TD Waterhouse has announced a new commission schedule effective September 4, 2007:

Clients with household assets of $100,000 or more with TD Waterhouse Discount Brokerage will pay a flat rate of $9.99 per Canadian or US equity trade.

If you qualify for the lower commissions, TD Waterhouse becomes the best choice for consolidating all your brokerage accounts. In addition to the new lower commissions, TD Waterhouse also offers wash trades and the opportunity to invest in the e-Series index funds.

This article has 31 comments

  1. Canadian Capitalist

    You can find the announcement here.

  2. Wow, this is big news.

    I think this will really hurt the newer discount brokerages. I went to Questrade but I have to admit I probably would have gone to TD if they had lowered their commissions a couple of months ago when I made my choice. That said, I’m happy with Questrade and their commissions are still half as much as TD.

    Mike

  3. That’s good news. I also opened a Questrade account as well, but my old broker is BMO Investorline. They only offer their $9.95 flat rate if your investment portfolio is over $500K. I figured why bother trying, I’ll just open an account at Questrade and qualify for the $9.99 rate with a balance of $1K.

  4. Canadian Capitalist

    Mike: My RRSP accounts are with TD and I’ll be looking to move my investment accounts there from Questrade. Yes, I’ll pay $5 more in commissions but I only buy a few stocks in my investment account every year anyways. I frequently make in-kind contributions to RRSPs, so consolidating everything in one account is very attractive.

    I also think the 20 business days holding period at Questrade for USD cheques (there is no other free way to fund your account) is punishing and wipes out any commission advantage.

  5. Canadian Capitalist

    Phil: TD also offered $9.95 commissions for households with over $500K but the new lower limit qualifies a lot more investors. Other discount brokers should be worried and are probably going to quickly follow suit. Still, TD is now a no-brainer as they already offer wash trades and e-Series funds.

  6. This is huge. If the other Big Bank brokerages don’t move quickly to match this deal, there could be quite the outflow of funds. If they later try and match, it will be too late to get their old customers back.

  7. Good point Avg. Joe. Hopefully that happens, and then in order to win clients back BMOIL lowers their fee to $7.99 🙂

  8. Long time lurker, really enjoy your blog. Anyhow, I have been with RBC Direct Investing since about 1997, just because it was easy to transfer money between my regular account and brokerage account, but this new price from TD is too good to ignore. I will be calling RBC and asking for a match in commissions, or I will be moving my accounts.

    One thing that still galls me about TD and all the big discounters is the annual fee for RSP accounts under 25K. I’m in the process of transfering my RSP account to eTrade Canada, just because they don’t charge that insulting administration fee (which I only recently found out). I know I am fed up with having paid that charge, and even if I don’t have to pay it anymore, I am going to make a statement by moving my RSP account.

  9. I just sent an email to E*Trade asking them when they are going to start offering wash trades or the ability to hold US cash in an RRSP. Everyone who has an E*Trade or questrade account, please bug them about this. I hope hoping this move by TD will cause the others to become more competitive. I do not want to move from E*Trade as it is a pain but I will have to in a few years if they don’t react at all.

  10. Canadian Capitalist

    Dave: I have decided to move my investment account from Questrade into TD Waterhouse. I already have my RRSP accounts with them and I am extremely annoyed with Questrade’s long holds on USD cheques without offering other methods to transfer cash.

    I’ve already faxed a letter to RBC that I moved my RRSP accounts because they don’t offer wash trades.

  11. Great news! I hope other dbrokers follow suit.

    Btw… I thought I get TDs definition of Household assets:

    Household asset accounts are defined as those TD Waterhouse Discount Brokerage accounts for clients living in the same household, with the same address. You must advise TD Waterhouse Discount Brokerage of these multiple account relationships.

  12. This is indeed fantistic news. Does TD have good currency converstion rate like Interactive Brokers does?

  13. Pingback: TD Waterhouse Lowers Commissions, E*Trade Still Not Offering Wash Trades at Investing Intelligently

  14. This is very, very good news. I had been considering moving our portfolio over to E*Trade. There were only a couple of things that were making me take my time on this. The first was that it appeared as though E*Trade charged a per-month per-stock fee to re-invest dividends and the other thing was the wash trades. Now it seems as though I don’t have to worry about that anymore. Now making transaction costs less than 1% of a trade (which is my goal) is going to be much easier.

  15. My hats off to TD – they saw the writing on the wall and acted. I’ve been considering moving to E*Trade as well, simply because of the high commissions. This announcement has certainly canceled those plans.

  16. E*Trade also offers $10 trades, for accounts that hold more than $50k.

  17. Guys…..Questrade offers $4.95/trade, DIRECT ACCESS, for any account. Please, do not make a decision based on empty marketing campaigns. If any broker comes up with $0 trades on a non direct access platform, get away from that deal.

