In Canada, Money

Comparing Canadian Investing Account Options in Canada with Questrade, Royal Bank of Canada, CIBC, Bank of Montreal, TD Bank and ScotiaBank

So it can be confusing when you first start investing. Where do you invest? How? What account do you open? Which one is the best one for me right now?

My Brief Personal Investing History with Canadian Banks/Institutions

Employer Retirement Accounts – RRSP ~$33K

With my employer, I invested under Sunlife (I had no choice), and once I quit, I transferred all of that good Registered Retirement Savings Plan (RRSP) juju over to TD Bank under their E-Series accounts, as locked-in retirement accounts.

Locked-in retirement accounts means I CANNOT touch it until I am 65.

No ifs, ands or buts. I can’t even pay the 10% penalty fee and a whole whackload of other fees to take out this money if I wanted to. It is there, locked in, until I am 65, with both my employer’s and my contributions.

As it stands, I contributed $7K in those 2 years I was employed, my employer matched it to add another $7K, and my accounts about 15 years later, are worth $33K without my having contributed anything extra to it. It basically doubled.

In contrast, my partner had about the same amounts saved when he quit as well, but left it in Sunlife because he was lazy.

We quit at about the same amount of time, and his accounts are only worth to date, $17K because… he was lazy. He was earning practically nothing under Sunlife, like 0% return because their fees were basically sucking up all the profits and he had it in like a money market fund!!!! WTF.

I really couldn’t stand seeing this happen, so I wrote him a massive email on what to do, where to open the accounts and left him to do it.

For all the rest? DIY Investing!

It is no secret I am not a fan of banks in general for investing and am really a huge fan of DIY investing (as in with a brokerage and buying and trading it yourself because if I can learn it and was a dumbass, you can too), but in an effort to be fair, I will go through the motions of comparing how much it costs to trade with every bank.


ALL the rest of my accounts aside from that one above, are with Questrade.

I have my RRSP, Tax-free savings account (TFSA) and Margin (Non tax-registered) accounts with them, including Little Bun’s RESP (Registered Education Savings Plan) account.

I will use them as the benchmark, and I know another popular one in Canada is WealthSimple for robo-investing or auto-investing that is cheaper than traditional fund managers so I’ll review them too for just their fees, but keeping in mind I have never used them before.

List of banks and institutions to review

  • Questrade
  • TD Bank (TD)
  • CIBC
  • Royal Bank of Canada (RBC)
  • ScotiaBank
  • Bank of Montreal (BMO)
  • WealthSimple

Those are the main ones in Canada.

There are more of course but I am only one person who honestly, am only doing this for the benefit of you the readers, not me, as I already am with the cheapest option available.

(CAN YOU TELL I AM BIASED?)

Ahem.

Before we start – many banks have two trading platforms..!

So for instance, TD Bank has their own bank brokerage under TD Bank but then they have another financial institution called TD Waterhouse, which is where you can trade as a more sophisticated investor.

A lot of banks have this.

I can only speak truly to the details of TD and TD Waterhouse, so I will keep it simple and just take at face value their bank investing program as per their website (e.g. if I click on Investing, where does it take me? That’s what I’ll compare.)

I won’t be talking about TD Waterhouse though, because you can invest directly with TD. Waterhouse is not any different, and they don’t offer the best options for mutual funds (ETFs) that are e-series and cheap. More on that later.

