The Best Online Brokers in Canada for 2022
In recent years, Canadians have become more aware of the impact of fees on their investment returns, resulting in the rapid growth and popularity of online brokers, also known as “discount” brokers. But with so many online brokers to choose from, how do you decide which one is best for you?
To help you decide, I cover all of the major online brokerages in Canada for 2022 in this article. I will also reveal my top choice for Canadian online broker and let you know why it’s my favourite this year.
What Is An Online Broker?
An online broker is a web-based investing platform that lets investors manage their portfolios and place trades online. You can buy a wide range of securities through an online broker, including stocks, bonds, ETFs, and mutual funds. You can also purchase GICs and other fixed-income securities.
An online broker saves you time and money by removing the need to deal with an advisor in a brick-and-mortar location or over the telephone. Without all the overhead, the broker can reduce fees.
What Is Self-Directed Investing?
Online investing is often referred to as self-directed investing or do-it-yourself investing. While most brokerages have representatives ready to assist with technical questions or system-related issues, there is no advice provided through an online brokerage.
As the investor, you are fully responsible for the investment decisions – something to consider before deciding whether or not to open an online brokerage account. Self-directed investing is not for everyone.
Best Overall Online Broker: Questrade
My choice as the top online broker in Canada for 2022 is Questrade. There’s a lot to love about this online investing behemoth, but it all begins with low-cost trading. After all, isn’t that why you’re dealing with an online brokerage in the first place?
Questrade has the lowest overall fee offering. With most online brokers, basic stock trades start at $9.99; CIBC Investors Edge and Qtrade are exceptions, at $6.95 and $8.75, respectively.
With Questrade, trades begin at a mere $4.95. After that, shares are $.01 each, to a maximum of $9.95. In other words, you would have to purchase hundreds of shares through Questrade to reach the standard pricing of most competitors.
The deal is even sweeter for active traders, as the commission for trades maxes out at $6.95. While most of the competition closes the gap here, Questrade’s starting point of $4.95 still leads the way.
Questrade also offers commission-free ETF purchases. ETFs, or Exchange Traded Funds, have become incredibly popular with investors who prefer a low-cost, passive approach to investing. But most discount brokers charge a commission fee on purchasing ETFs, making them more expensive to buy, especially in small amounts.
With Questrade, you can purchase ETFs commission-free. Also, you won’t pay annual fees on registered accounts, providing you execute one trade or maintain a balance of $5000 across all accounts – one more reason they’ve become a leader in low-cost investing.
Best for Research: Qtrade Direct Investing
Not to be mistaken with Questrade, Qtrade is a highly competitive player in the do-it-yourself investment space. Qtrade beats most big bank brokers by offering regular trades at $8.75.
Where Qtrade shines is with its reputation for class-leading customer service. They make the account opening process a breeze, and the response time of their customer support is the envy of their competition. Unlike some of their larger competitors, they offer live, online chat support. They also have a mobile app.
While trading is relatively cheap at Qtrade, they charge a $100 annual fee for accounts, which they will waive if the balance across all accounts exceeds $25,000.
You can purchase 100 different exchange-traded funds through Qtrade with no commission fee, which may be enough for anyone dabbling in ETFs. Dedicated ETF investors will be better off with Questrade.
Best for New Investors: Wealthsimple
Recently, Canadian Robo-advisor giant Wealthsimple made a splash with Wealthsimple Trade. This mobile-only trading platform allows investors to buy and sell thousands of stocks and ETFs without trading fees or minimum account balance requirements.
It’s one of the cheapest and easiest ways to buy stock in Canada, which is no surprise, coming from the brand that has already made a name for itself with its low-cost, Robo-advisor portfolios.
Wealthsimple Trade is an excellent choice for beginner investors or anyone else who doesn’t mind the limitations of trading on a mobile app. Also, the fact that they offer non-registered RRSP, and TFSA accounts will be enough to satisfy most investors. In the future, you may see more functionality built-in, but for now, Wealthsimple Trade is a great way for beginners to get started with self-directed investing.
Best for Active Trading: Scotia iTrade
Scotia iTrade, formerly known as Etrade Canada, is the self-directed brokerage arm of one of Canada’s largest financial institutions, Scotiabank. iTrade comes to the table armed with very competitive pricing for active traders. Starting at $9.99, prices drop to $4.99 per trade when an investor exceeds 150 trades per quarter.
Scotia iTrade is known to have one of the strongest online trading platforms in the industry. Also, like several of their low-cost competitors, they offer live online chat functionality and telephone support six days per week.
