The Loonie Bin: Adventures in Investing: Part Deux

The Loonie Bin: Adventures in Investing: Part Deux

Adventures in Investing: Part Deux

Last time I talked about what your priorities should be before investing any extra money. Once you have zero credit card debt, and you have a plan to contribute extra money to your mortgage, it's time to get more out of your TFSA by using it to invest and increase your overall return. But where does one begin?

Depending on your location, you may be limited to which discount brokerage you can deal with. I myself like going to a physical building and talking to an actual person when dealing with investing. There are many discount brokerages that have no physical location and you end up sending a cheque or transferring funds to them. This allows you to pay cheaper commissions, but always look out for added fees that are in the fine print. I'll list a few of the more popular discount brokerages that you can use.

ScotiaItrade- Part of Scotia Bank, they have Tax Free Trading Accounts with no annual fee. You can also open RRSP and cash trading accounts. If you transfer your existing Mutual Funds(Yuck) to an RRSP trading account and have a minimum $50,000 in assests, you pay $9.99 a trade. A steal of a deal. Nothing mentioned about a annual administration fees either... I might have found my new brokerage service!


RBC Direct Investing - RBC has Tax Free Trading accounts as well, but you must have a minimum $25,000 in your RRSP accounts to waive the $75 annual maintenance fee. You need to have $100,000 in assets to get the 9.99 commission rate, otherwise it's 28.95 per trade. They do allow you to hold US funds in RRSP accounts with no currency conversion fees.


TD Waterhouse- I'm assuming the Tax Free Trading accounts are no annual fee as well. You have to have $25,000 in your RRSP trading account to waive the annual maintenance fee. You pay $29 per trade unless you have $100,000 in assets, then you only pay $9.99. I hope TD gets off their high horse and allows you to hold US funds like RBC does.

Quest Trade- No annual fee on any account you open. Commissions are $4.95- $9.95 and there are no currency conversion fees. No physical location so you have to send them a cheque or transfer funds. Be wary of fine print fees. Very popular to DIY investors.

BMOinvestorline- It says no fee TFSA. You must have $25,000 in your RRSP trading account to waive the $100 annual maintenance fee. You pay $29 per trade unless you have $100,000 in assets, then you pay $9.99 per trade. I'm sure they charge currency conversion fees for US stocks.

CIBC investorsedge- Starting Sept 2011 there's a $50 annual admin fee for all new Tax Free Trading Accounts, existing investoredge accounts will be exempt, so open one now if you don't want CIBC eating your future profits. They allow you either to pay $29 per trade, or you can pay $395 a year for 50 Trades(Works out to $7.90 a trade) Then $6.95 per trade if you go over your pre-paid trades. $100 annual fee if you don't have a minimum of $25,000 in your RRSP trading account.

Wow, that was painful reading through all those bank websites. Do your own homework, read through for yourselves and find one that works for you. My advice for people new to self investing is make an appointment with an actual representative from the brokerage service you choose. Tell them you want to become a self directed investor and have them go over the types of accounts you want to open. Write down any questions you may have beforehand and make them regret asking "Are there any questions?". Find out about the fees and maintenance charges. I also advise people new to investing to find a discount brokerage that has good customer service and investment seminars to learn the ropes before going full throttle into investing in the stock market. Just don't ask what stocks to buy as that service is not included when paying discount commission. I hope this helps those looking to start investing for themselves and let their nest egg grow, middleman-free.