I will only add in their separate investing platforms if I know they exist (e.g. ScotiaBank bought iTrade)

From what I can gather online this is it:

TD Bank TD Waterhouse
CIBC CIBC Investor’s Edge
RBC RBC Direct Investing
ScotiaBank ScotiaBank iTrade
BMO BMO InvestorLine

Here is the comparison breakdown

Questrade (Get 10 trades) TD Direct Investing CIBC Investor’s Edge RBC Direct Investing ScotiaBank iTrade BMO InvestorLine WealthSimple Invest (Get $5)
For investing: Have I tried them? Yes Yes No No No No No
Account Minimum? No – but if you are inactive, then Yes – $5K or else you’ll get charged inactivity fee of $24.95 every 3 months Yes – $15K or get charged $25/quarter TFSA & RESP no minimum but RRSP you need $25K or be charged $100 a year, and Non-registered or Margin accounts need to have $10K or be charged $100 a year Yes – $15K or get charged $25/quarter unless you do a PAD for $100/month or have been with them for less than 6 months No minimums for RESP, RRSP, TFSA but Yes $15K for Margin or non-registered or get charged $25/quarter No
Open an account Free Yes – $250 for RRSP, RESP, TFSA) Free Free Free Free Free
Close an account Free Yes – $150 only for RRSP, not for RESP or TFSA Free Free $50 if you close it within a year Free Free
Individual Stock: Buy or Sell $0.01/share (min. $4.95 to max. $9.95) $9.99 flat but if you trade 150+/quarter it is $7 flat $6.95 flat but if you trade 150+/quarter it is $4.95 flat $9.95 flat but if you trade 150+/quarter it is $6.95 flat $9.99 flat but if you trade 150+/quarter it is $4.99 plus $1.25/contract $9.95 flat Free trading, no account minimums
ETF Trade: Buy Free $9.99 flat but if you trade 150+/quarter it is $7 flat $6.95 flat but if you trade 150+/quarter it is $4.95 flat $9.95 flat but if you trade 150+/quarter it is $6.95 flat $9.99 flat but if you trade 150+/quarter it is $4.99 plus $1.25/contract $9.95 flat 0.5% management fee on portfolio yearly
ETF Trade: Sell $0.01/share (min. $4.95 to max. $9.95) $9.99 flat but if you trade 150+/quarter it is $7 flat $6.95 flat but if you trade 150+/quarter it is $4.95 flat $9.95 flat but if you trade 150+/quarter it is $6.95 flat $9.99 flat but if you trade 150+/quarter it is $4.99 plus $1.25/contract $9.95 flat 0.5% management fee on portfolio yearly
Mutual Fund Trade: Buy/Sell $9.95/trade Free for all mutual funds offered via TD (so TD Mutual funds basically); short-term redemption fees (e.g. selling before 90 days) may apply $6.95 flat but if you trade 150+/quarter it is $4.95 flat $9.95 flat but if you trade 150+/quarter it is $6.95 flat Free only for ScotiaBank funds, otherwise pay $65 per fund/quarter; minimum purchase for money market funds is $5K $9.95 flat 0.5% management fee on portfolio yearly
Phone Trades $45 per trade $43 per trade $50 per trade Under $0.50, 2.5% commission, from $0.51 to $2, $35 plus $0.02 share and $2.01 and over, $35 and $0.05/share $65 per trade $2K trade or less, it is a $43 fee, but $2K or more, it is about $35 – $39 Not available

Verdict?

Bank pages in general are confusing to find prices and fees

Their pages are SO CONFUSING to find fees and the structure, it isn’t simple at all, so I am tracking down and linking to the following.

Not all the banks offer direct investing with them (e.g. CIBC and BMO). Most of them have their own investing platform like RBC has RBC Direct Investing and ScotiaBank has ScotiaBank iTradewhich is why it is confusing and you can never find what you are looking for – it isn’t clearly explained for us.

Remember, the above are links to their fees if you are a DIY, SELF-DIRECTED INVESTOR. It means you are not talking to an advisor at the branch, and you can’t really ask for any ‘help’ or advice.

With all the resources online, in books, on Instagram and on this blog, you shouldn’t need to ask for advice, frankly, but you do you and what makes you feel the most secure.

Banks are more expensive, hands down over DIY

But not THAT much more expensive, just $5 per trade extra which does add up over time if you do a lot of trading, although if you just buy and rebalance ETFs, it is only maybe $100 extra a year, if that.

