparing the Best Trading Platforms in Canada

Online Investing PlatformAnnual FeesFree ETF TransactionsBasic Trading FeesPaid Transfer FeesMore Info
1. Questrade$0Yes$4.95 - $9.95YesLearn More
2. Qtrade$0-$25,000 = $100
$25,000+ = $0
Up to
100 trades =$0
$8.75Up to $150Learn More
3. BMO InvestorLine
Self-Directed
$0-$15,000 = $100
$15,000+ = $0
No$9.95NoLearn More
4. Scotia iTrade$0-$25,000 = $100
$25,000+ = $0
Limited$4.95 - $9.99NoLearn More
5. TD Direct Investing$0-$15,000 = $100
$15,000+ = $0
No$9.99Up to $150Learn More
6. Virtual Brokers$0-$25,000 = $100
$25,000+ = $0
Yes$9.99Up to $150Learn More

How to Choose a Portfolio with an Online Brokerage

When using an online broker, you’re the boss: you make the investment decisions and choose what to purchase. While you can purchase individual stocks and bonds through your online broker, most DIY investors opt to build their portfolios out of ETFs. This strategy lets you build a highly diversified portfolio without having to go to the trouble of purchasing dozens of individual stocks.

These Canadian couch potato model portfolios can help you get started. Each includes different asset mixes, and you can pick one that's best suited to your risk tolerance. For instance, you could build a portfolio with ETFs that is 60% equities and 40% fixed income:

  • BMO Aggregate Bond Index ETF (40%)
  • Vanguard FTSE Canada All Cap ETF (20%)
  • iShares Core MSCI All Country World ex Canada Index ETF (40%)

If you invest your money through an online broker in these three ETFs, you will have a globally diversified balanced portfolio.

Why open a brokerage account?

What is the benefit of purchasing your own investments directly and rebalancing manually when your investments slip out of their ideal asset allocation? There is one thing that draws in DIY investors: low fees.

The reason that most DIY investors choose to work with an online broker is to minimize the management expense ratio (MER) they pay on their investments. MERs are the management fees associated with individual funds. MERs are expressed as a percentage of your assets and vary depending on the style of investing you choose.

Mutual funds in Canada have some of the highest MERs in the world, at an average of 2.5%. Robo advisors offer a lower MER, usually less than 1%. DIY investing offers the lowest MER possible. The portfolio above has a MER of 0.14%.

The differences in these fees may not seem like much, but they can erode thousands, or even hundreds of thousands of dollars from your portfolio, given a long enough time horizon.

What to look for in an online broker

When choosing an online broker, it’s important to consider how you’ll use the online broker and choose the broker that will best suit your needs. Here are some examples of factors to consider:

Trading Fees

If you plan to build a passive index investing portfolio using only ETFs, choose an online broker that offers free ETF purchase and low overall fees. In contrast, if you are planning to be a high-volume trader, making up to the minute decisions on which stocks to purchase, a discount brokerage with high-quality software platforms and access to third-party research should be a priority.

Account Fees

Consider your account size when choosing an online broker. If you have a portfolio that is already over $25,000, you’ll be unlikely to pay fees at any of the brokerages listed. If you are just starting out and only have $500 to invest, some online brokers will not be an option due to account minimums, while others will eat into your returns with steep quarterly fees.

Customer Service

If you're new to investing online, choosing an online broker with excellent customer service and an easy to use interface should be a priority since you'll probably have a few questions at the beginning. Seasoned investors may be able to forgo good customer service in favour of excellent research and trading platforms.

Per Trade ETFs

If you’re planning to build your portfolio using ETFs, it’s important to pay attention to how much you’ll pay every time you make an ETF trade. Keeping your per trade fees low is key to minimizing your overall fees, especially if your portfolio is small.

Per Account Fees

Many online brokers charge quarterly fees on smaller accounts, usually around $25 per quarter on accounts smaller than $25,000. If you have a modest nest egg, you should choose an online broker that does not charge these fees, because they will significantly erode your annual returns.

Free ETF trades

For portfolios built with ETFs, the ideal scenario is an online broker that does not charge for ETF purchases. There are several online brokers on this list that offer free ETF purchases, and some offer free ETF trades on certain ETFs. Usually, you’ll still have to pay to sell your ETFs, but you’ll usually only need to do this a maximum of two or three times per year.

Reimbursed transfer fees

When you transfer funds from a TFSA or RRSP at another financial institution to an online broker, the original institution will often charge a transfer fee to move your money. Some online brokers will pay these fees.

ECN fees

ECN fees are fees that you pay when you place an order with an online broker for either stocks or ETFs, and that order is fulfilled immediately instead of waiting for the price of the stock or ETF to reach a certain point. The fees originate from the exchange networks that fulfill the orders and are usually a fraction of a cent per share. ECN fees vary from broker to broker, and could add a few cents to a few dollars on your purchases. For average investors, ECN fees are not significant, and you shouldn’t worry about them.

