A Guide on How to Buy Stocks in Canada (2021)

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While the traditional role of a stock broker still exists, many Canadians have opted to use the digital platforms now available to them.

Buying stocks in Canada and getting into investing has never been easier with a variety of tools now available to buy and sell stocks as well as to research and analyze them, all online.

Here, we’ll go through how Canadians can buy stocks in Canada.

 

 Commission Fee
Canadian or US Stocks
Online Trade
Commission Fee
Canadian or US Options
Online Trade
Active Trader Pricing
Flat fee reduces to
Desktop AccessMobile AppAdvanced Data Streams AvailablePractice Account
TD Direct Investing$9.99$9.99 + $1.25 per contract$7.00 - 150 tradesYesYesYesYes in thinkorswim
CIBC Investor's Edge$6.95$6.95 + 1.25 per contract$4.95 - 150 tradesYesYesYesNo
Scotiabank iTRADE$9.99$9.99 + $1.25 per contract$4.99 - 150 tradesYesYesYesYes
BMO InvestorLine$9.95$9.95 + $1.25 per contract5 Star ProgramYesYesYesNo
RBC Direct Investing$9.95$9.95 + $1.25 per contract$6.95 - 150 tradesYesYesYesYes
National Bank Direct Brokerage$9.95$9.95 + $1.25 per contract$0.95 - 100 tradesYesNoYesNo
Questrade$4.95 min - $9.95 max (1 cent per share)$9.95 per trade + $1 per contractVisit websiteYesYesYesYes
Interactive Brokers$1 min
$0.005 USD per share for US stocks, $0.01 CAD per share for CAD stocks
$0.65 USD per contract, min of $1 USD (US)
$1.25 CAD per contract, min of $1.50 CAD (Canada)
Visit website
YesYesYesYes
Qtrade$8.75$8.75 per trade + $1.25 per contract$6.75 - 150+ trades
YesYesYesYes
Virtual Brokers$1.99 min - $7.99 max
(1 cent per share)
$7.99 per trade + $1.25 per contract$3.99 - 150+ tradesYesYesYesYes
Wealthsimple Trade$0$0$0NoYesNoNo

 

1. Big 5 Bank Self-Directed Brokerages

The Big 5 Banks are usually the first option many Canadians think of when considering a brokerage to begin their investing journey.

It seems like a natural choice given that most of us already have a relationship with one or more of the big 5 banks, the trust factor is definitely there, so it’s a good place to start.

The Big 5 provide a wide variety of offerings that may appeal to the modern investor.

 

1.1 TD Direct Investing

TD offers several platforms to purchase and research stocks including WebBroker, TD Trading App, Advanced Dashboard and thinkorswim, which vary in terms of capabilities and depth of information.

TD Direct Investing offers a $9.99/trade flat commission fee to trade Canadian and US stocks and a $9.99 fee + $1.25 per contract to trade Canadian and US options for online trades.

Active traders, trading 150+ trades per quarter, will pay a reduced fee of $7.00/trade.

Cash and margin accounts are both offered as well as investment accounts.

Phone support is also just a call away, however commission rates are higher for orders placed on the phone.

TD customers with existing savings of chequings accounts can transfer funds to their WebBroker account in real-time and can also easily withdraw funds once they are clear.

 

1.2 CIBC Investors Edge

CIBC offers a $6.95/trade flat commission fee to trade Canadian and US stocks and a $6.95 fee + $1.25 per contract to trade Canadian and US options for online trades.

In terms of pricing, they’re the only big 5 bank charging a commission lower than the $10 mark.

Active traders, trading 150+ trades per quarter, will pay a reduced fee of $4.95/trade.

Cash and margin accounts are both offered as well as investment accounts.

Trade using their desktop platform or their mobile app or also call in your trades if necessary, but note that commission fees are higher on trades placed over the phone.

 

1.3 ScotiaBank iTrade

While it’s been a long time since the purchase, Scotiabank’s iTRADE was largely built from their purchase of ETRADE Canada in 2008.

While Scotiabank had a brokerage business long before this purchase, their foray into offering a succinct online platform really took foot after the acquisition.

Scotiabank has obviously invested a lot of resources into their platforms and delivers a solid offering for Canadians.

Scotiabank also purchased Charles Schwab’s Canadian business in 2002.

iTRADE offers a $9.99/trade flat commission fee to trade Canadian and US stocks and a $9.99 fee + $1.25 per contract to trade Canadian and US options for online trades.

Active traders, trading 150+ trades per quarter, will pay a reduced fee of $4.99/trade.

Cash and margin accounts are both offered as well as investment accounts.

Phone support is also just a call away, however commission rates are higher for orders placed on the phone.

 

1.4 BMO InvestorLine

BMO InvestorLine has typically catered to the more experienced trader.

With a great suite of tools, their commission structure is similar to the other banks at $9.95/trade flat commission fee to trade Canadian and US stocks and a $9.95 fee + $1.25 per contract to trade Canadian and US options for online trades.

InvestorLine however does not have the same active trader discounts.

They use a tiered system that’s based on either trades per quarter or assets in your account.

Based on your tier, you may be eligible to be part of their 5 Star Program, as either a Gold, Platinum of Diamond member.

The 5 Star program includes specific pricing and discounts, priority support and access to the BMO Market Pro platform among other benefits.

Cash and margin accounts are both offered as well as investment accounts.

Phone support is also just a call away, however commission rates are higher for orders placed on the phone.

 

1.5 RBC Direct Investing

RBC Direct Investing offers a browser based platform as well as a mobile experience.

Their mobile experience was long overdue for a refresh, which RBC was aware of and a newly released mobile experience for direct investing clients built into the RBC app is now available, having come to market in May .

