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Can I use ETRADE in Canada?
Nope, ETRADE is no longer available in Canada.
Is ETRADE coming to Canada?
ETRADE did exist in Canada, however it was sold.
Scotiabank purchased ETRADE in 2008 for a a little under $500 million dollars.
Of particular note, ETRADE is an American company that has continued to grow and become quite successful in the US, while they divested some of their assets like their Canadian operations.
Scotiabank went on to rename the business Scotia iTRADE and they continue to operate their direct investing business under this brand.
So the long and short of it is that ETRADE did exist in Canada, however similar to Charles Schwab’s Canadian brokerage business, Scotia purchased it and folded it into their own operations, which means it is highly unlikely that ETRADE will reappear in Canada.
Alternatives to ETRADE for Canadians
ETRADE was targeting the active investor with a higher net worth, so to start you can take a look at 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.
|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|
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)
- 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
- Low fees vs the bank brokerages
- Desktop app, mobile app and advanced trading app
- Availability of advanced data streams
- October 1, 2020: There is no longer an inactivity fee on any accounts
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
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.
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.
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
- 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
- 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