Is Charles Schwab Available In Canada? (2020)

Is Charles Schwab available in Canada?

Nope, Charles Schwab is not available in Canada.

Is Charles Schwab coming to Canada?

Charles Schwab actually did exist in Canada many years ago.

In 2002, Scotiabank purchased what was then known as Charles Schwab Canada.

While things have drastically changed from 2002 to now, I wouldn’t expect Charles Schwab to return to Canada as a brokerage any time soon, as there are probably non-competes amongst other agreements in place after selling their Canadian operations to Scotia.

In addition, they seem to be focusing resources heavily in the US, having purchased TD Ameritrade for $26 billion towards the end of 2019.

And before that, they were I believe the first large brokerage to offer $0 trades, which is probably part of the reason why they scooped up TD Ameritrade shortly after.

Best Alternatives to Charles Schwab for Canadians

Charles Schwab was a full-service brokerage so as an alternative you may want to start with the big 5 banks:

• TD Direct Investing
• BMO InvestorLine
• RBC Direct Investing
• Scotia iTrade
• CIBC Investor’s Edge

All 5 big banks have the same commission structure for trades that are completed digitally:

Stocks: $9.99 per trade
Options: $9.99 per trade + $1.25 per contract

These are the prices for their first tier of volumes.

If you are an active trader, there are some discounts, and this varies from bank to bank so you’ll need to check out each one individually.

The main plus point I’ve heard of in using one of the big 5 banks is the ease of transferring funds.

Example, TD is already your main bank and where your pay gets deposited.

You can literally transfer from your TD chequing account to your TD Direct Investing account in real-time.

There seems to be a sense of comfort in having one’s financial products at the same bank.

If you’re not a very active trader, one of the above choices can make sense, however I can already hear the active traders say that the commission fees are too high!

Two discount brokerage alternatives for Canadians are Questrade and Interactive Brokers.

We provide a comparison of the two and some more details below.

Quick Comparison

1. Questrade

Questrade has become a strong player in the Canadian brokerage space over the last decade. Offering both self-directed investing and their Questwealth Portfolios, Questrade strives to offer lower fees than its competitors. Boasting 50,000 accounts opened every year aad 21 years in the Canadian market, Questrade has $9 billion in assets under administration. (Stats as per Questrades website)
 
Commissions

• Stocks: 1 cent per share with a minimum of $4.95 and maximum of $9.95 (+ exchange and ECN fees if applicable)
• Options: $9.95 per trade + $1 per contract (+ exchange and ECN fees if applicable)
• ETFs: Buying is free, selling is the same price as stocks but can be lower if you have an advanced market data package

What’s Good

• Low fees vs the bank brokerages
• Desktop app, mobile app and advanced trading app
• Availability of advanced data streams

What’s Not

• Inactivity fee of $24.95 quarterly if you did not have any trades in the previous quarter and have an investment/cash balance less than $1,000 CAD

2. Interactive Brokers

Interactive Brokers was ranked #1 this year by Barron’s in their evaluation of the best online brokers for 2020, tying with Fidelity for the top spot. Interactive Brokers has been around for decades and has been available to Canadians for many years. While they don’t have an office in Toronto, their Canadian headquarters are based out of Montreal.
 
Commissions

• Stocks:
  Under their fixed commissions structure:

  $0.005 USD per share for US stocks
  $0.01 CAD per share for CAD stocks
  Minimum commission of $1

  For higher volume traders, Interactive Brokers offers a tiered commissions structure.

• Options:
  US: Depends on the premium and ranges between $0.25 – $0.65 USD per contract with a minimum per order of $1 USD, price goes down if your monthly volume is higher
  Canadian: Starts at $1.25 CAD per contract, minimum per order of $1.50 CAD, price goes down if your monthly volume is higher
• ETFs: Some US ETFs are available commission free however transaction fees may be passed on to you

What’s Good

• Low commissions, will probably work out positive for most folks vs other brokerages however they’re volume based so they can actually become more expensive if you trade high volumes
• Interest rate to borrow on margin accounts is one of the lowest in the industry
• Interest paid to you on uninvested cash balances is one of the highest in the industry
• IB SmartRouting technology aims to get you the best possible price at the time of execution – Learn more here

What’s Not

• For those looking for a Canadian based brokerage, Interactive Brokers is an American company, however they are members of the Investment Industry Regulatory Organization of Canada (IIROC) and the Canadian Investor Protection Fund (CIPF) – they are a large organization that’s been around for decades
• RSP accounts are $12.50 CAD quarterly and will also be charged $50 CAD fee for withdrawal/deregisration
• $10 USD activity fee per each account – Calculated as $10 USD subtract any commissions from trades you made or completely waived if you have a balance of $100,000 USD. If your balance is less than $2,000 USD, the fee is $20 USD subtract any commissions