There are so many reviews on the internet promoting Questrade as the best discount broker but the reality is that many of the top brokers compete head to head with the same features.
Questrade is by far the cheapest and easiest to use but it doesn’t win in all the features. In fact, the best discount broker is the one that meets your requirements as an investor. Unless you have experience with various discount brokers, all you can do is compare fees and some other marketing materials. It’s not always easy to understand all the nuances of a platform such as how US dollars is handled.
The reason there are so many reviews promoting Questrade, and most recently Wealthsimple, is due to the affiliate marketing offered by those companies. Bloggers are incentivized to promote products that pay a small fee if a user signs up.
As it happens, Questrade is the only one offering an affiliate program along with some new robo-advisor platforms. That’s why you don’t see many other discount brokers reviewed aside from Money Sense.
[Disclaimer] Dividend Earner participates in the Questrade affiliate program.
Bloggers try to compete on searches for the Questrade review and promote it with the usual $50 discount code or other promotions running at the time. All of it is setup to get you to click on the Questrade link and get you to sign up. Writers obviously have to make it sound like the best platform if you are going to sign up.
Do your research and understand what you need as an investor. Here is my take from experience with a number of discount brokers but primarily Questrade and RBC Direct Investing.
Important DIY Discount Broker Features
What is really important when it comes to choosing a discount broker is to know what you need. Questrade has some nice features but other discount brokers also have benefits worth knowing. I have over $100,000 with Questrade and over $800,000 with RBC Direct Investing.
I did use Scotia McLeoad in the past along with Scotia iTrade. I opened an account with Questrade to experience it and I am going to share what I like about my current trading platforms. Switching discount broker is also easy and they make it easy and they will also cover the fees in many cases.
In general, the research offered by most discount brokers are pretty much all the same as it’s either sourced from Morningstar or Thompson Reuters. A few institutions have their own research and the best I have seen in the past was from Scotia iTrade.
Best of Questrade
#1 The Low Fees – The fees are the cheapest by far and especially so if you invest in ETFs. I, however, don’t like how they add an ECN fee on trades. It means that free isn’t free. It’s like the added fees you pay on an airplane tickets after you are advertised a lower fee.
#2 Minimum Requirements – Under 25 can open an account and avoid the inactivity fees and the minimum requirements of $5,000. Another good idea is the combined total between linked accounts to avoid the fees.
#3 Free ETFs Purchases – You can purchase ETFs for free which means investors can buy small amounts regularly.
#4 Dual Currency Accounts – Each account supports dual currencies for balances and holdings. US dividends are deposited in the USD cash portion of the account. It’s an important feature if you plan on investing in US companies.
#5 Norbert Gambit Capable – The platform allows for executing the Norbert Gambit to exchange currencies. The process is feasible but it takes a little bit of time for the process and requires requesting journaling the shares.
#6 DRIP Support – You can DRIP shares but it doesn’t support the DRIP discount.
#7 Easy Online Account Creation – Probably the easier account creation flow and process I have gone through.
#8 Text Notification – It’s not required but a nice touch. Often time I get up in the morning (West Coast) and I can see the trade I placed was executed.
Best of RBC Direct Investing
#1 Easy Money Transfer – I can transfer money from the bank (yes I bank there) and trade right away. With Questrade, you have to wait a few days for the money to show up or use a margin account.
#2 Real-time Quotes – A new addition but one that I am pleased with. When I place a trade, I use limit orders to place a market order and I like to use the last price and the ask price to put the price. Questrade has delayed quotes and I have found myself needing to open TMX Money to find the latest price.
#3 Dual Currency Accounts – A very important feature for investing in US companies.
#4 Norbert Gambit Capable – The easiest platform to execute a Norbert Gambit. You can buy and sell the shares right away. The journaling of shares is completely transparent.
#5 DRIP Support – DRIP is supported at the account level.
#6 DRIP Discount – DRIP discount is supported as offered by the companies.
Breakdown Summary
In general, the banks have a stock transaction of $9.95 whereas Questrade is at $4.95 and CIBC is at $6.95. ETFs purchases can be free in many. I don’t do high trade volumes, please look it up and more the reason to know what you need and find the best discount broker for your needs.
Detailed reviews are available for :
| wdt_ID | Discount Brokers | Questrade | RBC Direct Investing | BMO InvestorLine | TD Direct Investing | Scotia iTrade | CIBC Investor\'s Edge | Wealthsimple | Qtrade | Interactive Broker |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Stock Trade Costs | $4.95 | $9.95 | $9.95 | $9.99 | $9.99 | $6.95 | Free + ECN | $8.95 | $1 min. or $0.01 per share |
| 2 | ETF Trade Cost | $0 Buy | $9.95 | $9.95 | $9.99 | Some Free | $6.95 | Free + ECN | $8.95 | $1 min. or $0.01 per share |
| 3 | Dual Currency | Yes | Yes | Yes | Yes | Not Native | ? | Not Supported | Yes | Yes |
| 4 | Synthetic DRIP | Yes | Yes | No | Yes | Yes | ? | No | ? | ? |
| 5 | DRIP Discount | No | Yes | No | Yes | ? | ? | No | ? | ? |
| 8 | Access To Research | Yes | Yes | Yes | Yes | Yes | Yes | ? | Yes | Yes |
| 10 | Account Minimum | $5,000 for all accounts; or Questrade MyFamily; OR under 25 yrs | $15,000 for all accounts; | $25,000 (RRSP); $15,000 (non-registered) | $15,000 for all accounts | $25,000 for all accounts | $25,000 (RRSP); $10,000 (non-registered); $0 (RESP/TFSA) | None | $25,000 | $10 USD in commissions / month, or $100,000 USD |
Overall, I would say that Questrade is the best platform for an index investor or a young investor starting. It’s where you should start. No argument there. As an established dividend growth investor, I prefer RBC Direct Investing as I don’t see the lower fee much of a barrier for my trades. I invest a minimum of $1,000 and the cost is either 1% with RBC or around 0.5% with Questrade. The 0.5% difference doesn’t add up to enough of an opportunity loss to ignore the other benefits.
The ability to execute a Norbert Gambit within minutes through RBC Direct Investing is very important to me. More than 50% of my portfolio is in USD and I need to easily do currency exchange with a minimum cost. I also have to admit that being able to transfer money easily between my bank is very nice.
Many readers have asked for my opinion on TD Direct Investing and I have not used it. I need to know how to execute a Norbert Gambit and if they provide the DRIP discount. Failure to match RBC Direct Investing, I will prefer RBC Direct Investing.
In your selection, up front trade fees is the easy math but dual currency conversion has a significant cost over time that will far exceed your commissions.