Financial Advisor vs. Online Broker vs. Robo Advisor

Preference/SituationWhich to ChooseWhy should you choose this digital platform?
You like doing your own research on investingOnline brokerageWhile online brokerages have customer service lines to assist with using their trading platform, you won’t receive investment advice if you go the DIY route. Some online brokers offer market research and investment monitoring, but that functions to help you make better investment decisions – not to make that decision for you.
You have a small amount of money to investOnline brokerage or robo advisorSome robo advisors and most online brokers have low or no account minimums, while financial advisors can require account minimums of $5,000 or more.
You need a high level of personal interactionFinancial advisorFinancial advisors offer a high level of personal interaction that many Canadians find comforting and usually involves a 30-minute conversation in person at a brick and mortar branch or office. But keep in mind that human interaction has a higher price tag.
You like a little personal interaction and/or investing adviceRobo advisorWith a robo advisor, you’ll complete a questionnaire to identify your financial needs and goals, and you can book a free call with one of their wealth advisors if you need that extra hand-holding. But there is no brick and mortar branch, and you won’t have an assigned wealth advisor.
Low fees are your #1 priorityOnline brokerageLow fees are the primary driver behind the popularity of online brokers
You have a unique financial situation or goalsOnline brokerage or financial advisorOnline brokers are highly customizable since you’re the boss, but choosing the right investments will require some research on your end. A financial advisor is trained to take special circumstances into account and choose the right portfolio for you – but that comes with higher fees.
You are comfortable with  re-balancing your portfolio at least four times a yearOnline brokerageIf you’re comfortable with re-setting your portfolio back to the original asset allocation in your plan, then go with an online brokerage. If not, a robo advisor can do it automatically for you.

 

The Bottom Line

When it comes to getting the most out of your portfolio, the best option is to invest your money yourself, cutting out the middle person and vastly reducing the fees you’ll pay over the lifetime of your investments. While using an online broker to invest your money may seem intimidating at first, a simple portfolio built out of ETFs will give you the growth needed to reach a comfortable retirement, while keeping you in the driver’s seat of your money.

All of the online brokers listed above are good choices, but each has strengths and areas for improvement. However, if you’re looking to take the hassle out of DIY investing plus save big on fees, Questrade is your best bet and our top choice for the best online brokerage in Canada. Ultimately, the right one for you depends on your financial situation, but it’s not a question of if you should switch to an online broker to manage your money – it’s when.

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Jordann Brown

Jordann Brown is a millennial money expert and personal finance blogger based in Nova Scotia, Canada. Jordann is the founder of the popular personal finance blog, My Alternate Life, and she frequently appears as an expert in Canada media.

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22 Comments

  1. raelph houghton on March 30, 2019 at 11:31 am

    Does a person have to be a resident of Canada
    or
    a citizen of canada

    to join one of the brokerages above?
    thanks
    Rae



  2. Jessica on April 16, 2019 at 2:26 am

    Thank you so much for such a great article and helping me understand different types of Online Brokers !



  3. Jacques LaFitte on April 19, 2019 at 2:07 pm

    I’m a QTrade client. If QTrade is best for customer service them the Canadian online brokerage world must be in a sorry state.



  4. G. Carline on April 22, 2019 at 1:19 pm

    According to CIPF’s website, QTrade is no longer a member as of 2018-07-01



  5. Lisa Jackson on April 23, 2019 at 9:06 am

    Credential Qtrade Securities Inc. is listed as a member on the CIPF’s website.



  6. Jackie W. on April 29, 2019 at 2:33 pm

    I have had a QTrade account for several years and thier customer service USED to be exceptional – however since they were purchased it has been absolutely atrocious. I am really disappointed and am planning on moving my account somewhere with at least average customer service. This really should be updated in future reports because it has been bad for a while now.



  7. Courtemc on May 1, 2019 at 7:45 am

    Hi Jordann, thanks for the timely article.

    Wanted to share my experience with Virtual Brokers as it may serve as a cautionary tale for other DIY investors.

    I built my portfolio using TD Waterhouse. It is all ETF’s super low cost. Given my portfolio size there were no annual fees, just buy/sell costs. I rebalance twice a year so I pay ~$500 a year in fees. I’d read so much positive press on Virtual Brokers, I thought I’d transfer my accounts there as they do not have ETF buy/sell charges.

    I initiated the process on Feb 24th, tick tock, tick tock. As of today, though all the accounts are set-up at VB (me RSP, LIRA, TFSA, investment + hubby RSP and TFSA = 6 accounts), only two of the six are transferred.

    The service at TD was excellent. The service at VB though very polite is highly ineffective, and I qualify for their Premier service. Was the service at TD worth $500 a year? I am starting to think maybe it was.



  8. R Nalluri on May 1, 2019 at 3:50 pm

    Hi, Virtual Brokers Changed their fee structure. Please see
    Simple Commissions
    with an added Bonus
    We offer a standard commission plan for beginner and intermediate investors. Pay as low as $1.99 per trade with our new commission structure. But what makes us a great choice is that we offer ALL ETF’s Free to purchase!



