Last week, I reviewed RBC Direct Investing to complement Million Dollar Journey’s series of posts covering discount brokers and in this post, I’ll offer my thoughts on TD Waterhouse. We got our first account with TD Waterhouse when the broker purchased the Canadian arm of Ameritrade, which used to offer $10.99 trades for US equities, the lowest commissions at that time. Currently, we have all our self-directed RRSPs with TD Waterhouse for reasons I’ll explain below.
Fees and Commissions
TD Waterhouse charges a commission of $29 (inclusive of all fees) on trades of up to 1000 shares for market and limit orders. Self-directed RRSPs are charged an annual administration fee of $100 if the value of the account is less than $25,000. A quarterly fee of $15 is charged on investment accounts with a market value of less than $5,000, which is waived in some cases. You can refer to the full fee schedule here.
Mutual Funds, GICs and Money Market Funds
TD Waterhouse offers a wide selection of in-house and third-party mutual funds and GICs including the TD e-Series funds, one of the lowest-cost index mutual funds offered in Canada.
Forex Exchange Rates
The exchange rates charged by TD Waterhouse is about 1%.
Trading Features
TD Waterhouse offers a very basic web-based trading platform with real-time quotes for all the major exchanges but does not offer real-time charts. I am not a trader and hardly make 10 transactions in an average year, so this is hardly an issue for me.
Conclusion
We recently moved our registered accounts to TD Waterhouse from RBC Direct Investing to take advantage of “wash trades“. As far as I know, TDW is the only broker that allows you to avoid the currency conversion fees when you sell an US equity and buy another within your RRSP, which would typically end up costing 1% on each conversion and could cost more than the trading commissions.
Reviews of the competition: Questrade, CIBC Investors Edge, Interactive Brokers, BMO InvestorLine, Credential Direct, Qtrade, Questrade, RBC Direct and Scotia Direct.
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15 responses so far ↓
1 Ahmed // Jul 23, 2007 at 9:12 am
Can you do online USD cash transfers in and out of your account? This is something that Scotia Mcleod recently added. Before, I had to call them to move my USD cash to/from my Scotia USD chequing account.
Besides the commission, overall I’m quite satisfied with SMDI.
Ahmed
2 MillionDollarJourney.com // Jul 23, 2007 at 9:47 am
CC, thanks again for the links. Have you done the “wash trade” process a few times? Does it take a bit longer to do a wash trade transaction than a regular transaction?
3 Phil S // Jul 23, 2007 at 10:43 am
Just this past weekend, I mailed in the application to open a non-registered Questrade account. I intend to continue to maintain both my registered and non-registered Investorline accounts at BMO. I have a buy & hold philosophy so I don’t expect it to cost me much money to keep them open. For my registered account, I mainly only hold large and mid-cap companies and bonds in it so I’m not quite as pissed off at the high commissions as I usually don’t buy more than 1000 shares in a single transaction.
For my cash account, I generally like to buy large blocks (meaning 3000 to 5000 shares at a time) of small and micro-cap stocks. And it was extremely annoying to pay $100 of commissions on, for example, a $2000 speculative transaction. That’s 5% of the entire value of the investment!!! It’s hard to make any money when you lose 5% right up front! So, all of my future non-registered trading will be taking place in my new Questrade account, since it’s a $9.95 flat fee regardless of how many shares you buy.
The big difference between Questrade and E*Trade is that Questrade’s minimum balance is only $1K as opposed to E*Trade’s $50K minimum in order to qualify for the $9.95 flat fee.
4 Dave // Jul 23, 2007 at 11:16 am
I should mention that one advantage of not being able to do wash trades is that it will force you to trade less, thus lowering your costs.
5 Canadian Capitalist // Jul 23, 2007 at 12:38 pm
Ahmed: I am not sure I will be able to transfer USD cash within the SDRSP account. I usually buy USD equity outside and do a transfer in-kind.
MDJ: Our RSP accounts just got transferred to TDW. I am about to do the wash trades, so I’ll let you know how it went.
Phil: Good point. I have actually initiated a transfer of taxable accounts to Questrade. I usually buy 100 shares or less, so I am going to like the $4.95 commissions.
Dave: Yes, it will discourage trading but I want to convert all my US equities into ETFs. Once that’s done, I won’t really care much for the wash trades feature.
6 Nabloid.com // Jul 23, 2007 at 10:38 pm
Yes, I have heard only good things about TD Waterhouse… I’m with CIBC Investors Edge and they don’t even offer L2 QUOTES!
Argh.
7 Friday Linking - Stock Trading Edition - Million Dollar Journey // Jul 27, 2007 at 3:31 am
[...] Canadian Capitalist has written a review of TD Waterhouse. [...]
8 CanadianTrader // Aug 22, 2007 at 12:38 pm
Nabloid -you heard only good things about TD Waterhouse? Where, from who???? TD? I can only compare them to a few brokers I have been with (BMO, Scotia, Interactive Brokers, Ameritrade…) but they are the worst of the small bunch I have tried. Unless, I am missing out on something, TD does not offer L2 Quotes either. Maybe in rheir “active trader” platform, which I have only used for like 10 days last year, for which I refuse to pay 99 bucks a month for. It is not worth it.
That’s just personal experience however, it really depends on what type of investor/trader you are and what it is that you are looking for in a broker.
9 Dave // Aug 22, 2007 at 4:42 pm
omg d00d! l2 quotes r teh b0m!
10 Canadian Capitalist // Aug 22, 2007 at 11:01 pm
CT: I recently moved our RRSP accounts into TD Waterhouse and I am very happy. I couldn’t care less about L2 quotes (I don’t even know what it means). I am not a trader and I make a handful of transactions every year. I would rate TD’s customer service to be the best among brokers I’m familiar with (RBC, E*Trade and now Questrade).
11 Karter // Nov 9, 2007 at 9:06 pm
what is questrade and what are the pros and cons of it?
12 Barry Roberts // Feb 21, 2008 at 4:18 pm
TD Waterhouse is the worst. I bought some US share in my Canadian dollar account. I was charged 2.3% as a conversion fee. What a scam. Check out Interactive brokers much much much better.
13 How to “Wash” Your Trade? // Apr 16, 2008 at 4:09 pm
[...] you have a Self-Directed RRSP account with TD Waterhouse (read my review), you will be able to sell a US-listed stock and park the proceeds in TD US Money Market (US$) Fund [...]
14 E*Trade Quietly Offers Limited Wash Trades // May 21, 2008 at 4:30 pm
[...] sent me an e-mail noting that E*Trade has joined TD Waterhouse and Qtrade in offering some form of “wash trade” capability when buying and selling US [...]
15 Limited Wash Trades at Credential Direct // Jun 3, 2008 at 5:05 pm
[...] It is surprising that Credential Direct’s wash trading is limited when its competitors like TD Waterhouse, Qtrade and E*Trade do not have restrictions based on the size of the [...]
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