A few months back, I moved our investment accounts to Questrade to take advantage of their rock-bottom trading commissions. Since then, the bigger discount brokers (TD Waterhouse, BMO InvestorLine and RBC Direct Investing) have reduced commissions to $9.99 for some of their clients. Since we already have our RRSP accounts with TD Waterhouse and qualify for the low commissions, I have decided to consolidate all our accounts with TD Waterhouse.
While I would probably stick with Questrade if we still paid $29 per trade, a $5 difference is not enough to offset some of the problems faced with Questrade and one big advantage of consolidation:
- Parking Cash: If you are like me, often you have a bit of cash sitting around waiting for the right opportunity to buy and while you are waiting, it’s best to park cash in a money market fund or cashable GIC. With Questrade, depending on your cash balance and trading frequency, the amount you give up in interest earnings may negate any savings on the commissions.
- Customer Service: There must be some very satisfied Questrade customers as it was ranked #1 that category in The Globe & Mail ranking of discount brokers. Let’s just say I am not one among them.
- Funding Your Account: If you mail a personal cheque to Questrade, it may take as long as 20 business days for your account to be funded. While, it is true that there is an alternate way for the funds to appear in your account a little faster, it is still slow compared to TD Waterhouse. You can walk into any TD Canada Trust branch with your brokerage account number and deposit a personal cheque and fund your account within 2 business days.
- Benefit of Consolidation: Today, our RRSPs have some Canadian equities and investment accounts have some international index funds and I would like to swap their location because dividends from Canadian equities are taxed favourably. Of course, you can only swap if you consolidate all your accounts with one broker.
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20 responses so far ↓
1 Jason // Oct 31, 2007 at 10:10 pm
I’m with TD Waterhouse as well, mainly for the funding. My personal and business accounts are already there - so (re)funding is just a few clicks away, and appears to be instant.
Setup time was also very quick. I went into the branch on a Thurs. and was able to trade by Monday.
2 NeverStopBuying.com // Nov 1, 2007 at 12:08 am
Nice of you guys to have 100K in TDW
Note: seems like you need to have 100K asset in TDW for 30 days to start seeing the $9.99 commission, otherwise it’s $29.99 until 30 business days?
3 florch // Nov 1, 2007 at 12:29 am
Good to know that you can take a cheque into TD and have it in your WH account in 2 days.
I typically transfer it in from another bank automatically, but as a transfer instead of a preauthorized payment. While this takes 4 business days, I can adjust the amount without visiting the branch or making a call.
Good idea about the money market or GIC to park cash. I typically buy e-series all the time, but money market may mean less tracking plus being able to buy when there’s a dip while waiting to have enough to buy ETF’s at $10 per trade.
4 jan // Nov 1, 2007 at 2:46 am
Questrade is implementing USD EFT - 1 month time frame
5 D // Nov 1, 2007 at 4:24 am
I’ve been using Questrade, but several of my friends who are serious about trading use Interactive Brokers. It’s 1 cent per share ($1 minimum per trade), and it offers features like options trading that Questrade doesn’t have. I can’t comment on the funding process or the interest rates, but the commission are a killer deal.
http://individuals.interactivebrokers.com/en/main.php
6 larry macdonald // Nov 1, 2007 at 6:21 am
Of course the other thing about TD Waterhouse is extra services like their fairly good stock screener , research reprots, and online facility for buying bonds.
7 FourPillars // Nov 1, 2007 at 7:21 am
I still staying with the Q because of the low commissions and they meet my needs.
I don’t have any accounts anywhere else - if I did then certainly the chance to have all the accounts in one place would influence my thinking.
Mike
8 Rookie // Nov 1, 2007 at 9:46 am
I have used Questrade for 6 months and found it satisfactory. There are some things I would like to see improved, such as the ones CC mentioned, but until I have 100K QT seems like the best option for me. If commissions were to come down across the board(especially at my bank) then I would have to reassess my options.
9 Canadian Capitalist // Nov 1, 2007 at 11:00 am
Rookie: If I were still paying $29 elsewhere, I’d keep my Questrade account. I don’t trade much and I’ve concluded that a $5 difference isn’t worth the hassle for me.
Mike: I found Questrade works as long as you don’t run into any problems or want to do something that is slightly “not normal”. Then it’s like you are Alice in Wonderland. For a $25 difference per trade, I’ll put up with the quirks. But not for a $5 difference.
10 Phil S // Nov 1, 2007 at 11:51 am
I am sort of caught in the middle a bit. I opened a Questrade account with all intentions of using it for all my future trading. But before my first trade on Questrade, BMO Investorline made their announcement of lowering their fees. So, I still have a Questrade account open but it only just has some cash in there to hold it open.
BMO’s interest rate on cash in my Investorline is a measly 1.85% rate the last time I checked. It’s better than 0% interest I guess, but not by a whole heck of a lot.
11 FourPillars // Nov 1, 2007 at 12:13 pm
Not exactly on topic but what kind of trader are you Phil? (I’m just curious) ie how often do you trade - how long do you hold stocks etc?
Mike
12 ceda // Nov 1, 2007 at 9:23 pm
Hi Jan,
You mentioned that Questrade is implementing USD EFT in about 1 month…..does that includes for RRSP accounts? That is, we are able to have both a CAD and USD cash accounts in our RRSPs?
13 noizyboy // Nov 1, 2007 at 10:16 pm
you should consider etrade canada. trades at 9.99 and you get 4.75% on cash that sits
14 Canadian Capitalist // Nov 2, 2007 at 10:31 am
ceda: I believe Jan is talking about transferring USD cash easily between your chequing account and your Questrade investment account. I haven’t heard anything about Questrade offering USD RRSP accounts but there is a rumour that RBC Direct is planning to.
noizyboy: For me, wash trades are very valuable as I sell my US stocks over time and put them into ETFs. E*Trade doesn’t offer wash trades and in any case, their cash optimizer account isn’t available for RRSP accounts.
15 Jan // Nov 3, 2007 at 2:53 am
USD EFT = USD Electronic Funds Transfer, it’s just a way to transfer money from your account to questrade’s account
16 Choosing a discount broker « centsprout // Nov 14, 2007 at 1:38 pm
[...] Adieu to Questrade Canadian Capitalist moved his account from Questrade to TD Waterhouse. [...]
17 Choosing a discount broker « centsprout // Nov 15, 2007 at 2:10 pm
[...] Adieu to Questrade in which Canadian Capitalist talks about how he moved his account from Questrade to TD Waterhouse. [...]
18 Gene // Dec 23, 2007 at 6:18 pm
I am in the process myself of switching my RSP from E*Trade to TD. Both offer swaps, which I like, but I want the ability to do wash trades, too.
There’s no real difference in commissions, so paying the fee to transfer the RSP stings a little, but it will pay for itself with the wash trades. Listen up, discount brokers: your clients want USD denominated RSP accounts!
19 Check Your Withholding Tax // Jan 7, 2008 at 7:00 pm
[...] it doesn’t pay to procrastinate. I wrote about how I was in the process of moving our investment accounts out of Questrade and though I had filled out the transfer forms, I’ve been neglecting to mail the forms to TD [...]
20 davyo // Jan 8, 2008 at 2:28 pm
way off topic but…
Be careful with E*Trade. The parent corp was heavily involved in the subprime mess down south and were just bailed out of bankruptcy at the end of last year.
The high yield optimiser and free trade promotions are a despirate move to keep investor cash. I don’t hink the issue will go away any time soon. I am moving all my capital out of E*Trade to something more stable and secure.
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