A big knock against Scotia iTrade is its cost-prohibitive for small investors. For example, you must pay a whopping $24.99 to trade stocks unless you hold over $50,000 in assets across accounts or make more than 30 trades per quarter.
Because of the high entry point, well-heeled active traders may be the only ones to benefit from stock trading through iTrade.
Best Usability: TD Direct Investing
TD Direct Investing, formerly known as TD Waterhouse, is the longest-standing self-directed broker in Canada, and in many ways, it shows.
They are in a league of their own when it comes to market data and research tools. In a self-directed environment, access to information is critical to many investors, and TD best presents that insight. The best part is that they make these tools available to clients, not just active traders.
TD is also the only broker, aside from HSBC, that offers access to global trading in markets outside the U.S. and Canada – an attractive feature for sophisticated investors.
Unfortunately, TD Direct Investing doesn’t yet offer a live online chat feature, something that I would like to see them add shortly.
The biggest knock against TD is their very average fee structure. Basic trading begins at $9.99, and the lowest pricing you can get through active trading is $7.00. In a world where Questrade and a few others offer sub $5.00 trading for active investors, their fees aren’t competitive.
Best Customer Service: RBC Direct Investing
Aside from the name, RBC Direct Investing shares similarities to TD Direct Investing. Perhaps it’s because they are Canada’s two largest financial institutions and compete for banking supremacy on several fronts.
RBC’s basic fee structure is similar to that of TD. They will charge you $9.95 for equity trades, while active traders enjoy reduced rates of $6.95 per trade (150 trades or more per quarter).
RBC and TD waive the annual fee on registered accounts if you meet a $15,000 minimum balance threshold across all accounts. The minimum balance requirement is lower than some of the competition but still lags behind industry leader, Questrade.
RBC Direct Investing delivers a strong customer experience, as evidenced by the feedback provided by many online reviews and forums. Their response times are nearly class-leading and offer live, online chat functionality.
They also have several helpful educational tools, including their popular “Show Me” videos. Education is critical in the do-it-yourself investing world, and here, RBC delivers.
Best for Options Trading: Desjardins Online Brokerage
Their options commissions are lower than several of their competitors, including the major bank brokerages. For example, Desjardins pricing comes in at $1.25 per options contract, with a minimum of $8.75.
Many competitors are priced at $9.99 + $1.25 per contract, bringing the total price over $11 per trade. Building on their options strength, Desjardins enables investors to trade options via their mobile app, which many others do not.
Where Desjardins slips is in providing leading-edge mobile accessibility and online resources, such as market research tools. Also, their basic trading fee is $9.95, a far cry from the class leaders. If options trading is your thing, Desjardins Online Brokerage is worth a second look.
Best for Advanced Investors: Interactive Brokers
Interactive Brokers is the Canadian arm of the huge U.S. discount brokerage of the same name. They are an independent broker and not tied to a major bank. Their service offering is geared primarily for active traders, and they do offer very competitive pricing on equity trades.
They charge a paltry .01 per share, with a minimum commission of $1.00 per equity trade. So, as an example, if you purchase 100 shares at $35/per share, your commission is only $1.00.
Sounds pretty impressive, but you need to keep in mind the order sizes and the minimum balance of $10,000 required to open an account. In other words, Interactive Brokers may not be well suited to the small investor.
On a positive note, they do not charge an annual fee on the TFSA account, and the RRSP administration fee is only $50, instead of the $100 charged by several competing brokerages. Learn more in our Interactive Brokers review.
Other Top Trading Platforms in Canada
In addition to the top trading platforms I’ve already covered, the following online trading platforms have plenty to offer Canadian investors.
What we like: Market research capability.
BMO InvestorLine offers standard pricing of $9.95 per trade. However, unlike much of their competition, BMO doesn’t offer reduced pricing for active traders.
To avoid the $100 annual fee on registered accounts ($50 on RESP), you must maintain balances over $25,000. BMO also requires a minimum balance of $5000 to open an account. Given the high minimum balance thresholds, BMO offers more value to experienced or high-net-worth investors than those just starting.
Where BMO excels is in its offering of market and research tools. Their mobile application is also considered one of the best in the game. Learn more in my BMO Investorline review.
National Bank Discount Brokerage
What we like: ETF-friendly broker.
National Bank Direct has made significant strides as a Canadian online broker through its ETF offerings. For starters, they no longer charge fees for buying AND selling ETFs, which is a great feature.
