As technology has improved and has made self directed investing more accessible to everyday Canadian investors, online brokerages have popped up to replace normal brokers. Once relying on other people to trade stocks for them, retail investors can simply log into an online brokerage and begin investing from their cell phone using mobile apps.
To be competitive in the online brokerage market, trading platforms offer a multitude of different fee structures, robo advisor options, research tools, trading tools, and other options to their members. Let’s dive in and compare two of the most popular online brokerages in Canada, Qtrade and Questrade.
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Leading the way as one of Canada’s best discount online broker, Questrade came into the market with investment industry defying free trades for ETFs (exchange traded funds) and record low trading fees, yet still provides a robust collection of trading tools geared towards active traders who want to manage their own personal finances.
In addition to its low fees, Questrade also offers investment accounts and if its users want to open a savings account there are several options to choose from. Users can conveniently add mutual funds, exchange traded funds, forex trading, and stock trading to their investment portfolio.
- No annual account fees.
- Mobile apps and website are intuitive and easy to use.
- Commission free ETFs when buying.
- No quarterly inactivity fees.
- A subscription is required for real time streaming data.
- A minimum investment of $1,000 is required.
Geared more towards beginning traders, Qtrade offers a competitive fee structure and focus on platform functionality. Its platform is a great resource for new investors who are interested in self directed investing due to its research tools and educational material which allow users to make more informed decisions.
The trading platform is classified in the discount brokerages category, and offers the option to make stock trades, buy mutual funds, purchase ETFs, and more.
- Excellent customer service.
- Has a wide range of products and account options.
- Does not accept account funding from credit/debit cards or electronic wallets.
- Very competitive pricing for some assets.
- Has an inactivity fee.
- Options and margin fees are high.
- Requires a minimum trade of $1,000 to get benefits for commission free ETF purchases.
Pay for order flow (PFOF) revenue generation used by US based companies like Robinhood isn’t allowed in Canada. Online brokerages in Canada need to be a little more creative in order to both attract users and generate revenue. This can range from commission free ETFs to no minimum investment.
Stock trading commissions can vary in pricing, but sometimes a higher per share fee is worth an added benefit of fee structure. Let’s look into how Qtrade vs Questrade fees compare for the everyday active trader.
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Interactive Brokers is widely considered to be one of the best online brokers for active traders and professional investors. They offer a powerful and sophisticated trading platform, as well as low commissions and fees, and a wide range of investment products. Additionally, Interactive Brokers has a strong reputation for providing excellent customer service and a high level of security for client accounts.
- Lowest and most transparent commissions
- Large number of tradable security types
- Robust suite of research tools
- Low margin rates, from 0.75% to 1.59%
- Access to 40,000+ funds worldwide & 7,700+ funds with no transaction fees
One of the big selling points for Questrade vs other online brokers is its low trading fees. Trading stocks incur a price per share of $0.01, with a $4.95 minimum and $9.95 maximum fee when buying and selling.
For high volume, active traders, this is a great commission structure. For those who aren’t as active and are looking more to buy mutual funds or ETFs, Questrade offers no commission fees on ETF purchases.
Having a brokerage account with Questrade also allows users to buy and sell stocks, engage in forex trading, and have access to options trading (with trading commissions, of course).
Questrade account holders also have the added benefit of no account opening or closing fees and no inactivity or annual fees. If investing in foreign markets however, be aware of the CAD conversion fees.
Among discount trading platforms, Qtrade is considered on the higher side in terms of fees. Compared to fees charged by any big financial institution owned online broker though, its fees are very competitive. Qtrade offers high trade volume discounts to investors who make over 150 trades per quarter.
Qtrade also offers discounts for young investors (18-30 years old) if they add a monthly minimum of $50 to their account. For those looking to trade stocks, the standard fee is $8.75 per trade. While Qtrade offers over 100 ETFs with no commission fees when purchasing, those not on the list are charged at $8.75 per trade. Mutual funds are free.
Having a happy user base is critical to the success of online brokers. This is why customer service should be an integral part of any operation. Successful online trading platforms will have award winning customer service. Without it, users will most likely jump ship and take their money elsewhere, as there are many discount brokerages to choose from.
Let’s take a look at how customer service compares with Questrade vs Qtrade.
Questrade has a reputation for excellent customer service and support. It offers online chat, support by phone, and email. Questrade representatives are extremely knowledgeable and have a high rate of success in resolving issues.
Qtrade customer support can also be reached by email, phone, and live chat and also provides a high level of customer service. By phone they have a call back feature which allows users to leave their phone numbers until a representative is available and calls them. The representatives are knowledgeable and can resolve nearly any issue.
Which Online Broker Is Best for You?
When looking at personal finance, choosing the right online trading platform is important. Several factors need to align to choose the best fit for your needs, such as trading fees, options for commission free trades, minimum deposit, popular investment accounts, etc.
Each one has its strengths and weaknesses, so it’s important to understand your investment strategy before choosing.
If you’re looking to both lower your fees on stock trades and other investments and use a functional, intuitive platform, Questrade may be the self directed investment platform for you. Questrade fees are some of the lowest in the industry!
It’s great for those who want to start trading as well as the experienced, active trader. Its high minimum deposit does create a barrier to entry for beginning investors however.
If you’re just starting out or not looking to actively trade, Qtrade may be the platform for you. Designed for those who have a longer time horizon and limited experience, its research tools and incentives for Canadian ETF purchases make it perfect for those who want a portfolio comprised mainly of mutual funds and ETFs.
Moving out of that realm and stock trading can get a bit more expensive vs Questrade.