Questrade Review: The Best Canadian Discount Broker

When it comes to discount brokers in Canada, one of the best options available is Questrade. Yes, there are a number of discount brokerages out there, and you can probably even open a brokerage account with your bank. However, not all of them come with the ease of use and the low trades associated with Questrade.

I use Questrade myself for my TFSA and as a non-registered investment account. This Questrade review goes into detail on why I consider Questrade to be the best Canadian discount broker.

Questrade Review: The Best Canadian Discount Broker

Costs Associated with Questrade

Because most traders are interested in the bottom line, I’d like to start with the costs associated with Questrade. Any broker is going to charge some sort of commission or fee. However, Questrade is very competitive in its pricing. You won’t have to worry about hidden charges.

One of the best things about Questrade is the fact that you can trade ETFs for free. Completely free. Starting in February 2013, Questrade started offering ETFs at no charge. As one of the investments growing in popularity, the fact that ETFs are free is a big deal.

Stocks trade with $4.95 per trade commission, plus 1 cent per share. However, there is a $9.95 maximum charge on your order, so you don’t have to worry about things getting out of hand. This is Canada’s lowest commission structure. It’s also possible for you to trade stocks for a flat fee of 95 cents if you subscribe to an advanced market data plan from Questrade. This is an option that can suit active traders, since many active traders want access to this type of market data anyway, and the trades can be much cheaper when you trade actively. The $4.95/$9.95 maximum is best for buy and hold traders who are building a long-term portfolio.

International stocks cost 1% of their trade value in commissions. You can also trade Canadian IPOs for the same cost as regular stocks, but you need to add another $25 to that, and have a minimum order size of $5,000.

Questrade also offers options at $9.95 per trade plus $1 per contract (or $6.95 plus 75 cents per contract with the market data plan). You can also get involved with forex trading, where the commission is based on the spread, and not directly charged to you. Debenture trading costs $30 per trade, and you will pay $19.95 per trade for gold.

For those who like mutual funds, the cost is $9.95 for online trading. You have to add another $25 trader fee if you call in. However, with ETFs trading free, it might make more sense to go that route for funds, rather than use “traditional” mutual funds. You can also traded bonds, GICs, and CNSX securities for $30 a trade.

Your best deal is going to be stocks with Questrade. However, the other pricing options aren’t out of line for the industry.

You can get more pricing information from the Questrade site. This includes some information on the inactivity fee of $19.95 each calendar quarter if certain conditions aren’t met.

Open Account

Signing Up for a New Account

Questrade offers you the ability to sign up quickly and easily. As with opening any financial account, you have to provide some personal information, so it makes sense to gather your needed information ahead of time so that you complete the process a little bit quicker. Here is what you need to open your account:

  • Social insurance number
  • Bank account information
  • Employer details (or other source of income)
  • Other basic personal information including name, address, birthdate, etc.

You will need to create a user ID and password when you start signing up. You can use this information to return and complete your application if you are interrupted for any reason during the process. The online submission is quick and secure. While you could print out your application, that just leads to the chance of mistakes and illegibility, not to mention the possibility that the information is lost in the mail. Use e-Signature and submit online, and the process is secure.

You will need an initial deposit to get started, and the minimum depends on what you are trying to accomplish. Just to trade stocks, there isn’t a minimum, although you should keep in mind that your account needs a $250 equity balance to remain in good standing. You will have higher minimums if you want to trade forex, or if you want a margin account. Other types of trading require even higher minimums.

It’s easy to fund your account with the help of EFT, broker-to-broker transfer, wire transfer, pre-authorized deposit, and cheque. You have to be careful about sending USD amounts to your Questrade account, though. You will need a pre-authorized deposit agreement in that case, since EFT isn’t available.

Realize that Questrade represents the only brokerage in Canada that will accept and hold USD in registered accounts. If you want to avoid conversion fees, and you use USD, Questrade can be a great choice.

Once you have your account, it’s fairly easy to navigate the site, log in later, and access your account. It is kind of annoying that you have to keep using the drop down box on every page in order to visit your accounts. This gets a bit tiresome if you have multiple accounts.

Trading Platform

Questrade spent a lot of time updating and upgrading its trading platform. Now there are three main options for trading:

  1. Web: You can use IQ Web, the web-based platform that uses Silverlight. This allows for fluidity and security, but the main downside is the fact that Microsoft recently announced that it will be retiring its support for streaming Silverlight by 2020. So at some point this might not be the best option. Otherwise, though, there is plenty of power and usability with this version of the platform. There is an option for Linux users and others that don’t like Silverlight: IQ Essential, which is HTML5 based.
  2. Desktop: What’s great about the IQ Edge desktop version is that you can open unlimited workspaces to better utilize your customizable trading environment. You can also chose from a whole menu of options trades, which makes it easier for many traders.
  3. Mobile: As you might expect, this is Questrade on the go for your mobile device. You can get if for Android, iOS, Blackberry, and Windows phone. Plus, you can get it as an HTML5 web app.

Overall, Questrade is a great option for most Canadian investors, I’ve used them for a few years now and highly recommend them.

Open Account

Written by Tom Drake

Tom Drake is the owner and head writer of Canadian Finance Blog. While you’re here, consider signing up for the RSS feed or email subscription. Both deliver the latest articles directly to you! You can also follow me on Twitter for all the latest posts or to send me any comments or questions!

4 Responses to Questrade Review: The Best Canadian Discount Broker

  1. There is a definite downfall to Questrade when it comes to OTC stock:

    1) There is a maximum % of average volume that can be purchased on a given stock (eg. IMSC is my current best stock to own right now & based on average volume, the maximum shares you can purchase @ this time is 9K, which isn’t very much when the stock sits currently @ 1.15)

    2) when buying an OTC stock (like IMSC) you can place your bid @ the ask & still not get it… I can’t understand why… something to do with the “money makers”. I have a friend who had a bid for IMSC with QT @ 1.13, 3 hours later you can see trades go through @ 1.12 & he still didn’t get his shares

    But when I buy through TD I have no limit on how many IMSC stock I can buy & my bid is instantly put on the board, so I know if I place my bid @ the ask price, I will get my shares

    But I do agree that with Questrade’s free buy of ETFs & normal stock trades are AMAZING! I only went with TD because ETFs were not free to buy not so long ago & I’m only staying with TD because of the OTC factor

  2. I was going to make the same comment regarding the #1 downfall that Gary had talked about. I just don’t see why you would use a brokerage that puts a limit on purchased investments when you can go with so many others that don’t. Maybe it’s a cost thing? But I would rather pay a little more to get a little more out of it, in my humble opinion. That IS just me though, and I can understand that QuestTrade has some huge benefits for those that are really watching their bottom line carefully.

  3. It might be worth updating the article as Questrade is no longer the only broker with US Dollar registered accounts.

    Cheers

  4. Re above comments – that was typically a problem, but they seem to be looking the other way now on the illiquid rule – I’ve had it come up maybe twice in last 4 months and traded plenty of stocks with zero volume prior 20 days. As for better choices, nope, not if you play OTC, Questrade is best in Canada – good luck buying with any others unless you like the clunky RBC. Regarding filling OTC – that is a common problem everywhere – its manipulation by MM’s – only the best US brokers with routing allow better execution.

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