E*Trade is trying to inject some badly needed competition into the Canadian discount brokerage industry, where the major players owned by the big banks have a comfortable oligopoly. As described in an earlier post, E*Trade now charges a minimum commission of $19.99, which is the lowest among the big brokerages.

Now, E*Trade is raising the stakes in its bid to lure more self-directed RRSP accounts from the big banks by:

  • Eliminating the annual administration fees on self-directed RRSP plans. In contrast, RBC Action Direct (for example) charges $50 if the market value of the plan is less than $25,000.
  • Giving $5 for every $1,000 in assets transferred in, up to a maximum of $500.
  • Offering to pay transfer fees up to $125 (though I think only accounts of $25,000 or more are eligible).

I think the new E*Trade offer is very attractive and I am definitely considering moving our RRSP accounts. With the elimination of the foreign property rule, I think E*Trade can become an even more attractive option by offering trading in US dollars in RRSP accounts.

Full Disclosure: E*Trade (ET) is one of my top five holdings.