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Questrade vs. TD Direct Investing 2021: A Tale of Two Canadian Online Brokers

Last updated May 4, 2021

TD and Questrade are two of the biggest names in Canadian finance, and both offer a do-it-yourself (DIY) trading platform for its customers.

But, not all trading platforms are the same. Each platform offers intricacies that differentiate them from each other. Hence, a platform that meets your investment objectives might not be suitable for someone else.

Questrade is my top pick for the best discount broker in Canada. However, Toronto-Dominion Bank (TD) also has a robust discount broker called TD Direct Investing that you can consider.

This Questrade vs. TD Direct Investing comparison article will discuss the two discount brokers to help you make a better decision about which firm you should work with to achieve your financial goals.

Questrade vs. TD Direct Investing – A Quick Look at the Discount Brokers

This section of my Questrade vs. TD Direct Investing comparison will give you a quick overview of both Canadian discount brokers and introduce you to these giants in Canada’s discount broker market.

About Questrade

Questrade is a self-directed trading platform that lets you create your own portfolio at a lower cost than traditional financial institutions. The discount broker boasts over $25 billion in Assets Under Management (AUM).

Questrade has earned a reputation for being the fastest growing online brokerage firm in Canada, with over 200,000 new accounts opened each year, thanks to its low-fee structure for trading stocks and ETFs.

Founded in 1999, Questrade is a discount broker that has been around for a while. It is known mainly for its online trading platforms that let Canadians buy and sell ETFs, stocks, and other securities to build their own portfolios. The platform has won an award for being one of Canada’s “Best Managed Companies” nine times over the years.

Pros

  • Offers free ETF purchases
  • Requires only $1,000 to begin investing
  • Offers a very affordable fee structure for trading stocks, options, and more
  • Provides investors with comprehensive research tools powered by Morningstar

Cons

  • ECN and FX fees may apply to certain trades
  • Does not boast the best customer service

About TD Direct Investing

TD Direct Investing Logo

TD Direct Investing may seem like a new online brokerage that came along with the advent of other popular online brokers in Canada. However, it has been around since 1984, starting as TD Green Line Investor Services and later as TD Waterhouse. It is one of the most significant discount brokers in the country, backed by the Toronto-Dominion Bank.

TD Bank is among the largest Canadian financial institutions in terms of assets managed. As of January 31, 2021, it had $1.7 trillion in assets, making it a leading financial services firm worldwide.

TD Direct Investing is a discount brokerage offered by the TD Bank, and it was also the first online broker that launched in 1996 as WebBroker. TD Direct Investing is its latest iteration, launched in 2011.

Pros

  • Is a regulated online brokerage
  • Offers flexible platforms
  • Offers a Markets and Research Centre
  • Receives the backing of an established financial institution

Cons

  • Has higher fees compared to competitors
  • Has no free ETFs available

Questrade vs. TD Direct Investing – Investing Accounts Available

Questrade and TD Direct Investing allow their clients to open several types of accounts with their platforms based on their clients’ needs and investment objectives.

Accounts Offered by Questrade

  • Tax-Free Savings Account (TFSA)
  • Retirement Savings Plan (RRSP)
  • Margin Account
  • Registered Education Savings Plan (RESP)
  • Spousal RRSP
  • Locked-In Retirement Account
  • Locked-In RRSP
  • Registered Retirement Income Fund (RRIF)
  • Family RESP
  • Business Account
  • Cash Account

Accounts Offered by TD Direct Investing

  • Tax-Free Savings Account (TFSA)
  • Registered Disability Savings Plan (RDSP)
  • Margin Account
  • Registered Education Savings Plan (RESP)
  • Spousal RRSP
  • Locked-In Retirement Account (LIRA)
  • Self-Directed Retirement Income Fund (RIF)
  • Life Income Funds (LIF)
  • Cash Account

Both online brokerage firms offer their clients a broad range of account types that they can open using each broker. You can use the different account types to cater to various short-term and long-term trading and financial goals.

With a few minor differences in their offerings, both discount brokers stand equal in terms of accounts available for clients.

Questrade vs. TD Direct Investing – Research Tools

Person using an iPad or tablet

This section of my Questrade vs. TD Direct Investing comparison will discuss the research tools available with both discount brokers and the experience they offer for investors.

Research Tools Offered by Questrade

There are three research tools available for you if you use Questrade:

  • Questrade Market Intelligence
  • Questrade Intraday Trader
  • Questrade IPO Centre

Powered by Morningstar, Market Intelligence is a research tool available to you at no additional cost while using Questrade. The third-party researcher is the primary market research tool for Questrade users. It offers analysis for stocks and ETFs along with mutual funds. Market Intelligence also offers quick and accurate stock information and in-depth market analysis.

