Investing Online in Canada: The Best Brokerage Platforms

What Is an Online Investment Platform?

When it comes to investing online, there are several options and strategies to choose from. For the purposes of this article, we’ll concentrate on investing in the stock market. More specifically, investing in the stock market via an online brokerage platform or a robo-advisor.

An online brokerage platform, also known as an online broker or discount broker, acts as an intermediary between you and the stock markets. To buy or sell shares in listed companies such as Apple or Microsoft, you need an account on a brokerage platform. This is self-directed investing. You will be able to enter your trades (e.g. purchase Apple shares) and receive the shares when your trades are executed by the broker. You can then hold on to your shares and resell them at a profit, depending on your investment strategy.

Another option, for those who prefer to wait before starting with self-directed investing, is to invest online using a robo-advisor. Robo-advisors streamline investment processes by doing everything for you. Based on your investor profile and investment timeline, a robo-advisor can recommend investment portfolios that match your needs, automatically rebalance your portfolio, and reinvest dividends for you.

Investing Online – What Type of Investment Account Should I Choose?

As a Canadian, you can invest in registered or non-registered accounts.

• Registered account: A registered account, also known as a registered plan, is an investment account that receives special tax treatment from the government (tax deferral or tax exemption). Tax is not payable on income prior to withdrawal.
• Non-registered account : A non-registered account is a general investment account that requires you to pay taxes each year on the income earned in the account. You’ll be able to invest in a wide range of assets.

The main types of registered savings plans are: FHSA, TFSA, RRSP, and RESP. However, there are many others.

Why Invest Online?

Investing your money with a financial advisor at the bank is a good option for those who are new to investing. However, investment choices are generally limited to that bank’s mutual funds and fixed income investments. In addition, these investment products have fairly high management fees in Canada, typically ranging from 2% to 3% on average. Not to mention that most mutual funds under-perform their benchmarks.

On the other hand, investing online using a brokerage platform opens up a wide range of options and investment strategies. If you are a beginner investor, don’t worry, it’s very easy to invest online. Of course, self-directed investing requires more time and knowledge than investing with a financial advisor. However, with basic knowledge of the stock market, an online brokerage mobile app, and an all-in-one ETF that matches your investor profile, you can achieve higher returns than your bank’s mutual funds. In the long term, the difference with the principle of compound interest is enormous.

How Do I Choose an Online Brokerage Platform?

There are several online brokerage platforms available in Canada, and each one has its own features and functionalities. Depending on your current financial situation and investment strategy, you can choose the one that best suits your needs.

Features and Functions of Online Brokerage Platforms

Here are the main features to consider:

• Minimum deposit: The minimum amount required to start investing online.
• Administration fees: Fees charged to you for using the platform. These are usually quarterly fees.
• Trading fees: Fees or commissions charged for executing your buy or sell transactions. Several platforms now offer free trading.
• Types of investments: Types of investments or assets offered on the platform, such as equities and exchange-traded funds (ETFs).
• Account types: Types of accounts offered on the platform, such as registered accounts (FHSA, TFSA, RRSP, RESP, etc.) and non-registered accounts.
• Mobile accessibility: Some brokers in Canada still do not offer a mobile app to their users.
• Research and analysis tools: Technical analysis tools, research tools and market data reports available on the platform.
• Training and educational resources: Typically courses, webinars or guides to help novice investors invest online.
• Safety: Safety is paramount. Check that the platform is regulated by the Investment Industry Regulatory Organization of Canada (IIROC) and protected by the Canadian Investor Protection Fund (CIPF).
• Trial accounts: Some platforms offer risk-free trial accounts.

Ease of Use and User Experience

User experience is an important element to consider when choosing an online brokerage platform. Ease of use is a top priority for both beginner and experienced investors. Here are some aspects to evaluate:

• Intuitive interface: Easy to navigate and understand the functions offered.
• Performance: Reliability of the website or mobile app, including the speed of executing market buy or sell orders.
• Mobile application: Availability of a mobile application for investing from anywhere.
• Customer service: Accessibility and efficiency of customer service in the event of problems (via online chat, e-mail or telephone).
• Personalization: Ability to customize interfaces, stock price alerts, or automatic purchases.

If need be, don’t hesitate to consult the rating and review sites for these brokerage platforms.

All-In-One Service

It can be convenient to consolidate all your investments and banking in one place. For example, Wealthsimple offers a high-interest checking account, a Wealthsimple Visa Infinite credit card, managed investments, Wealthsimple Trade (formerly self-directed investments), a cryptocurrency trading platform, and an online tax filing service (Wealthsimple Tax). All their products and services are available on the same platform, making it easy to manage your finances.

Which Is the Best Online Investment Platform?

Whether you’re a novice or an experienced investor, the best online investment platform is the one that suits your needs. Based on the features and functions explained in the previous section, you can find and choose the best brokerage platform for you.

Here is a list of the main online brokerage platforms available in Canada. For each of them, we mention the pricing (administration fees, trading fees, etc.), the types of accounts offered, the types of investments, and more.

