If you’re looking for way to invest but you want a big brand name backing it, then TD Direct Investing might be the right trading platform for you.
It will be a bit more expensive than other options on my best trading platforms in Canada list.
But some people won’t mind and need the security of a huge multi-billion dollar corporation before they hand over their money to them.
In this TD Direct Investing review, I will tell you all about this online discount brokerage offered by TD Bank.
Online Broker/Trading Platform
TD is a solid big bank pick for a trading platform, yet it still falls short of the best that Canada has to offer.
- Offered by a big bank with a nationally recognized brand
- Has flexible platforms
- Offers Markets and Research Center
- Has a Learning Center
- Excellent choice if you already bank with TD
- High fees compared to competitors
- Limited funding options
- No free ETF trades
- Only high-cost Series A mutual funds are available
- Restricted leverage
Things to consider before choosing a discount broker
Discount brokers, also known as trading platforms, are usually the cheapest way for Canadians. Here are some important things you should consider when choosing a discount broker:
- Fees: The name of the service is discount broker, so having low fees should be one of the most important factor in choosing one.
- Platform: No matter how cheap a discount broker is, you must make sure that the trading platform is easy to use and that the reporting features are easy to understand.
- Features: You must see if the discount brokers’ features satisfy your investment needs. For example, if you plan to make lots of trades, you might need different analytics and research tools than a buy-and-hold investor.
- Customer service: Try to gauge how much support you can receive if you need it by contacting them before you buy or reading reviews like this one.
Let’s go over these points in detail and more below.
What is TD Direct Investing?
TD Direct Investing is seemingly a newer online brokerage. However, it is one of the first online trading platforms in the country that helped people make various trades.
Founded in 1984, it began as TD Waterhouse Discount Brokerage. It is one of the largest discount brokers in the country with the backing of the Toronto-Dominion Bank.
TD Bank is the largest Canadian bank in terms of the assets it manages. As of April 30, 2020, Toronto-Dominion had $1.7 trillion in assets under management, making it one of the world’s leading financial services firms.
TD Direct Investing allows you to work with a discount brokerage offered by one of the most reputable banks in the country.
TD was also the first online broker in Canada when it introduced WebBroker in 1996. TD Direct Investing is its latest offering that started in 2011, allowing its clients to trade on various platforms, from desktop computers to smartphones.
Features and Benefits
I will cover the online brokerage’s essential features in this section of my TD Direct Investing review. I will highlight basic information you should know about the platform, how much you can expect to pay in commissions and fees while using it, and other aspects that give you a better idea about how TD Direct Investing is different from its peers.
Accounts Offered by TD Direct Investing
TD Direct Investing offers you a broad range of account types you can open with the broker. You can use various account types to cater to different short- and long-term trading goals. The account types include most of the accounts you can expect to open with online brokers and traditional banks, including:
- Cash accounts
- Margin accounts
- Tax-Free Savings Account (TFSA)
- Registered Retirement Savings Plan (RRSP)
- Registered Education Savings Plan (RESP)
- Locked-In Retirement Accounts (LIRA)
- Registered Retirement Income Fund (RRIF)
- Life Income Funds (LIF)
- Registered Disability Savings Plan (RDSP)
TD Direct Investing Pricing and Fees
TD Direct Investing allows you to trade various types of assets with your capital through the platform. You can expect to pay different kinds of fees when using the platform, from trading commissions to maintenance fees.
TD Direct Investing Exchange-Traded Funds and Mutual Fund Commissions
TD Direct Investing does not offer any discounted rates or special prices for buying Exchange-Traded Funds (ETFs) through the platform. It standardized its ETF commissions to a flat rate of $9.99 per trade.
No bank-based online brokers offer free ETF purchases except for Scotiabank’s iTrade. TD Direct Investing’s commission applies to each trade, no matter what the size is.
Example: If Person A purchases $100 worth of ETFs in one trade through the platform and Person B purchases $100,000 of ETFs in a single trade through the platform, both of the clients will have to pay $9.99 for their respective trades.
Person A would have to pay a massive 9.99% of the total amount in fees, while Person B will have to pay a meager 0.000099%.
The flat rate makes it more attractive to purchase ETFs through the platform for larger trades. While the flat rates put TD Direct Investing in line with most bank-based brokerages, it is still quite expensive compared to most non-bank-based platforms.
TD Direct Investing does not charge you any commissions to help you buy, sell, or switch mutual funds through the platform. The no-cost mutual fund trading comes at the cost of limited options compared to other platforms.
TD Direct Investing allows you to only trade with A series mutual funds, which come with a management fee of 2.25% in addition to the cost of the funds. That is twice as expensive as F series funds with a management fee of 1.11% available through other platforms.
In short, I do not recommend buying mutual funds at all through the TD Direct Investing platform.
TD Direct Investing Stock Commissions
The commission to trade equities like stocks is also a flat $9.99 per trade for most investors. If you trade actively with more than 150 trades per quarter using the platform, TD lowers the commission to a flat rate of $7 per trade.
