Investment for Canadian Employees PART 7 – Stock brokers

hello. This is Miki’s Honey, MikiHoney!

To buy stocks or other financial products, you must open an investment account with a stock broker.

Here I will compare the three Stockbrokers I have used.

TD Direct Investing

As an investment company of TD, a major bank, the advantage is that, like a large bank, it handles almost all products. TD has many good products including stocks, options, bonds, funds, GIC, etc.

As it is a long-standing company, we can do everything regarding investment.

However, the downside is that the fees are expensive. All deals are $9.99. You pay $9.99 when you buy or sell. When you buy US stocks from a USD account, you pay 9.99 US$. If you buy and sell just 5 times, you will pay $100 in commission. US stocks are almost $140 in CAD.

The second drawback is that the app is too complicated. It is 10 times more complicated than the new online Stockbroker. Of course, it is clear that there are many functions, but these are functions that are rarely used by the average investor.

I just want to buy and sell stocks… .

The fees and complexity of the app aren’t a big issue for me, but this last drawback made me move when another company had a promotion.

It has blocked you from buying the CASH.TO or HSAV.TO ETF. Of course, TD offers similar products. GICs are sold and there are other high-interest products such as TDB8155, but if you hold various products in different accounts, it is difficult to organize them at a glance, but since all products are in the same account as ETFs or stocks, management is easier.

So I moved all my accounts from TD Direct Investing to Wealthsimple.

Questrade

Questrade is the second online-only company I used.

The advantage is that stock trading costs are lower compared to TD ($4.95 – $9.95), and ETF trading fees are free. I thought there were advantages to buying US stocks or ETFs with a USD account. Norbert’s Gambit is available so you can save on currency exchange fees.

If you don’t know Norbert’s Gambit, please refer to the article below. This is a way to save on currency exchange fees.

Investment for Canadian Employees PART 5 – How to invest in stocks

Some online securities companies do not support Norbert’s Gambit, but Questrade is a major online securities company, so it naturally supports it.

Compared to TD, the app and online screens are also designed to be easier for beginners to understand. Online securities companies seem to have a more user-friendly screen than major banks.

Wealthsimple

The last place I settled on was Wealthsimple. As an online securities company, there are no trading fees at all. The commission for both buying and selling is $0.

Advantages

1. Fee is $0

I don’t trade often, so the fees aren’t that important to me, but since the fees are free, I keep my cash in a HISA (High Interest Saving Account) ETF even for a short period of time. At other securities companies, you have to pay commissions, so when buying or selling stocks, you just hold them in cash for a short period of time, but at Wealthsimple, you always put cash into HISA.

2. Intuitive mobile app UI

Compared to other securities companies, the mobile app is well-made so that even beginners can use it easily. Complex functions are well hidden and only the main functions are displayed at the front so that you can easily buy and sell stocks, so there was no difficulty in buying or selling even when using it for the first time.

3. Cash Account that gives 4%-4.5% interest

Chequing accounts at major banks require monthly payments, not to mention interest. Of course, if you deposit more than a certain amount, it is provided for free, but no interest is paid at all. I used TD as a checking account, and it usually contains about $10,000 per year for living expenses, etc. If you put it in a Cash Account on Wealthsimple, you can receive interest of $400 per year.

Since you can use this Cash Account for e-transfer and bill payment, there is no inconvenience in using it as your main account. One downside is that there are no branches, so if you want to withdraw cash, you have to use a regular ATM to do so, which incurs a fee of about $3. So, I maintain a regular bank account for cash withdrawal. So, if I need cash, I do an E-Transfer on Wealthsimple and get the cash. But lately, I rarely have to find cash.

Disadvantage

Wealthsimple also has some drawbacks.

1. 15 Minute Delay Quote

The price information shown is delayed by 15 minutes. Unless you are a day trader, the 15-minute delayed price information is not very inconvenient.

2. Cash withdrawal fee

As mentioned above, since there is no dedicated ATM, you have to pay a fee if you use a third-party ATM to withdraw cash. This can be done by e-transferring the money to another regular bank and then withdrawing it. It’s a little inconvenient, but these days I rarely have to withdraw cash, so I don’t feel any inconvenience.

I haven’t been using Wealthsimple for a long time, so I haven’t found any other shortcomings. The more you use it, the more inconvenient it will become. It is clear that customer service is weaker than that of major companies.

For your information, when I called TD Customer Center, an agent immediately answered the call and processed my request right away. After all, it is a large company. Compared to my recent experience calling cell phone companies, I was very satisfied with TD customer service.

If you use the referral code below when opening a Wealthsimple account, you will receive $25. If you would like to open a new account, please use this referral code.

https://app.wealthsimple.com/74rd/3i2t30pp

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