Canadian citizens looking to invest online in the stock market have a variety of options. Online brokers come in different flavors, from deep discount to full service, while others are known for their trading tools or research.
When it comes to investing in Canada, the Toronto Stock Exchange (TSX) is most often cited because it is the 12th largest in the world, with nearly $2.25 trillion in total assets, according to Wikipedia. In most cases, Canadians also have easy access to trading securities on both the NYSE and NASDAQ exchanges in the United States, which are the largest and second largest in the world, respectively.
Canada's Best Online Brokers 2020
Here are the top five brokers for trading stocks in Canada.
- Questrade - Best Overall
- Qtrade Investor - Best for Research
- Interactive Brokers - Best for Professionals
- TD Direct Investing - Diverse Trading Tools
- CIBC Investor’s Edge - Transparent Fees
Stock Trading in Canada
To service Canadian residents, online brokerages must be licensed as securities brokers in Canada and maintain a physical presence. The brokers we found that meet these requirements include (in alphabetical order): BMO InvestorLine, CIBC Investor's Edge, HSBC InvestDirect, Interactive Brokers, National Bank, Qtrade Investor, Questrade, RBC Direct Investing, Scotia iTRADE, TD Direct Investing, and Virtual Brokers.
Herein we will break down the best online brokers available to Canadian residents looking to trade stocks online in Canada and the United States.
Best Canadian Online Brokerages
4.5 Stars - $.01 per share ($4.95 min / $9.95 max)
For residents of Canada, Questrade is the best online broker for trading, not only on the Canadian stock market, but also the US stock market. The client experience is seamless, the tools are numerous, and commissions are competitive. Read full review
4.5 Stars - $8.75 per trade
Behind Questrade, Qtrade Investor also shines for its user-friendly website and all-round client experience. Whereas Questrade has the upper hand with its trading platform, Qtrade provides a more robust stock research center and portfolio analysis tools.
Interactive Brokers Open an Account
4.5 Stars - $0.005 per share ($1 min / 0.5% of trade value max)
Current Offer: Trade on over 100 market centers in 24 countries.
While Interactive Brokers is not suitable for casual investors, it leads the industry in international trading and the low-cost commissions professional traders prefer. No online broker in our review matches Interactive Brokers in fees and trading tools. The Trader Workstation (TWS) platform is used by professionals and institutional traders around the globe. Read full review
TD Direct Investing
4 Stars - $9.99 per trade
As the most expensive broker in our review, TD Direct Investing offers investors a diverse set of trading tools and research through its WebBroker and Advanced Dashboard platforms. The broker’s mobile app, TD App, provides a similarly clean experience.
CIBC Investor’s Edge
4 Stars - $6.95 per trade
For casual investors looking for low-cost trades, who are willing to use a broker without all the bells and whistles, CIBC Investor’s Edge is worth considering. The broker is noteworthy for its transparent account fees and low trading costs across the board.
Trading Differences: Canada versus the United States
Trading stocks online in Canada is similar in many ways to trading as a US resident in the United States. Canadian investors fund an account, make a deposit, then place trades through a web or desktop platform, manage a watch list, and conduct research, just as US investors do.
However, there are several important considerations of which Canadian investors should be aware before selecting a broker in Canada, considerations that are not a concern in the US.
- Annual fees – In the US, it is very rare to see an online broker charge annual fees (also listed as inactivity fees or maintenance fees), whereas in Canada every broker does. Questrade is the best in this area, as only $1,000 across all accounts is required to avoid an annual fee. In contrast, for example, Scotia iTRADE, HSBC, BMO InvestorLine, and CIBC Investor’s Edge all require at least $25,000 for RRSP accounts ($10,000 for non-registered accounts) to avoid paying an annual fee.
- Mobile app availability – While every online brokerage offers a mobile app in the US, in Canada not every broker does, and the quality can be dramatically different as far as features go. Several of the largest Canadian banks, including HSBC and National Bank, do not offer clients a separate downloadable app for mobile trading at all.
- Trading tools and platforms – The larger Canadian brokers do a good job with stock research, thanks to their use of popular third-party providers such as Morningstar and Recognia, which are also widely used in the United States. However, actual trading tools and platforms can vary significantly among brokers.
- Order types – Market orders, limit hours, and stop orders are standard across the industry. However, trading US stocks from Canada can vary from broker to broker in terms of what is available. This includes after-hours trading. Advanced order types, such as conditional orders, will also vary from broker to broker.
- Banking services – Banks that offer online trading in the US (for example, Merrill Edge through Bank of America) provide a seamless client experience. Moving money between accounts, changing between bank and brokerage accounts through one login, tax reporting, and similar functionality are all expected to be present as part of the holistic trading experience. This also flows into in-person service at a local branch office. In Canada, the client experience can vary significantly from bank to bank.
How to Select a Good Canadian Brokerage
Canadian brokerages work hard to stand out against one another beyond branding and marketing. What really matters though is the trading experience you receive once you are a client with a funded account.
Here’s a list of tips to keep in mind to help you select the right broker the first time:
- Know your account type beforehand. Are you opening a taxable account or a Registered Retirement Savings Plan (RRSP)? If you are starting with a regular account, as many investors do, then at least take the time to explore the broker’s RRSP offering. In particular, check the minimum account balance (or minimum trade activity) requirement to avoid annual fees, which vary by broker. This way, you won’t be surprised when you go to open an RRSP account later.
- Does the broker offer commission-free ETFs? Exchange traded funds (ETFs) have soared in popularity over the past decade. Thousands of ETFs are available to buy, and many providers – BlackRock iShares, Vanguard, and State Street Global Advisors' SPDR are the three largest issuers – now partner with brokerages to make their ETFs commission free to customers. Questrade, Qtrade, National Bank, and Scotia iTRADE all offer them. Our research determined that Questrade has the best all-around offering of commission-free ETFs.
- Make sure your broker supports the asset class you want to trade. If you only trade stocks, options, or funds, then no problem; any broker will service you. However, if you want to trade complex options, forex, or futures, you will need to do your research ahead of time.
- For active traders, read the fine print to compare potential service benefits. Discounted commissions are just one perk of being an active trader. Some brokers will increase the quality of the market data being streamed into the account. Others will grant access to better research tools or offer dedicated customer support. For seasoned traders, Interactive Brokers is king, thanks to its ultra-low trading costs and excellent trader tools.
- Customer service. When contacting a brokerage for account-related inquiries, all investors look for fast connection times and helpful representatives to assist them. Like all businesses, support quality and timeliness can vary. For a quick gauge, once you narrow down your selections to two, call both brokerages on the phone and ask them both several questions. This speedy exercise may reveal a lot about what to expect as a client. Tip, call shortly after the stock market opens if you can, which is traditionally when support is busiest.
- Account Security. Is two-factor login available? What is the broker’s security policy? How are your assets protected and secured on an ongoing basis?
Best Canadian Brokers Summary
|Online Broker||Best For||Commission||Overall Rating|
|Questrade||Best Overall||$.01 per share||4.5 Stars|
|Qtrade Investor||Best for Research||$8.75||4.5 Stars|
|Interactive Brokers||Best for Professionals||$.005 per share||4 Stars|
|TD Direct Investing||Diverse Trading Tools||$9.99||4 Stars|
|CIBC Investor's Edge||Transparent Fees||$6.95||4 Stars|
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