Online Brokerage Price Wars Spell Savings for Investors

It’s been an interesting two months for investors trying to pick an online brokerage. RBC Direct Investing decided to start a price war and it soon heated up – the best thing is that the fighting has resulted in savings for investors.

RBC Direct Investing Drops the Trading Fee for All Customers

RBC Direct Investing was the first company to make a major price change recently. This January, they reduced the cost to execute a trade to $9.95 for all of its clients, regardless of their account balances. So if one of their clients wants to buy 57 shares of BCE it will cost them just $9.95 plus the current trading price for 57 BCE shares.

TD (Waterhouse) Direct Investing Follows Suit

The next to drop its fee to $9.95 for all customers was TD Direct Investing. They changed their fees in February.

BMO InvestorLine Folds

InvestorLine has now also dropped its fee to $9.95.

Scotia iTrade and CIBC Investor’s Edge Are Still Studying Their Hands

As of today, February 11, 2014, iTrade and Investor’s Edge still require a minimum balance or a certain activity level or other related assets for their clients to qualify for $9.95 trades.

I give it about another week before they see the way the cards are falling.

Warning! Check for Minimum Balance and Inactivity Annual Fees

Don’t let the price per trade be the only factor in your decision to pick a brokerage. Look at all of the costs, including any fees for having a small balance or for not being an hyper-active trader.

I discuss the required minimum RRSP balances for most brokerages in Questrade Has the Lowest Annual Fee RRSP Brokerage Account with No Minimum Balance: Or Does It? but you should always double check for changes before opening an account.

Discount Online Brokerages Vs Big Bank Online Brokerages

There are a variety of other brokerages available to Canadians some of which offer trading fees which are even lower than $9.95. Their offerings vary considerably so you should check the details carefully. It’s also a good idea to look for reviews of their services and for any complaints before enrolling. (That holds true for all brokerages, independent or bank-affiliated.)

What Are Some Other Key Cost Differences Between Online Brokerages?

  • RBC Direct Investing has a good RRSP offer: If you sign up for pre-authorized contributions of $100 or more per month, the fee for having a low balance in your RRSP is waived.
  • CIBC Investor’s Edge has a no annual fee, no minimum, RESP account.
  • RBC Direct Investing and BMO InvestorLine let you have a USD side to your RRSP for no fee.
    CIBC Investor’s Edge and TD (Waterhouse) Direct Investing do not have a USD side to their RRSPs.
    Scotia iTrade charges a fee for a USD side to their RRSPs.

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Are you pleased to see the costs to trade stocks and ETFs dropping for low asset investors at the “Big Bank” online brokerages? Please share your views with a comment.

Bank Fees BMO, CIBC, RBC, ScotiaBank, TD

Every time I try to write an article about banks I end up looking online for the fees for a service or offering. It’s horribly frustrating because the banks are very good at NOT clearly linking to their fee, charges and commissions pages. So for my benefit and hopefully yours I’m going to list where I found the bank fees for BMO, CIBC, RBC, ScotiaBank and TD.

Don’t Trust Banks: Always Check the Fees

Always, always, ALWAYS, call a bank you’re interested in and talk about the current and proposed fees before making any choices. The fees seem to be changing on a monthly, if not weekly, basis. And frankly most of the changes are increases in existing fees and adding brand new never thought of before fees.

Many banks will also waive fees if you talk to them about what business you are bringing to them. They may also have fee “bundles” where you can get several fee-costing services for one lower price. Unfortunately, it seems like if you want to pay the lowest fees you need to talk to a real live human being.

Where to Find the Fees for the Big Five Canadian Banks

As of August 5, 2013, these are all the website pages listing fees that I could find. There may be more:

Bank of Montreal

Account Fees
http://www.bmo.com/home/personal/banking/everyday/fees-agreements

Additional Fees and Services
http://www.bmo.com/home/personal/banking/everyday/fees-agreements/add-services-fees

CIBC

Personal Account Service Fees, April 1, 2013
https://www.cibc.com/ca/pdf/personal-acct-service-fees-en.pdf

Additional Service Fees
(Statement; Plus; VISA; Account Management; Account Closing; Travel; Gifts; Personal Banking Services and Fees; Dormant Inactive Accounts; Miscellaneous)
https://www.cibc.com/ca/chequing-savings/additional-fees.html

RBC

Chequing Accounts
http://www.rbcroyalbank.com/products/deposits/banking-accounts.html

Savings Accounts
http://www.rbcroyalbank.com/products/deposits/savings-accounts.html

Fees for Additional Services
http://www.rbcroyalbank.com/cgi-bin/intelliresponse/ask.cgi/frame/set?question=What%20are%20the%20service%20fees%20associated%20with%20my%20account%3F&id=2581&content_url=http%3A%2F%2Fwww.rbcroyalbank.com%2Fproducts%2Fdeposits%2Fadditional-services.html

Save on Bank Fees
http://www.rbcroyalbank.com/products/deposits/save-on-your-bank-fees.html

MultiProduct Rebate
http://www.rbcroyalbank.com/products/deposits/multiproduct-rebate.html

Popular Bundles
http://www.rbcroyalbank.com/products/deposits/popular-bundles.html

ScotiaBank

Account Fees at a Glance
http://www.scotiabank.com/ca/en/0,,16,00.html

TD

Account Related Information and Administration Fees
http://www.tdcanadatrust.com/document/PDF/accounts/513796-20130803.pdf

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Have you discovered yet another place the banks hide their fees? Please post a link or a comment to share with the rest of us!