UPDATE: This article is historical, from 2013. I no longer invest with RBC Direct Investing.
While on the phone asking where my money is, since it left ING Direct on November 7 and it still isn’t in my RBC DI account on November 14, I asked a more important question: “How do I start getting the $9.95 trading commission fee given that I will have $50,000 in my account.”
I remember several years ago when we set up accounts at BMO InvestorLine that we had to wait till month-end after reaching the minimum qualifying balance to get the reduced trading fee. (I suspect you can now phone them and ask to get the fee applied immediately once you qualify, but I’m not sure.) I wasn’t sure if we would have to wait with RBC DI as well or not.
When Will You Usually Get the Reduced Trading Commission Fee Rate at RBC Direct Investing?
The support person told me that generally the computer system will spot new qualifiers. The check is made once a month on the 22 nd day. It checks what the lowest balance was during the previous month. [Which is not what the website says. The website says it will check the asset balance on the last day of the previous month.] If the lowest balance was $50,000 then the account will be upgraded to $9.95 trade status.
Can You Get the $9.95 Rate Immediately at RBC Direct Investing?
Yes. Once you have the $50,000 minimum in your account you can phone RBC Direct Investing support and request a change. They should be able to update your account quickly. (They didn’t tell me *how* quickly, but the implication was it would happen overnight.)
I guess if my money ever arrives in my account I can test this!
UPDATE: It did; I can; and I did. The update was made over night. So the day after I phoned in, when I placed a test trade, the trading commission correctly reported as $9.95.
What Happens If the Market Value of my Portfolio Drops Below $50,000?
While I’m sure your stocks, ETFs and Mutual Funds will always go up in value, mine don’t. In fact, I tend to buy things right before they plummet in value.
So I sent a Secure Message to RBC DI to ask whether the $50,000 qualification applies to the Book Value (when I bought my stocks) or the Market Value (what they’re worth today). I waited with bated breath for their reply.
To my surprise and dismay, they replied “In order to qualify for preferred pricing of $9.95 you must hold $50,000 in market value on the last day of every month.”
That’s right: the *Market* Value of the account must be $50,000 or higher on the last day of every month to qualify for the $9.95 trading fee! So if your stocks take even a temporary dip on the last day of the month you will be back to $28.95 trading fees. It appears that changes in the fees, up or down, occur on the 22 nd of the month after the month-end balance went below or above $50,000.
Frankly, I’m not impressed.
Can I Get the $50,000 Discount by Adding Up My Accounts with my Spouse’s?
Yes. You can ask RBC DI to add up the assets in various accounts held by members of the same household such as you and your spouse. You have to phone them to ask them to do this. It is not automatic.
Where Do I Get $50,000 to Qualify
Of course the hardest part is coming up with the $50,000 to invest in the first place. That’s a lot of packed lunches and skipped designer coffees. With time and patience, though, you may get there sooner than you think.
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Did you get caught paying an excessive brokerage fee because you thought you’d get the better rate immediately once you qualified? Please share your experiences with a comment.
Wow, it’s not often you hear of people leaving ING direct. Maybe you’ve covered it in other posts – but care to share why?
My husband and I actually just started investing with ING’s streetwise funds (first time investors).
Jess
Hi,
We’re not actually leaving ING Direct. I still have money there too. They have the easiest contribution and tax receipt process I’ve ever found, so all our new money starts by being contributed there, then I move some it around. It’s a partial transfer to RBC DI.
We’re much closer to retirement than you so we use brokerages for many of our RRSPs. In particular, I keep a large amount in GICs for security. I can get better rates for those easily by shopping the list of 20+ issuers using a self-directed brokerage account than I can by moving my funds one T2033 at a time to different credit unions and banks.
The Streetwise Funds are apparently a good choice for a one-fund Couch Potato portfolio according to http://canadiancouchpotato.com/2013/09/12/the-one-fund-solution/ . We have funds through defined contribution pension plans at work so our RRSP money is more in fixed income and individual stocks. (We’re ultra conservative investors. We’re not trying to maximize our returns.)
I actually opened an account at RBC DI mostly so I can compare it throughly with InvestorLine and Investor’s Edge. So far InvestorLine seems best to me but they all have strengths and weaknesses.
Good luck with your RRSP. They grow quickly if, like you’re doing, you keep an eye on the fees!
Good post. I suspect others might have similar questions!
Mark
It’s now the 16th of November. My RRSP money was debited from my ING Account on November 7th. I may never need to know how to get lower costs on my trades because I’m beginning to wonder if I will ever see my money again!
Thanks for stopping by.