The caveat is that free ETFs only apply to orders over 100 units. Regardless, their free-ETF offering gives National Bank Direct an advantage over several of its competitors.
With National Bank, you can also hold ETFs through Investcube, an affiliated ‘Robo-advisor’; a definite value adds as many online brokerages don’t have a Robo-advisor affiliation.
What we like: Low trading fees
HSBC InvestDirect bests its traditional bank competitors with its lower pricing on trades, both for regular and active investors. Their basic commission of $6.88 is lower than every other online brokerage, except for Questrade ($4.95).
Furthermore, their pricing for active traders is also very attractive, falling to $4.88 per trade for over 150 trades per quarter. You can add $1.25 to these prices for options contracts.
While commission fees are low at HSBC, their service offering contains one major gap – no mobile trading capability. It’s coming down the road, but with almost every other competitor active in this space, it’s a significant shortcoming.
Gaps aside, HSBC does provide one other unique service offering; global trading capability.
They are one of the very few online brokers who provide access to North American markets and the Hong Kong stock exchange – a plus for traders looking for greater access to global markets.
CIBC Investor’s Edge
What we like: Active Trader pricing.
CIBC Investor’s Edge is similar to HSBC in that they have priced their basic equity trading fee at a very competitive $6.95, and they offer active traders with more than 150 trades per quarter an even lower cost of $4.95 to trade.
However, unlike HSBC, CIBC has a mobile app where investors can trade equities and ETFs. They also offer customer support via live online chat during regular business hours.
Unfortunately, some noise has spread online through forums and product reviews, bemoaning CIBC Investor’s Edge customer service levels, precisely response times.
Overall, Investor’s Edge delivers a very competitive commission fee structure, which makes them a company you want to consider, especially if you are an existing CIBC client or you prefer dealing with a traditional bank.
CI Direct Trading (formerly Virtual Brokers)
What we like: No-fee ETF purchases
CI Direct Trading, formerly Virtual Brokers, is an independent trading platform offering commission-free trades for ETFs and mutual funds. They offer no-fee ETF purchases, and stock trades cost only $.01 per share ($1.99 min. per trade to $7.99 max). You can buy or sell options for $7.99 per trade, plus $1.25 per contract. They offer mobile trading (iOS and Android), but reviews of their mobile app are mixed at best.
One nice feature – there are no annual fees for registered accounts or transfer fees when moving money into CI.
Laurentian Bank Discount Brokerage
Generally speaking, Laurentian Bank’s offering in the discount brokerage field is fairly weak. They lag the competition in many areas, including available technology, customer service, and product offering, and they fail to bridge the gap by providing a more competitive fee structure.
For example, their trading fees are $9.95, and they don’t offer high-volume traders reduced fees for trading stocks. Laurentian also lacks a mobile app, they don’t have live online chat, and telephone support is unavailable outside of business hours.
It appears that Laurentian’s existence in the online broker space is simply to provide a self-directed solution for existing clients to access the stock market. If they want to become competitive, they have some work to do.
Choosing An Discount Broker: Factors To Consider
Opening an online brokerage account can be intimidating, especially for new investors. With so many trading platforms in Canada, it can be tough to decide which one is right for you. Here are some key features to look for when shopping for an online brokerage:
- Low Trading Fees: Essential for frequent traders
- ETF-Friendly: Are free ETF trades available?
- Account Administration Fees: Does the broker waive annual account fees?
- Strong Customer Support: How difficult is it to speak to a real person?
A Note About ECN Fees
You may have heard of ECN fees if you are a self-directed investor. Stock exchanges trigger an ECN fee when you buy and sell securities such as equities and ETFs.
ECN fees are charged per share and usually amount to a fraction of a cent per share. While the fees tend not to be significant, they can be confusing, as they are not always triggered.
When Are ECN Fees Charged?
ECN fees are triggered when a trade removes liquidity from the market. One example would be a market order, where the investor is willing to accept the current market price to purchase an investment. This trade would effectively remove liquidity from the market, as it would likely be placed immediately.
While it’s good to know when and why ECN fees are charged, the cost is so low that it shouldn’t have any material impact on your returns.
Which Online Brokerage Is Right For You?
If you’re buying or selling stocks and ETFs, there is no shortage of self-directed trading platforms in Canada. For my money, Questrade is the online broker that checks most of the boxes in 2022, including two big ones – low overall fees and ETF accessibility.
To determine which online brokerages offer the best landing spot for your hard-earned money, the best place to start is to figure out which features are most important to you. From there, narrowing your choices and making a final decision will become much easier.