It may be more expensive than most non-bank brokerages, but it is a massive change from the $45 commission that TD Direct Investing used to charge most of its clients.
TD Direct Investing Options Commissions
Trading options through the platform also apply the standard $9.99 per trade for regular traders and $7 for active traders with over 150 trades per quarter. When you trade options, there is an additional cost of $1.25 per contract.
TD Direct Investing also charges a quarterly fee of $25 for clients with an overall balance with the firm of less than $15,000. The firm waives this quarterly fee if you place three or more commissionable trades per quarter or maintain a Registered Disability Savings Plan. Mailing any paper statements carries the charge of $2 per statement and $2 for trading confirmation mail.
Investment Options
TD Direct Investing has many investment options to choose from:
- Securities: You have the freedom to trade a broad range of securities, from stocks to bonds.
- Mutual Funds: TD Direct Investing offers trading in A series mutual funds. I would not recommend buying these, as the fees are very high.
- ETFs: Exchange-Traded Funds are gaining popularity for their flexibility. While TD Direct Investing doesn’t provide free ETF trades, the management fees will be much lower than mutual funds.
- Options: If you’re an advanced trader, options can be an exciting instrument to leverage.
TD Direct Investing Platform Ease of Use
TD Direct Investing is one of the first in the industry to offer online brokerage options to clients. TD Direct Investing provides you with a choice of various trading platforms for your needs. The WebBroker online trading platform is its most popular offering.
However, it also offers a simpler TD app that lets you use TD Direct Investing from your smartphone and other compatible devices. Besides its TD app and WebBroker, TD Direct Investing also offers Active Trader and ThinkOrSwim. Both of these are desktop-based trading platforms.
The different platforms allow TD Direct Investing customers to trade using various devices. You can take control of your individual investments and portfolio, manage your investments, research markets in substantial detail with the tools they provide, and trade across different markets.
The platforms are surprisingly elegant, simple, and intuitive. The menu has more straightforward options that make navigating the platform easier, whether you are using it through a desktop computer or a smartphone.
TD Direct Investing Education and Trading Tools
The brokerage offers a broad range of useful trading tools and educational resources at your disposal to make well-informed trading decisions. The platform does not give you advice, but it offers you all levels of online resources that can help you understand various aspects of what it takes for self-directed investing.
WebBroker is its most comprehensive platform in terms of giving you these resources, which include:
- Easy to understand how-to training videos and tools
- Simple explanations for a wide range of trading subjects
- Live interactive online master classes daily
- Webinars
- Platform tours
The Markets and Research Center is rich with market insights and research tools that you can use to understand the market as both an active and a long-term investor. You can perform market analysis and find better potential opportunities. The Markets and Research Center offers several tools, including:
- Screeners to scan and filter instruments according to your criteria
- Real-time commentary and news streams
- Research reports from expert analysts that work for TD Securities, TD Economics, and third-party resources like Morningstar and Thompson Reuters
- Interactive charting to help you conduct in-depth technical analysis
- Watchlists and alerts
- MoneyTalk videos that give you actionable ideas
TD Direct Investing certainly beats most of its closest competitors when it comes to its educational and market research tools.
TD Direct Investing Customer Service
TD Direct Investing has a team of investment representatives available to offer you help around the clock. They can answer your questions to help you with your investment needs over the phone.
There are no live chat features to cater to customer support. TD Direct Investing makes up for the lack of live chat support by ensuring the availability of experts through the phone to cater to your needs in multiple languages.
Is TD Direct Investing Safe and Legit?
TD Direct Investing is a direct subsidiary of the TD Bank Group, one of the world’s largest financial services companies. That is one of the biggest factors working in favour of the platform.
As a customer, you can rely on the provision of safety and security from TD Bank itself. The integrity of the online brokerage is never in question.
TD Direct Investing is a member of the London Stock Exchange and a member of the ICAP Securities and Derivatives Exchange that provides oversight of the firm to protect investors further. TD Direct Investing is a member of the Investment Industry Regulatory Organization of Canada (IIROC) that protects its clients’ investments.
Alternatives for TD Direct Investing
When I think of alternatives for the platform TD Direct Investing, Questrade and Wealthsimple Trade come to mind. Here’s how they compare to TD:
TD Direct Investing vs. RBC Direct Investing
RBC Direct Investing is the online brokerage product offered by the Royal Bank of Canada. Similar in many ways to TD Direct Investing, RBC Direct Investing has a very strong customer support experience. It has an industry-leading response time to answer client queries, and it offers online live chat functionality.
The platform also provides fantastic educational resources, but they are not as comprehensive as TD Direct Investing’s educational and research tools.
TD Direct Investing vs. Questrade
Questrade is the most popular online broker platform in Canada. It is one of the non-banking products that gives the likes of TD Direct Investing a run for its money due to the platform’s lower fee structure and overall functionality. In my opinion, Questrade is the best platform available.