ScotiaBank seems to be the worst to go with

Their entire site was incredibly confusing, with footnotes all over the place adding on fee after fee after fee.

Honestly, if their site and fee structure is that complicated and annoying, they will be the worst ones with hidden fees.

Update: I also banked with them recently and they are the absolute pits. Goes to show.

Royal Bank seems to be the friendliest out of all the banks

For investing with simple fees and page structures, they were the easiest to understand, and seemed to have the least of all the other banks’ hidden fees etc.

I’d go with them if you don’t want to open another account with another bank or do DIY investing.

Update: I am banking with them recently for their bank promotions and they are actually the easiest/most tech-savvy I have seen so far.

The best for having someone rebalance and do all the work for you forever, is: WealthSimple or QuestWealth

If you don’t want to deal with ETFs, mutual funds, or picking, go with WealthSimple or QuestWealth.

NOTE: QuestWealth is NOT the same as QuestTrade !!! QuestWealth = Robo-advisors that do all the work for you, but QuestTrade means you do it yourself. CHOOSE THE CORRECT BOX when you sign up!

You will pay a fee for their services (low cost!)

The best for having mutual funds and a ‘set it and forget it’ vibe, without having to trade ETFS: TD E-Series

As always, TD e-series mutual funds are the lowest you can find at any institution.

They aren’t listed above, because it is a subset of TD Bank investing itself, but you just select from the e-series funds, the index funds, and deposit your $100/month or whatever amount into that mutual fund, set it, forget it, and move on with your day.

 

DIY investing will always be the cheapest hands down!

For building a DIY portfolio with trading individual stocks (for dividends) or ETFs here are the reasons why TD E-series is cheap, but not as cheap as buying Vanguard Canada ETFs.

The best option and the one I use out of what is available is:

Questrade for me, is the best with its account minimum at $5K (but even that is not applicable to you if you buy at least once a year, because you only get charged an inactivity fee.)

They charge no commissions to buy ETFs so it’s free as well, but they do charge a fee to buy stocks.

Basically, FREE if you stick to buying ETFs. *shrug*


With ETFs, the trick I’ll impart is you don’t even need to sell ETFs EVER when you rebalance either, because you can just buy in the other ETFs to ‘top up’ your rebalancing percentages. You should never have to sell ETFs to rebalance. Just saying.

If you want to dabble into individual stocks, you can with them, which is nice, and their minimums are $4.95 and max at $9.95, which is in line with the other banks that deal with investing.

So, where are you at?

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Sherry of Save. Spend. Splurge.

Millionaire at 36 after getting out of $60K of student debt in 18 months, a little over a decade earlier, using TheBudgetingTool.com. Since then, I have paid my $600K home in cash (my half was $300K), my $180K casr in cash, worked 50% of my career (taking 1-2 year breaks), and quadrupled my income within 2 years of graduating, going from $65K to $260K with an average lifetime savings rate of 50%. I could retire today if I wanted, but love my work-life balance as a freelancing consultant in STEM (Science, Technology, Engineering, Math). I am all about balance - between time and money, and also enjoying my money. I also post daily on Instagram @saverspender.

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4 Comments

  1. PP Gal

    I’m with Paula about Questrade. Good thing I made a lot of reading and asking before deciding to invest. This post is great for anyone who wants to narrow down their choices for DIY investing. I better bookmark the links for fees because it’s hard to find such information when needed.

    Reply
    1. Sherry of Save. Spend. Splurge.

      AWESOME! 🙂 Yes, it took me a few hours to find all the links to fees, they were so well hidden :-/

      Reply
  2. Paula

    Wow, thank you so much for the hard work on getting all these information, that’s very generous of you! I’m already with Questrade, but it was nice seeing I didn’t lose to the other banks. I really enjoy your money posts, it’s very motivating.

    Reply
    1. Sherry of Save. Spend. Splurge.

      You are so welcome. Questrade and DIY = Best. You can’t beat their fees.

      Reply

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