Best Online Brokerages in Canada

Discover the Magic of the Best Online Brokers in Canada

Online stock trading will never be the same after Robinhood disrupted discount brokers by introducing zero-fee investing. In the second half of 2019, many online brokers decided to follow the same path by either eliminating account fees (or making them negligible for the average user), offering rebates and introducing commission-free trading. Alongside robo-advisors and brick-and-mortar brokerage companies handling large clients, online brokerages in Canada have become the preferred low-cost solution for active traders and average investors who prefer to manage their own TFSAs, RRSPs, and RESPs in real time. Let’s take a look at some of the best online brokerages Canada has to offer.

Some of the Best Online Trading Platforms in Canada

Although low online brokerage fees and free trades are a significant consideration when picking a trading platform, this is only the story’s beginning. An online brokerage must have a responsive and intuitive interface, tools to make trading and diligent research more manageable, and good customer service. With these factors in mind, some online brokerages excel in certain aspects while lacking in others. The quick pick for the best online trading brokerage companies in Canada goes to Questrade, followed by TD Direct Investing,  Scotia iTrade, BMO Investorline, CIBC Investor’s Edge, RBC Direct Investing and Qtrade Investor .

Questrade As Best Overall 

Minimum account requirement of $1,000. Zero fees for those under 25, no fees on exchange traded fund (ETF) buys, and 1 cent per share trading commission. Questrade has a highly sleek mobile performance and excellent customer support. However, it should move on from ECN electronic payment processing network as it accrues more fees per each transaction.

TD Direct Investing As Most Comprehensive

Currently enjoying the most considerable discount brokerage status in Canada, TD Direct has a $9.99 trading fee, with a minimum of $15,000. This may seem as overly burdening, but TD more than compensates with a comprehensive suite of data on the state of markets. This comes in the form of heavy-duty analysis, charts, quotes, market alerts, and research.

Desjardins Online Brokerage For Lowest Fees

When it comes to interest rates, fees, and commissions, Desjardins holds the spot as the best low-cost online brokerage with $6.95 basic + $1.25 contract average commission. Daily active traders are likely to invest with merely a $0.75 commission structure.

BMO InvestorLine For User Experience

BMO InvestorLine continually rolls out new website-friendly features and functionality to enhance the overall customer experience”. They’ve shown a continued focus and effort toward improving the online investing experience.

CIBC Investor’s Edge

With relatively low fees for trades, and discounts for students and active traders, CIBC Investor’s Edge is a brokerage worth considering; however, trading fees are still significant if you make a large number of transactions, especially when compared to some of the other platforms listed here.

RBC Direct Investing

RBC Direct Investing offers the high-end trading platform that you’d expect from the Royal Bank of Canada—the nation’s largest bank. The drawback is that you’re going to pay for the privilege (like with most of Canada’s Big 5 banks) with annual fees, inactivity fees and transfer fees. You can enjoy the same user-friendly platforms and account options for alternative brokers like Questrade.

Qtrade Investor As Best For ETH Trading

Year-over-year, Qtrade continues to upgrade and improve its services. It offers a fantastic user experience combined with analytics tools for market data and ETF investors. Fees are middle ground at $8.75, and the minimum account requirement is $25,000 or only $50 per month for younger clients.

Further Options

You might also want to take a look at Scotia iTrade and Virtual Brokers. The latter practically reduced their fees to zero across the board:
  • no annual or monthly fee
  • minimum investment only $1000
  • commissions only at $0.01 per share ($1.99 minimum per trade)
  • Virtual Brokers is very flexible with their services, so both beginner and expert traders should find it valuable.

Advantages of an Online Brokerage

Older readers may remember Wall Street movies with brokers directly talking to their clients on the phone. This was not only expensive but also highly inefficient and problematic in other ways. Today, online brokerages offer unprecedented benefits for stock traders, such as:
  • Drastically lower fees compared with traditional brick-and-mortar companies, as you can tell from the brokerages listed above — as well as low (or no) minimum balances.
  • Full control in the form of tools and response time. Markets are fickle beasts, so it pays to access a trading platform not to miss a valuable opportunity. With online brokerages, you only need to have a smartphone on your person. Furthermore, an expansive range of tools allows you to assess markets and conduct trades. These smarts tools were non-existent just 15 years ago.
  • Full control also enables you to circumvent brokerage bias. Rely on your analytics tools instead of being herded by brokers who are always on the lookout for commissions by selling you financial products.

Disadvantages of an Online Brokerage

As with social media, constant access to information may become detrimental if you are not careful. Exercise patience and maintain a cool head to avoid premature actions.
  • Graphs and market trends can sometimes trick you if you are too immersed in tracking them every waking second. This leads to overinvesting and offloading. Thankfully, many trading platforms offer customization to restrict orders and other ways to prevent yourself from going overboard.
  • Furthermore, it is no secret that stock trading, just like video games and gambling — overuses your pleasure centers — hitting you with dopamine only for you to seek more thrills. This can create an addictive behaviour, especially with high-risk, high-reward stocks. You don’t want to equalize your stock trading habits with the likes of gambling. We all know who the winner is in such scenarios!
  • Technical issues in the form of bugs and internet connectivity can lead to costly mistakes, such as buying already bought shares. Always pay attention if something seems off when you are using online brokerages.

What to Consider when Choosing an Online Brokerage

You never know if you may end up liking stock trading to the point of becoming an active daily trader or using online brokers a couple of times per year. This is why you see different account setups among online brokerages. To cover all of your bases, consider which feature is the most important to you: online brokerage fees, mobile experience, the breadth of analytics tools? Competition keeps improving the features of trading platforms across the board. Nonetheless, some online brokerages are more competent in some areas than others. Rank your needs accordingly.

Online Brokerage FAQ

What is an Online Brokerage?

A digital platform connected to the Internet and the banking system provides you with all the tools you need to trade in stocks, ETFs, and mutual funds independently. Online brokerages have a significant advantage over traditional brokers in that they charge per trade instead of the size of your portfolio. However, traditional brokerages offer more advanced services, such as tax and insurance structuring.

How to Choose an Online Broker?

Sort out the features of online brokerages, and prioritize them according to your needs.

Do They Offer a Demo Or Practice Account?

A demo or practice account is a type of account offered by online brokers—funded with virtual money that enables a client to test out trading equities with the trading platform and its various features, without incurring fees or losses, before deciding to set up a real account funded with the customers actual money.

Is My Money Safe?

Make sure any brokerage, online or off, or investment dealer you work with is a member of the Canadian Investor Protection Fund (CIPF). As long as you have an investment account with a member firm, you do not need to purchase additional insurance. The CIPF covers customers of Members who have suffered or may suffer financial loss solely as a result of the insolvency of a Member.