Comparing The Best Stock Brokers In Canada: Top 6 Choices

You can read many great books on investing but it’s choosing the right broker that will benefit you most. This way, you’ll be able to reduce trading fees, which add up very quickly. The broker you pick can be a big help by offering some useful bonuses that will increase your returns further.

Details like this might seem insignificant. And many investors, especially beginners, do overlook small fees when they are very confident. However, the stock market is extremely volatile today because of the coronavirus crisis. According to experts at the World Economic Forum, this volatility will continue for a while.

Therefore, there is no detail that is too small for an investor today. You must do everything possible in order to reduce losses and maximize returns. Trying to find the best brokerage should be one of the first tasks on your list. There is no shortage of great discount brokers in Canada, so choosing shouldn’t be too hard. You simply need to pick the one that fits your personal investment style best.

Top 6 Stock Brokers in Canada in 2020

1. Questrade

Questrade is often viewed as the number one Canadian stockbroker. It definitely is one of the most affordable options on the market today. And if you are clever and trade ETFs you can cut all costs to the maximum.

First of all, Questrade has no annual fees. The size of your account doesn’t influence this in the least. Questrade also doesn’t charge any fees when trading ETFs. Therefore, this brokerage is definitely best for ETF investors. There are fees for other types of trades. They range from $4.95 to $9.95. Questrade itself will cover the transfer costs for your RRSP or TFSA.

However, note that Questrade charges an inactivity fee. You’ll have to pay $34.95 every quarter you go without a single trade. You will also pay this fee if your account balance dips below $1,000. This is the minimum account size, so you can’t even start working with Questrade with less money in your account. Note that if you want to exchange your CAD for investment purposes, Querstrade charges a 1.99% fee.

Considering that making even one ETF trade is enough to avoid the fee, this isn’t a big issue. So long as you keep your balance over $1,000, Questrade is a great choice for ETF investors. It’s one of the oldest discount brokers in the industry and it’s very trustworthy. Moreover, it offers a lot of help for making the best trading decisions. Finally, your money invested with Questrade is protected by the Canadian Investment Protection Fund. Therefore, you get to be as safe as an investor can be.

2. QTrade Investor

QTrade is for investors who look for the best service and are willing to pay a bit extra for it. This broker offers a selection of ETFs and mutual funds for fee-free trades. However, you will need to pay a fixed fee of $8.75 for the rest. Therefore, it’s best to find out just what is included in the free trade selection.

On the one hand, there is no annual fee with QTrade. On the other, if your account balance (the value of your TFSA and RRSP combined) in under $25,000, the broker will charge you $100 a year. Note that QTrade Investor will only cover up to $150 in costs for your TSFA or RRSP transfers.

This brokerage also offers a lower per-trade fee of $6.95 for those investors who are very active or very rich. TO be eligible for this discounted fee, you need to have over $500,000 in your accounts or make over 150 trades in a quarter.

QTrade also protects your money under the Canadian Investment Protection Fund. And don’t forget that this broker offers great customer support and very user-friendly solutions. For those who need to exchange currency from CAD to anything else as a part of their investment strategy, QTrade fees will range from 1.75% to 1.60%. The fee depends on the transaction volume (less or over $10,000).

3. BMO InvestorLine

BMO InvestorLine is a discount broker that’s growing more popular by the day. It’s not the cheapest, but it’s easy and convenient to use. Most importantly, it’s part of the BMO. Therefore, all the “old-school” investors who seek the security of such a reputed brand appreciate this broker.

But this brand name comes with a price. Namely, you have to pay an annual fee of $100 for an account under $15,000 for non-registered accounts (charged $25 every quarter). Note that for registered accounts, the balance has to be over $25,000 to avoid the fee. You also need to have a minimum of $5,000 in balance to even open a BMO InvestorLine Self-Direct Account. Moreover, the trade fee for both buying and selling is $9.95. There are no free ETFs or mutual funds on offer. Therefore, you will always pay for trades.

But while this isn’t ideal, there are some advantages to BMO InvestorLine that might outweigh the costs. This platform is good enough to have won the award of the J.D. Power 2018 Canada Self-Directed Investor Satisfaction Study. Customer service offered by BMO is excellent. The platform also offers a wealth of information investors need to make smart trades on their own.

If you need some currency exchanges during your investment transactions, BMO only charges a 0.90% fee.

4. RBC Direct

You can use RBC Direct when you aren’t very active as an investor and have no plans of changing. This broker has some low and some not-so-low fees. But there is no inactivity fee and withdrawals can be very cheap in some cases. Technically, there is neither a deposit nor a withdrawal fee. However, only investors with RBC Bank accounts can benefit from this.

For them, withdrawals from margin, TFSA, RESP, and cash accounts are free. RRIF account withdrawals are free if you only make no more than two withdrawals. For everyone else, and for other types of withdrawals, fees vary from $10 to $50.

The trading fee is flat $9.95 and $1.25 over that for each trade if you make under 150 of them in a quarter. If you go over 150 trades per quarter, your fees will go down to $6.95 plus $1.25. RBC Direct doesn’t charge any fees for trading mutual funds, but there are no free ETFs.

There is an annual account fee of $100 but no minimum deposit.

5. Interactive Brokers

Interactive Brokers promises to take your investment to the next level and it definitely can do that if you are a very active investor. This platform is designed for those who want to trade daily and make use of every opportunity. While it’s not the cheapest platform there is, it is cheap for active traders who can save on low commissions. There is an annual $50 fee for TFSA and RRSP accounts. But terms for forex trading are extremely good.

As far as trading commissions go, Interactive Brokers charges $1USD per 200 shares or $1CAD for 100 shares. With this rate you get great terms for expensive stocks. However, the rate for penny stock will be rather high. Again, Interactive Brokers reminds users how it’s a platform for the active and ambitious.

This broker only charges a single basis point (0.01% with a minimum commission of $2.50USD) for foreign exchange. Therefore, it’s a great broker for investors who want to branch out beyond Canada.

Note that if you don’t make enough trades to cover $10 a month in commissions, the broker will take the difference anyway. It will go directly from your account. Also, the initial deposit when opening an account is $10,000.

The broker is very well-regulated and trustworthy. But note that the platform is rather complex. Therefore, it’s a better choice for experienced investors.

6. Virtual Brokers

Virtual Brokers is one of the newer brokers on the market. But it’s not to be underestimated due to this. In fact, it’s one of the cheapest and most innovative options available now. If you are trading in mutual funds and ETFs, this is a good option for you. There are mutual funds and ETFs you can buy without fees. However, there is a fee for selling (1c per share and the minimum of $1.99 per trade).

Both the advantage and the disadvantage of Virtual Brokers is that you can get great terms, information, and help with the elite package the broker offers. The packages on offer are great but costly.

All in all, this broker will make sense for active investors who want to have the aid of a multi-featured platform. For everyone else, there are cheaper options, even if they aren’t as easy to use.

In Conclusion: Leading Canadian Stock Brokers Recommended for You

Choosing the right broker is one of the essential steps to take when you start investing. But when making this choice, you need to consider not only the terms and pricing the broker offers. You need to think about how these terms fit with your personal investment plan. Brokers that work best for couch-potato investors (like Questrade) might not be the best for active investors who trade daily (like Interactive Brokers). Therefore, first, you should decide what you want to do. Only then should you start choosing which platform will be best for you.