On the other hand, Intraday Trader was designed with technical traders in mind. You can use this tool to monitor your target markets and set up chart patterns to visualize data in the way you prefer.

With Intraday Trader, you can set up a target trade. When it is triggered, the tool will notify you with charts and describe what happened.

Investing in Initial Public Offerings (IPOs), meanwhile, is an exciting aspect of investing that allows traders to buy shares of companies that are going public.

The IPO Centre offers the chance to tap into the exciting world of IPOs. It serves as a resource that is rich with information about new IPOs and comprehensive analyses to help you make well-informed purchase decisions about new and upcoming IPOs.

Research Tools Offered by TD Direct Investing

TD Direct Investing offers a wide range of valuable educational resources to make more well-informed trading decisions and achieve your self-directed investing goals. WebBroker is among the most useful platforms that it offers for educating new investors.

WebBroker includes multiple educational tools, including:

  • How-to training videos and tools for new investors
  • A straightforward explanation for complex trading subjects
  • Daily live and interactive online masterclasses
  • Various webinars
  • Platform tours

The Markets and Research Centre is available through TD Direct Investing and is also rich with market insights and research tools. You can use it to understand the market as an active and long-term investor, perform market analyses to find better investment opportunities, and much more.

The Markets and Research Centre offers multiple tools, including:

  • Screeners that let you scan and filter instruments based on your criteria;
  • Real-time news streams and commentaries on the market;
  • Research reports from analysts working at TD Securities, TD Economics, and third-party researchers like Thomson Reuters and Morningstar;
  • Interactive charting that lets you conduct in-depth technical analyses;
  • Watchlists and various alerts; and
  • MoneyTalk videos that offer actionable advice.

Questrade and TD Direct Investing both enable better self-directed investing through their research and educational tools. However, TD Direct Investing is the winner when it comes to the tools it offers.

TD Direct Investing offers users the advantage of having established expert analysts in-house. Additionally, it provides newer investors with comprehensive educational resources to help them understand investing from the ground up.

Questrade’s research tools are also excellent, though, if you know your way around the platform. TD Direct Investing caters to every type of investor, from beginners to seasoned veterans.

Questrade vs. TD Direct Investing – Customer Service

There has been a significant increase in Canadians who are interested in investing through discount brokers. Self-directed investing is still a fairly new deal to most new investors, and each platform has its intricacies and challenges. Hence, online brokers need to offer comprehensive customer support to ensure a better user experience for their clients.

Questrade has a long-standing reputation for providing top-notch customer service. Its focus on high-quality customer service is one of the primary reasons it is my top pick among Canadian discount brokers.

My experience in using Questrade has been fantastic over the years. Customer service representatives are available through online chat, email, and phone. The staff is helpful, knowledgeable, and courteous. In fact, Questrade won the 2019 DALBAR Seal for Service Excellence due to its customer service quality.

However, it has recently received a lot of negative feedback during the massive influx of new investors. It could be due to an overwhelming demand for customer service and not having enough staff to cater to everyone.

TD Direct Investing also has a reputable customer service team of investment representatives who are available around the clock. It has a well-versed and multilingual team that can offer expert advice and answer your questions. 

Unfortunately, TD Direct Investing currently has no live chat support feature, putting it at a disadvantage against Questrade.

Questrade vs. TD Direct Investing – What Do They Cost?

As with any other financial service, the cost is a major differentiating factor that you should consider when deciding which broker to work with to achieve your financial goals. Questrade and TD Direct Investing are both lower-cost alternatives to traditional managed financial services offered by financial institutions and robo-advisors.

However, both discount brokers have different costs associated with using their services.

Questrade Fees

Questrade’s bare-bones fee structure is another significant reason why it wins in my book. It offers a much lower fee structure than most of its peers in Canada.

Questrade has zero account fees and minimums. However, Questrade charges an inactivity fee of $24.95 per quarter.

Not to worry, though. You can easily waive the inactivity fee if you have $5,000 invested through the broker or make at least one trade per quarter. Waiving its inactivity fee is easy since you can simply purchase one ETF for free through the platform and fulfill the criteria.

Questrade also charges a foreign exchange conversion fee for converting your Canadian dollars into the corresponding currency when you are trading foreign securities.

