Tuesday, November 3, 2009

Broker Options for Canadian Investors

Compared to the mid-90's when I first started investing, the number of online stock brokers available to Canadian investors has gone up dramatically. Most importantly, the costs to invest online have gone down dramatically. I remember when I had to pay $29.95 per trade!! No there are a number of options available for the Canadian investor that can dramatically reduce costs.

The sad thing still is that many of the bank run brokerages still believe that it is ok to continue charging $29.95 per trade. Banks like Royal Bank and Bank of Montreal have special deals where you can get trades down to $9.95 but often there are a number of rules to get to this level. For example RBC Action Direct requires a portfolio value of $100,000 to get these lower commissions. So people with less money have to pay more and those with more less. Nice thinking RBC. Even with a portfolio that could get me the lower fees I don't out of principle.

So before you head out and select your broker, be sure to focus on costs. Most discount brokers offer exactly the same features and benefits and in my experience the same level of service. There is absolutely no reason to pay more for your trades!

Here are three low cost options for you as an dividend investor in Canada:

1. Questrade (disclosure: my broker)

Cheap $4.95 trades. Some people love Questrade, some hate them. I have never had any service complaints or issues with my account (knock on wood).

2. TradeFreedom

I have never used TradeFreedom but have heard good things. Lower commissions than the banks!

3. Interactive Brokers

Most complex broker and really intended for traders. No hand holding with these guys but probably the cheapest available (Max 0.5% of Trade Value plus exchange fees).

I know there are more out there - let me know the cheap ones in the comments section.

This article was written by The Dividend Guy. You may email questions or comments to me at info@thedividendguyblog.com.

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