    Please learn the importance of direct access trading. It is more important than commissions and any other perk.

    Best,

    Emil Vojkollari
    Client Acquisitions Supervisor
    Web: http://www.questrade.com
    Phone: (416) 227-9876 ext.380
    Toll Free: 1-888-783-7866 ext.380
    Fax: (416) 227-0078
    _____________________________________________________________________________
    Questrade Inc. | 5650 Yonge Street, Suite 1700, Toronto, ON M2M 4G3

    Trade Stocks for $4.95

  18. I complained bitterly in writing and verbally to TD Waterhouse about the fact you needed $500K to get $9.99 rates. I said are you 10X better than Etrade? They finally got the message. Now I can have lower commissions after being taken to the cleaners for years. This is great for people who have lots of assets but don’t necessarily trade a lot. I emailed TDW and said thanks and I encourage others to do so as well. I will also be telling all my friends to switch to TDW.

  19. Canadian Capitalist

    Emil: It is not fair to characterize TDW’s move as an empty marketing campaign. As a long-term investor, Questrade’s main attraction is low commissions; not direct access. I usually put in a market order for very liquid stocks – a penny or two difference in price or a second or two delay in execution is hardly of importance for the type of investing I and I suspect most readers of this blog do.

    However, I feel that as a smaller broker Questrade is more willing to listen to their customers compared to the big players in this space.

  20. Questrade, if you offered to hold USD in an RRSP might switch to Questrade.

    0xcc, you can re-invest dividends at E*Trade? More importantly though, why do you need to?

  21. Dave, I am pretty sure you can re-invest dividends at E*Trade (I haven’t checked in the last 5 or 6 months though.

    Why do I need to re-invest dividends? There are actually two ways to re-invest dividends (ok, maybe 3 ways). First is to enroll in the Dividend Re-Investment Plan (or DRIP) that the company you are invested in has set up. There are advantages to this, mostly that you are able to buy partial shares. So say you own one $10 stock that pays $0.25 in dividends 4x a year, you would actually get 0.025% of a stock each quarter. The problem with doing this is that you have to have at least one stock registered in your name in order to enroll in the DRIP. So you usually have to get your broker to mail you a stock certificate. Brokers charge in the $30-$50 range for this service I think. The second way to re-invest dividends is to do it through your broker. The downside to this is that you only get whole shares so in the example above ($10 stock, $0.25 dividend) you would never get any shares from the drip because you never get $10 worth of dividends. The third way is to just take the cash and put in a market order and buy the stock. The problem with this method is that you are charged commissions (the other two ways don’t cost you any commissions).

    So why do I need to re-invest dividends? For certain stocks that I know I want to buy more of eventually I want to use the dividends from that stock to buy more because it is the most efficient way of putting those dividends back to work for me (don’t pay any commissions to buy more stock). I only re-invest the dividends on specific stocks and there are a number of stocks that I own (mostly energy stocks) that I don’t re-invest the dividends in.

  22. Pingback: Best of August 2007 and More! | Million Dollar Journey

  23. Pingback: Four Pillars › Why I’m sticking with Questrade

  24. I recently moved to questrade and agree with Dave that there should be the ability to hold RRSP funds in a US dollar account. The costs of changing between US equities can really add up with frequent activities.

    Am I right in saying a 2 point spread is like a 2% decrease in value?

  25. Canadian Capitalist

    Earl: Yeah, a 1-point spread on either conversions is a 2% decrease in value. That’s exactly why I chose TD Waterhouse for my RRSP accounts even when their commission was $29.

  26. Emil – Could you please define Direct Access Trading?

  27. Dear Trizi,

    Please see links below for more information on direct access trading.

    http://www.questrade.com/services/direct_access.aspx

    http://www.investopedia.com/articles/trading/03/020503.asp

    Best,

    Emil Vojkollari
    Client Acquisitions Supervisor
    Web: http://www.questrade.com
    Phone: (416) 227-9876 ext.380
    Toll Free: 1-888-783-7866 ext.380
    Fax: (416) 227-0078
    _____________________________________________________________________________
    Questrade Inc. | 5650 Yonge Street, Suite 1700, Toronto, ON M2M 4G3

    Trade Stocks for $4.95

  28. Pingback: RBC Direct Investing and BMO InvestorLine Lower Commissions

  29. Great news from TD Waterhouse! TDW all the way, if you want any referral, please send your contact # and email address with your full name to my email address.

  30. This is great news! I’m already setting up my TDW account, but have not moved my RRSP mutual funds over. Can someone explain the ‘wash trade’? Why would you need a USD account if their is a stable USD money market account to move it to? What happens when a ‘wash trade’ (sell/buy) does equal because of the units offered?

  31. Pingback: TD Waterhouse and US Dollar Dividends in RRSP Accounts | Canadian Capitalist