RBC Direct Investing offers a $9.95/trade flat commission fee to trade Canadian and US stocks and a $9.95 fee + $1.25 per contract to trade Canadian and US options for online trades.

Active traders, trading 150+ trades per quarter, will pay a reduced fee of $6.95/trade.

Cash and margin accounts are both offered as well as investment accounts.

Phone support is also just a call away, however commission rates are higher for orders placed on the phone.

 

1.6 National Bank Direct Brokerage

Although the big 5 bank brokerages have a very similar commission structure on trades, National Bank is a little bit different.

If you’re looking for the backing of a bank, National Bank has been evolving their Direct Brokerage offering recently and has a slightly different fee schedule.

Their Active Trader tier, which requires 100+ trades a quarter, has a fee of $0.95 per trade for Stocks and $0.95 + $1.25 per contract for options.

 

Pros & Cons of Big 5 Bank Brokerages

Pros

  • Trust factor – Backing of large institutions
  • Easy to transfer funds
  • Extensive support options available

Cons

  • Higher fees
  • Platforms and tools are lacking at some
  • One of many businesses the bank operates

 

2. Online Self-Directed Brokerage Firms

Over the last decade, there’s also been a new wave of dedicated online brokerages that have been gaining popularity among Canadians.

 

2.1 Questrade

Questrade is likely the most popular online discount brokerage and offers the same registered and non-registered accounts that a bank brokerage offers.

It also offers no fees on purchasing pre-built ETFs which can be excellent for new investors trying to find their way in the world of investing.

Moreover, because users are not able to meet in-person with financial advisors, Questrade offers a live-chat along with over-the-phone and email support for its customers.

For those investing in the pre-built ETFs, Questrade offers a monthly management fee of 0.25% which reduces to 0.20% after $100,000.

Commissions start at 1 cent per share with a minimum of $4.95 to a maximum of $9.95 for Stocks and $9.95 per trade + $1 per contract for Options.

Both cash and margin accounts are available.

Current Promo: Get $50 in trades for free!

 

2.2 Interactive Brokers

Interactive Brokers was ranked #1 in by Barron’s in their evaluation of the best online brokers, tying with Fidelity for the top spot.

Interactive Brokers has been around for decades and while they’re an American company, they’ve been available to Canadians for many years.

While they don’t have an office in Toronto, their Canadian headquarters are based out of Montreal.

IB takes the learning part of trading seriously with video tutorials, trader’s insights, and daily overviews of the market, much like traditional brokerages.

Under their fixed commissions structure you pay:

$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

IB offers cash and margin accounts as well as various investment accounts.

Interest rate to borrow on margin accounts is one of the lowest in the industry and interest paid to you on uninvested cash balances is one of the highest in the industry.

In addition, IB has invested considerably in their platforms and tools.

One to note is the IB SmartRouting technology, which aims to get you the best possible price on stocks/options at the time of execution.

 

2.3 Qtrade

Qtrade is a Canadian brokerage based in Vancouver that’s been operating since 2001.

Qtrade offers a flat commission fee of $8.75 per stock trade but also offers commission-free trading of its own selected ETFs (for the first 100 invested in).

They also incentivize more frequent trading by reducing that per-trade commission down to $6.75 if investors carry out 150+ trades per quarter, and/or keep $500,000+ in assets.

Qtrade offers many registered and non-registered account types including cash, margin, TFSA, RRSP, RRIF, RESP and more.

 

2.4 Virtual Brokers

Virtual Brokers is a Canadian company owned by BBS Securities that came to market in 2009.

Headquartered out of Toronto, VB has consistently won many awards over the years, including best online broker.

Similar to Qtrade, Virtual Brokers also offers free ETF purchases and also has a comparatively affordable commission range of $1.99 – $7.99 per trade.

Commissions for stocks start at 1 cent per share, with a $1.99 min and a $7.99 max.

Options trades cost $7.99 per trade + $1.25 per contract.

Active trader volume of 150+ trades will allow you to trade stocks for a flat fee of $3.99 and options for $3.99 + $1.25 per contract.

They also offer dual currency (USD/CAD) for all of their accounts as well as registered and non-registered options.

 

Pros & Cons of Online Self-Directed Brokerages

Pros

  • Advanced trading platforms and tools
  • Moderate fees
  • Focused on one business – being a brokerage

Cons

  • Fund transfers take a few business days and can be complicated
  • Support options are limited
  • Inactivity fees are high

 

3. No Fee Self-Directed Brokerage Firms

The well known no fee Robinhood app has been gaining tons of popularity, and even though Robinhood is not available in Canada, Canadians luckily have a great option at home!

Wealthsimple Trade is the first zero commission stock trading app in Canada.

That’s right – buy and sell stocks with absolutely $0 in commission fees!

It’s a do-it-yourself brokerage, which is fantastic for those looking for a no frills approach to save on commission fees.

If you’re someone that does their own research and are looking to skip commission fees altogether, Wealthsimple Trade may be the choice for you.

At the same time, if you are looking for detailed data about a stock or information about a company before initiating a trade, you will need to use a combination of Wealthsimple Trade and another tool or platform for research.

 

Wrapping it up

As with any trade option, your particular circumstances dictate what option is best for you.

Maybe you enjoy the independence of conducting lots of trades without worrying about high fees.

A self-service discount brokerage or possibly a very lean-service version of a brokerage that you already have an account with may be your best option.

Or maybe you prefer having the support of an advisor.

Having that help from a full-service brokerage may be your ideal situation.

And there are so many options in between.

Rest assured, brokerages in Canada have a wide variety of options to help meet your needs.

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Yusuf Ahmed

I'm just your average guy, trying to make my money work for me. I love to save and I love to write!

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