I asked reader Dan if he would be willing to share his thoughts on Credential Direct, a brokerage with which he is familiar and I am not. Dan wrote back with the following review (Thanks Dan!). You can also check out the reviews of other discount brokers: Qtrade, Questrade, RBC Direct, TD Waterhouse, BMO InvestorLine and Scotia Direct.

Last fall I started to look around for an online broker for my RRSP account. I was tired of paying $125 for the yearly administration fee, along with the $80 plus sales commission fee. I had an RESP account with TD Waterhouse at the time, so I used it as my benchmark.

Credential Direct was founded in 2000 by Canada’s credit union system. You do not need to be a member of a credit union to open an account. It is a division of Credential Securities, which is a CIPF member.

I was very impressed with Credential Direct for a number of reasons:

Account fees
The first thing that caught my eye was the annual RRSP fee is only $50. This fee is waved with $15,000 or more in the account. There is no inactivity fee. When I opened my RRSP account a Canadian dollar and a U.S. dollar cash account was opened at the same time.

Trading fees
The fee for trading stocks is $19 for 1000 shares or less or a trade value of $2,000 or less.
If you trade 1001 shares or more and stocks priced $1 or less the fee is 1% of the trade value. For trades with 1001 shares or more and stocks priced $1.01 or more, the fee is 2 cents/share. Options are $19 plus $1.25 per contract. The maximum fee is $250. Also if you spend over $2,500 in one month on commissions, you get a 10% rebate. These fees are web based only, add $14 for telephone orders. If you are an active trader online, which is 25 trades per quarter or more, the fees are a flat $9.95. Options would be $9.95 flat plus $1.25 per contract.

Here is a link to an excellent comparison chart with other major online brokers.

Mutual Funds
Credential Direct seems to have access to all of the different mutual funds that you will find elsewhere. CD does not charge any fees to purchase or redeem funds, but the mutual fund could still charge you. The transaction amount must be $1,000 or more or the fund company minimum, whichever is greater. Money Market fund purchases are a $2,500 minimum purchase.

Fixed Income
Credential Direct also seems to offer a wide selection of federal, provincial, municipal, corporate, coupon and money market issues. I am not very well versed in bond sales, yields, etc, thus I can not give much insight into this.

Research
Credential Direct, has a Tools tab which has a portfolio section, technical events section, a technical screener, financial screener, options screener, options valuation section and a mutual fund screener. The technical event section uses the Recognia Technical Analysis service, as does TD Waterhouse.