After looking into several brokerage houses, I have narrowed it down to two that I would recommend: Questrade and Virtual Brokers.
- No annual fees
- Commission-free to buy ETFs
- Minimum amount to open an account is $1,000
- Free dividend re-investment plan
- The inactivity fee is $25 per quarter. But, there are a few ways to avoid it:
- If you’re under 25 years old, you automatically avoid this;
- Make at least one trade per quarter;
- Maintain at least a $250 balance
- Cost of trading individual stocks is $0.01/ share or a minimum of $4.95, up to a maximum of $9.95 per trade. This includes selling an ETF.
Virtual Brokers - Kick Start Investment Program
A service offered to those that want to get into a habit of investing their money every month. You specify up to five (5) securities you want them to automatically invest in for you each month. The minimum monthly contribution is just $100.
- $50 annual fee, unless you are a recent graduate (within 2 years of graduation), then this is waived
- Commission-free (up to five securities each month)
- Dividend re-investment plan is $1.00/month/account (so if you have both TFSA and RRSP accounts with them, it will cost you $2.00/ month)
Questrade vs. Virtual Brokers Comparison Table
Big Six Banks' Investment Accounts
The big six banks all offer similar services and charge similar fees – the main deal breakers for me are:
- No commission-free purchases of ETFs, so each time you purchase, you’re paying anywhere between $7-$10 ($25 for Scotia – yikes!)
- To avoid maintenance fees, which is $100 per year, you need to maintain a minimum balance. This can be anywhere between $15,000 to $25,000. OR, if you have certain banking products/ services with them, they may waive this fee for you/
Which One Should I Choose?
- If you want the lowest commission and minimal fees go with Questrade.
- If you want to go with an automatic investment program, where you specify which securities you want to buy every month, and how much to invest each month (minimum $100 per month) go with Virtual Brokers’ Kick Start Program. This is free for recent graduates (or current students), and $50 per year for everyone else. Keep in mind, if you decide to opt out of this program, the account minimum is $5,000 in order to avoid the inactivity fee.
- Both of these brokerages are great if you plan on investing your money every month into ETFs because they both provide commission-free purchases on all ETFs.
- Both Questrade and Virtual Brokers provide a dividend re-investment plan, where they automatically re-invest the dividends earned from the stocks/ ETFs you own at no cost. This service is free with Questrade. Virtual Brokers charge $1.00/ month/ account.
- The banks’ brokerage services are higher in fees and it does not require a minimum to open an account. If you have certain banking products with them, some of these fees are waived. Regardless, they do not offer commission-free ETF purchases. There is no minimum requirement to open an account with the banks, but if you are wanting to open an account with less than $1,000, it doesn’t make sense to be paying $10 per trade either. You’re better off trying to scrape together your first $1,000 and then opening an account with Questrade or Virtual Brokers.