Wealthsimple

Wealthsimple is an investment management company that was founded in 2014 in Canada. Today, Wealthsimple has over 3 million clients and holds over $100 billion in assets under management. It offers a diversified range of investment products and services, including:

• A self-directed investment platform: Wealthsimple Trade
• A managed investment platform: Wealthsimple Managed Investing
• A cryptocurrency platform: Wealthsimple Crypto

Wealthsimple offers several types of accounts, including the FHSA, TFSA, RRSP, and RESP. RESP accounts allow you to receive the main government grants, including the CESG as well as the QESI in Quebec for eligible clients.

Finally, Wealthsimple is ideal for beginner investors, but it will also appeal to experienced investors. Fun fact: Wealthsimple was the first online brokerage platform in Canada to offer commission-free trading, with no administrative fees or minimum balance required.

To find out more, read our review of Wealthsimple:

Questrade

Questrade is an investment dealer that opened its doors in 1999. Since then, Questrade has become the largest independent brokerage in Canada. The company manages $30 billion in assets and has been named one of Canada’s Best Managed Companies 12 times.

Whether you’re a novice or an advanced investor, Questrade has the trading platforms and analysis tools to meet your needs. Interesting fact: In 2023, Questrade became the first online broker in Canada to offer the FHSA (First Home Savings Account) to its clients.

To find out more, read our review of Questrade:

National Bank Direct Brokerage

National Bank Direct Brokerage (NBDB) is the online broker for National Bank of Canada clients.

*No annual fee if: you are a young investor aged 30 or under, or you maintain assets of $20,000 or more, if you take advantage of a financial program (engineers, teachers, healthcare professionals, business professionals) or if you only have an InvestCube account.

BMO InvestorLine

BMO InvestorLine Self-Directed is the online trading platform for Bank of Montreal (BMO) clients.

*No annual fee if: your account balance exceeds $15,000 (non-registered account) or your account balance exceeds $25,000 (registered account). **No trading fees (equities and ETFs) if: you trade among more than 95 ETFs with no commission fees (conditions apply).

Desjardins Online Brokerage (Disnat)

Desjardins Online Brokerage (Disnat) is the discount broker of Desjardins Securities (Desjardins).

*No annual fees if: you make 6 or more trades in the past 12 months, your portfolio value is $15,000 or more, you hold a registered plan (except TFSA and FHSA), or you are an investor between 18 and 30 years old. **No annual fee if: market value of your account is $15,000 or more, 125 transactions per year. ***No annual fee if: assets held in all subscriber accounts are $15,000 or more.

CIBC Investor's Edge

CIBC Investor’s Edge is the online broker for CIBC clients. It offers a variety of tools and resources to help you build and manage your investment portfolio. If you’re under 25, you can even negotiate for free under certain conditions.

*No annual fee if: your account balance exceeds $10,000 (non-registered accounts) or your account balance exceeds $25,000 (RRSPs, RRIFs, LIRAs and LIFs). **No trading fees (equities and ETFs) for young investors (for more information on pricing for different types of investors: CIBC Investor’s Edge).

For more information, read our CIBC Investor’s Edge review:

Qtrade Direct Investing

Qtrade Direct Investing is an independent online brokerage platform in Canada that was founded in 2021. It allows you to invest in several types of investments, such as equities and ETFs, in several types of accounts. Qtrade is a platform with administration and trading fees, but it allows you to avoid fees if your account meets one of their conditions.

To find out more, read our review of Qtrade Investissement Direct:

RBC Direct Investing

RBC Direct Investing is the discount broker for Royal Bank of Canada (RBC) clients.

*No annual fee if: combined assets in all accounts exceed $15,000.

Scotia iTRADE

Scotia iTRADE is the online broker for customers of the Bank of Nova Scotia (Scotiabank).

*No annual fee if: total account assets (registered and non-registered) are $25,000 or more or if you make more than 12 commission transactions per year. **Trading fee of $4.99 per transaction (shares and ETFs) if: you make 150 or more transactions per quarter.

To learn more, read our review of Scotia iTRADE:

TD Direct Investing

TD Direct Investing is the online broker for clients of the Toronto-Dominion Bank (TD Bank).

*No annual fee if: your TD Direct Investing account balance exceeds $15,000. **Trading fee of $7.00 per transaction (shares and ETFs) for active investors.

How Do I Start Investing Online?

Now that you’ve studied your options and decided which brokerage platform to use, it’s time to start investing online.

Here are the steps to follow:

• Open an online brokerage account – see the list of platforms in the previous section.
• Choose account types (FHSA, TFSA, RRSP, non-registered account, etc.)
• Choose the type of investments (stocks, ETFs, bonds, etc.)
• Fund your investment account (bank transfers, Interac transfers, programmed deposits, etc.) – check the minimum balance for your chosen platform
• Trade to invest online

Bottom Line – Online Investing

There’s no better time than today to start your journey into the world of stock market investing. Of course, investing online can seem complicated. But brokerage platforms are now designed for the general public. What’s more, all-in-one ETFs make it possible to invest passively in the stock market at low cost.

As we’ve seen in this guide, there are several online brokerage platforms available in Canada. Each has its own characteristics, so choose one to suit your needs. In particular, check fixed and negotiation costs.

Frequently Asked Questions