While it may not offer the comprehensive educational and market research tools that TD Direct Investing has to offer, it offers substantially lower costs for you to use the platform. You can learn more about the platform in my Questrade Review.
For a more detailed head-to-head comparison, check out my TD Direct Investing vs Questrade article.
TD Direct Investing vs. Wealthsimple Trade
Wealthsimple Trade is another non-bank online brokerage in Canada that has become vastly popular among self-directed investors. It is one of the most inexpensive discount brokers you can use.
Wealthsimple Trade relies on foreign currency conversion fees to make revenue, and it does not charge you any commissions for trading stocks using the platform.
Since it relies on currency conversion fees, it does require you to trade US-listed securities with the platform. Using the platform, you will essentially be paying around 1.5% fees for every US stock and ETF you trade in your portfolio. You can learn more about the online broker in my Wealthsimple Trade Review.
For a more detailed head-to-head comparison, check out my Wealthsimple Trade vs TD Direct Investing review.
| Platform | Free ETF Purchases | Stock Trading Fees | Annual Fees |
| TD Direct Investing | No | $7 – $9.99 | $100 |
| RBC Direct Investing | No | $6.95 – $9.95 | $100 |
| Questrade | Yes | $4.95 – $9.95 | – |
| Wealthsimple Trade | Yes | $0 | – |
Conclusion
With an overwhelming number of online brokers available in the market, a firm with the backing of a reliable name can be a welcome sight for many self-directed investors.
If you want more control over your investments and prefer the integrity of a major financial institution to give you peace of mind over your funds’ safety, TD Direct Investing certainly seems like an excellent option. TD Direct Investing is certainly a great choice for those who already bank with TD, as it keeps everything within the same ecosystem.
The comfort comes at the cost of higher fees compared to non-banking firms like Questrade and Wealthsimple. However, it does give you a better chance to learn and become more confident with self-directed investing.
If you don’t mind the higher fees and commissions, TD Direct Investing gets a Wealth Awesome thumbs up from me. You can check out the platform yourself on TD Direct Investing’s website here.
If anyone still trades with TD, must be something wrong with his head. Why would you pay $9.99 per trade when National Bank Direct Brokerage and Disnat Brokerage are offering commission free trades. I switched all my accounts to NBDB.
NBDB and Disnat platforms are good too. Disnat offers mobile app too.
Christopher, please do reviews about them if possible.
TD is a shame for its high commission fees.
Thanks
Joseph
They do offer their own D-series mutual funds, which has lower MER.
A major problem with them is that Webbroker is frequently down. Try search #webbroker on Twitter and you will see.
Thanks Ryan that’s good to know about Webbroker!
Do not use TD. It takes 20 min to log on with the password, then it will freeze.
The customer service is also terrible.
This was a good product 15 years ago, but not now.
Customer service hours are no longer 24/7 but 5 workdays a week and the hours are reduced to slightly longer than trading hours.
Using my desktop computer, online trading and very minor account changes are still barely adequate, but if one needs to make a non-trading phone call (#3, #3), expect to wait at least an hour or 2 over the phone. Even then you may have to do it all over again when somebody at TD Direct Investing screws up. This has happened repeatedly to me on several occasions even before COVID and now it’s even worse.
Thanks for the info, it’s good to know. I hear the big banks have been having problems with that lately. I’ve adjusted the article slightly due to your info.
THIS IS ANBELIVABLE , CUSTOMER SERVISE SUCKS HOURS AND HOURS ON THE PHONE, INCAPABLE OF FIXING ANYTHING, I AM LOOSING $1000 OF DOLLARS CAOUSE THEIR SOFTWARE IS BROKEN DOWN SLOW, INCAPBNALE OF FEELINGS ORDERS FOR PAST TWO WEEKS TERRRRRRRIBLLEEEEE , PEPOPLE RUN
Wow, sorry you’ve had this terrible experience at TD. Check out my reviews of the top trading platforms in Canada https://wealthawesome.com/best-trading-platform-canada/ I recommend going with others over TD.
Thanks very much for the additional info! Where can I learn more about series F funds?
Hey Jerri, You can learn more about it here: https://www.investopedia.com/articles/mutualfund/05/shareclass.asp
TD Direct Investing allows you to only trade with A series mutual funds, which come with a management fee of 2.25% beyond the cost of the funds.
Do you mean that you pay TD an additional 2.25% on top of the MER that you pay the mutual fund?
Hi Jerri, I meant that Series A funds are usually around 2.25% total MER, and Series F is usually around 1% lower than Series A. It’s not an additional 2.25%. Series F is the same as Series A, except without the sales charge, which you shouldn’t be paying at all if you’re using a discount broker.
what platforms do allow access to F class mutual funds?
Hi Jerri, Questrade allows Series F mutual funds. Make sure it’s the Series F ticker code and you’ll be good to go!