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With the rise of low fee and in some cases, zero-fee trading platforms, investing in the stock market is more accessible than ever regardless of if you are just starting out and learning about financial markets or if you are an experienced investor.
- Best Alternatives to Charles Schwab for Canadians
- Wealthsimple Trade
- Discount Broker Comparison: Questrade vs Interactive Brokers Canada
- Interactive Brokers
- Big 5 Canadian Banks
- The Pioneer of Discount Brokerage Services
- Charles Schwab Canada Launch and Exit
Is Charles Schwab available in Canada?
Nope, Charles Schwab is not available in Canada.
Is Charles Schwab coming to Canada?
After selling their Canadian operations to Scotiabank in 2002, it is not very likely for Schwab to return to Canada anytime soon.
Best Alternatives to Charles Schwab for Canadians
Charles Schwab is a full-service discount brokerage that currently offers zero commissions on their online platform for purchases of stocks and ETFs. They also charge a $0 base fee for the purchase of options along with very low fee of $0.65 per contract.
If you are interested in paying zero trading fees when you purchase stocks or ETFs, we recommend using Wealthsimple Trade because it is the only Canadian company that offers zero-commissions trading.
1. Wealthsimple Trade
|USD & CAD Accounts||No|
|Advanced Data Streams Available||No|
|Promotion||$30 cash bonus|
If you are more of an advanced investor and are looking to purchase derivatives such as options and futures, you definitely want to check out discount brokers, Questrade and Interactive brokers as they offer a large range of assets to invest in for low fees.
Discount Broker Comparison: Questrade vs Interactive Brokers Canada
|1 cent per share|
Min $4.95 to Max $9.95
|$0.005 USD per share for US stocks, $0.01 CAD per share for CAD stocks, min $1|
|$9.95 per trade + $1 per contract||US: $0.25 – $0.65 USD per contract, min of $1 USD
Canada: $1.25 CAD per contract, min of $1.50 CAD
|Advanced Data Streams Available||Yes||Yes|
|Promotion||$50 in free trades||None|
|Learn More at Questrade.com||Learn More at InteractiveBrokers.ca|
2. Interactive Brokers
Interactive Brokers is another exceptional option for those looking to trade with a discount broker.
Founded over 40 years ago, Interactive Brokers has a wealth of experience when it comes to making trading more accessible for their users by offering low fees and innovative tools.
The company allows you to trade globally, fund your account in different currencies, and participate in over 100 different markets across more than 30 countries.
Additionally, Interactive Brokers has been available to Canadians for more than 20 years and is a member of relevant agencies such as the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund.
Flexible pricing structures including fixed and tiered options.
Minimum fees for Stocks, ETFs, and Warrants are only $1 CAD for Canadian based companies and $1 USD for American based companies.
Premier technical capabilities including desktop and mobile platforms, free trading tools, and SmartRouting technology which assists with getting you the best price when you make a trade.
Questrade is one of the most well known, and reputable discount brokers available in Canada.
A discount broker will carry out all of your trades just like any other broker, however they are known for charging lower fees.
So you might be wondering what’s the catch? How are these types of brokers able to charge less fees than my traditional bank?
Companies like Questrade and Interactive Brokers are “digital first” and don’t have any physical locations which allows them to save money and pass that onto their users in the shape of reduced fees.
Discount brokers are a great choice for anyone who is interested in paying less in trading commissions and wants to make self-directed investments in various types of assets ranging from stocks and bonds to derivatives like futures and options.
Recently, Questrade was ranked number one in terms of investor satisfaction by J.D. Power when compared to other self-directed brokerages.
Zero fees charged for opening a new account
Trade stocks with low commissions: $4.95 minimum fee, up to a max of $9.95
Pre-built ETF portfolios managed by experts with fees starting at 0.25%
Unique fee structures and potential rebates for active traders
4. Large Canadian Banks
At the end of the day, Charles Schwab still offers a full range of financial products and services, so if you are looking for a more comprehensive offering you should consider one of the big 5 banks in Canada.
- TD Direct Investing
- BMO InvestorLine
- RBC Direct Investing
- Scotia iTrade
- CIBC Investor’s Edge
TD / BMO / RBC / Scotia charge the same fees for trades that are executed online:
Stocks: $9.99 per trade
Options: $9.99 per trade + $1.25 per contract
These are the prices for their first tier of volumes.
CIBC is the only big 5 bank that comes in lower at $6.95 per trade for stocks and $6.95 per trade + $1.25 per contract for options.
Frequent traders can take advantage of discounts which vary 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 larger banks to make your trades 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 right away.
Many people tend to feel more comfortable by having their financial products at the same bank.
If you’re not a very active trader, one of the above choices can be optimal, however I know that the active traders will say that the commission fees are too high!
In that case, Wealthsimple Trade, or the previously mentioned discount brokerage alternatives for Canadians: Questrade and Interactive Brokers are likely to be a better fit for you.
The Pioneer of Discount Brokerage Services
Charles Schwab is one of the largest American financial services companies with over $6.5 trillion (USD) in client assets.
The company was founded in San Francisco, in 1971 and is well known for its online trading platforms, educational resources for investors, and its discount brokerage services such as low/free trading commission charges.
Charles Schwab is considered the pioneer of discount brokerages.
In 1975 (also known as May Day) when the Securities Exchange Commission (SEC) allowed brokerages to decide their own commission fees rather than using a fixed price.
At this time, many brokerages jumped on the opportunity to raise prices, but Charles Schwab decided to go against the grain and lower fees, thus creating what we know as “discount brokerage offerings.”
This is important, because other companies followed along, which ultimately made investing much more accessible for everyday people like you and me
Charles Schwab Canada Launch and Exit
Charles Schwab actually did exist in Canada many years ago.
The firm operated in Canada from 1999 – 2002 as a full-service, discount broker firm.
Schwab entered the market by purchasing Porthmeor Securities in 1999.
Their Canadian operations used to be headquartered in Toronto with offices all over the country.
In 2002, Scotiabank purchased what was then known as Charles Schwab Canada.
The deal was announced on February 13, 2002 and The Bank of Nova Scotia (Scotiabank) agreed to buy Charles Schwab’s Canadian business for an undisclosed amount.
The transaction closed on August 12, 2002 and Scotiabank acquired Charles Schwab’s Canadian client base, brokerage, workforce, and infrastructure along with approximately $950 million (USD) in assets.
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.