Besides the account fees, here is a look at the trading fees you can expect to pay with the platform:

  • Stocks: $.0.01 per share, with a minimum of $4.95 to a maximum of $9.95 per trade
  • ETFs: Free to buy, but you have to pay $0.01 per share per sale, costing a minimum of $4.95 to a maximum of $9.95 per trade
  • Options: $9.95 and $1 per contract
  • Mutual Funds: $9.95 per trade
  • Bonds: Free with at least $5,000 purchase
  • GICs: Free with a minimum of $5,000 purchase
  • International Equities: 1% of the trade value, with a minimum of $195.00 and applicable exchange or stamp fees, charged in the currency of the account in which the trade is placed
  • IPOs and New Issues: Free but requires a minimum $5,000 purchase
  • Product Precious Metals: US$19.95 per trade

Questrade offers very competitive pricing and beats out all its competition with its bare-bones fee structure. It also offers several discounts and promos that you can capitalize on to reduce your costs further.

If you are a new investor, signing up to the discount broker through this promo offer code of $50 in free trades could be an excellent way to begin your journey as a self-directed investor.

TD Direct Investing Fees

TD Direct Investing offers lower fees than traditional trading methods, but it is not known for being the lowest-cost alternative for investors. From commissions to maintenance fees, you can expect to pay several expenses while using the platform.

TD Direct Investing charges a standard rate and offers Active Trader discounts for investors using the discount brokers to make more than 150 trades per quarter.

  • Stocks: $9.99 per share for Canadian and U.S. equity securities and $7.00 for active traders
  • ETFs: $9.99 flat rate for buying or selling Canadian and U.S. equity securities and $7.00 flat rate for active traders on Canadian & U.S. stocks 
  • Options: $9.99 flat rate and $1.25 per contract for Canadian and U.S. options and $7.00 and $1.25 per contract for active traders
  • Mutual Funds: No commissions to buy, sell, or switch, but a short-term redemption fee may apply
  • Bonds: Charges commissions included in the quoted price for bonds
  • GICs: Charges commissions included in the quoted price for GICs
  • IPOs and New Issues: No commissions apply to New Issue expressions of interest

TD Direct Investing also charges a quarterly fee of $25 for clients who have an overall balance lower than $15,000. The discount broker waives the fee if you meet any of the following conditions:

  • You place three or more commissionable trades every quarter.
  • You maintain an RDSP.
  • Your total assets amount to more than $15,000.
  • You registered at least one of your household accounts in a pre-authorized deposit, Systematic Investment Plan, or a pre-authorized contribution with a monthly minimum of $100.
  • You are in the first six months of the first account that was opened in your household.

Additionally, mailing any paper statements has a $2 charge per statement and another $2 for trading confirmation mails.

Questrade vs. TD Direct Investing – The Verdict

Between Questrade and TD Direct Investing, I will always prefer Questrade.

However, while Questrade wins out in fees and customer support, TD Direct Investing has a more robust educational and research experience for self-directed investors.

I will briefly discuss for whom both discount brokers would be ideal.

Use Questrade if:

  • You are an index investor interested in purchasing a lot of ETFs. It offers a broader number of ETFs that you can purchase for free.
  • You want to cut your investing costs.
  • You do not need a lot of assistance in maintaining your portfolio.

You can check out my detailed Questrade review to learn more about the discount broker.

Use TD Direct Investing if:

  • You are a beginner seeking comprehensive educational tools regarding investing and trading.
  • You are an active trader who wants to work with a well-established financial institution.
  • You prefer trading a series of mutual funds that are not available through most others.

You can check out my detailed TD Direct Investing review to learn more about the discount broker.

Our Verdict

I have also made a list of the best trading platforms in Canada that you can check to see what other options are available.

TD Direct Investing has the backing of a well-established financial institution that has been around for over a century. It has been among the first traditional banks in Canada to pursue innovative financial solutions powered by advanced financial technology.

But while Questrade is relatively much newer than TD Direct Investing, it offers a much lower cost for its services and enables self-directed investing. It also offers a robo-advisor platform that lets you invest in pre-made investor portfolios that align with different investing goals and risk tolerances.

Open up an account and get $50 free trades with Questrade.

If you are interested in using the platform so that you do not have to manage your portfolio yourself, you can use this offer code to enjoy up to $10,000 in your Questwealth account managed for free for a year.

A Tale of Two Canadian Online Brokers
Christopher Liew, CFA

Christopher Liew, CFA

Author Bio - Christopher Liew is a CFA Charterholder with 11 years of finance experience and the creator of Wealthawesome.com. Read about how he quit his 6-figure salary career to travel the world here.

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