  9. Anthony wolseley Wilmsen on May 13, 2019 at 6:20 am

    I´ve been a client of Questrade for years. I like their platform, but now I am disgusted they are proposing to charge me a $25 inactivity fee if I do
    not trade for 3 months. I like to make my investment decisions on fundamentals, not on having to avoid charges. I´m looking for a new broker
    that understands that. As there are none in Canada, maybe now is the time for me to transfer to Asia or USA.



  10. Lisa Jackson on May 13, 2019 at 8:30 am

    Hi Anthony,

    FYI, you can avoid Questrade’s inactivity fee if you have at least $5,000 in combined equity in your account. I hope this helps!



  11. Rose Gale on June 13, 2019 at 6:00 pm

    I am looking for a discount Canadian broker that deals with Canadian stock exchanges and has no minimum deposit. Is there such a thing?



  12. Kumar A on June 18, 2019 at 11:26 am

    Can I invest in Mutual Funds also through these platforms ?



  13. Kumar A on June 18, 2019 at 11:46 am

    which platform to use to purchase Mutual Funds and Index Funds ?



  14. Jason on July 10, 2019 at 12:00 pm

    Good write-up — but what about Interactive Brokers Canada? I’m with BMO IL but as I understand it, IB has a smoking deal on currency conversion. Example: say you have $50,000 CAD and you want to convert that into USD. With BMO and other banks you would pay 1.6% or $800 CAD. IB on the other hand charges you 1*0.2 basis points or $2 USD, whichever is greater, so the FX fee is = 0.0001*0.2*$50,000 CAD = $1 CAD, therefore the minimum $2 USD charge would apply in that situation.



  15. Teceng on August 22, 2019 at 12:40 pm

    Hi, Thanks for the great information. I have a TD web broker account and I think 9.99 a trade is too much. Also on top of that paying a $30 monthly fee to get the advance screen (trade less than 30 trades a month). I am looking in to in Questtrade and HSBC. Can you please give your thoughts. And if you can you comment on streaming package, level II us and Canadian packages, prices, etc.
    Thank You,
    Teceng



  16. Gary Cralle on August 27, 2019 at 10:33 am

    Are there any discount Canadian web brokers that will hold warrants, debentures and non-traded BCFs as part of a portfolio?



  17. Ray on October 1, 2019 at 9:34 pm

    The Scotia itrade pricing is incorrect. Their fee is $9.99 standard and high-balance/active trader fee is $4.99



  18. Lisa Jackson on October 4, 2019 at 9:56 am

    Hi Ray,

    Thanks for alerting us! The fees that are listed in the article are from about a year ago. The new fees do indeed start at $9.99 per trade and are reduced to $4.99 per trade if you make more than 150 trades per quarter. I’ll update our article. Thank you!



  19. Lisa Jackson on October 7, 2019 at 7:32 pm

    Hi Gary,

    Questrade allows you to trade warrants and rights, notes and debentures, and non-DTC eligible securities. Here’s a link to the page on their website that lists these items and their cost: www.questrade.com/prici…ransaction



  20. Lisa Jackson on October 7, 2019 at 7:37 pm

    With Questrade you can access level 2 quotes and data (Canada and U.S.) for $89.95 per month. You get a full rebate if you spend more than $399.95 in trading commissions, though.



  21. Lisa Jackson on October 7, 2019 at 7:47 pm

    Hi Jason,

    Yes, Interactive Brokers does have a terrific deal on foreign currency conversion rate at 0.2 bps.

    Their platform is more appropriate for advanced, frequent traders but the FX deal is intriguing.

    The one challenge is that it can take some time to wire money to IB to perform the currency conversion and then wire it back to your main brokerage. A lot can happen with the markets in that time, which could far outweigh any savings on currency conversion.

    A better option would be to use a broker that allows you to perform Norbert’s Gambit on the same trading day to reduce the risk of markets making a big move while your transaction is waiting to settle.



  22. Lisa Jackson on October 7, 2019 at 7:49 pm

    Hi Kumar,

    Yes, you can purchase mutual funds through these platforms but before you do it’s important to understand the way mutual fund fees work in Canada.

    Most mutual funds come with built-in trailer fees – ongoing commissions paid to a dealer representative (bank advisor) and the mutual fund company. For an equity mutual fund this is typically around 1% – and this drives up the total MER of your mutual fund to around 2% (average in Canada).

    The trailer fee is meant to pay for the cost of ongoing advice from your advisor, but in reality many Canadians are not getting ongoing financial advice. In effect, they’re paying the fee for no advice or service.

    Enter the discount brokerage. Here you can buy and sell stocks for fairly cheap (and no ongoing commissions), and buy ETFs for free (with Questrade) for a very small fee.

    What you don’t pay is a trailer fee for ongoing advice because a discount brokerage assumes you’re a do-it-yourself investor and don’t need advice.

    All that said, you CAN buy mutual funds through these platforms, but understand that you’re paying an embedded trailer fee for advice that you will never receive.



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