low cost investing – Money Smarts Blog

Best Questrade Review 2020 – Plus $50 Free Promo Code

Who is Questrade?

Questrade discount brokerage is an independent (not owned by a bank) brokerage which has been in business since 1999. Their office is in Toronto, but anyone who is a resident of Canada can trade with them.

Good things about Questrade

Cheap, cheap trades. $4.95 trading fees for trades with 495 shares or less – maximum $9.95 fees for trades with more shares. ETFs can be bought for free!
Ability to hold US$ in rrsp account. If you sell a US$ security in a rrsp – almost every other broker charges 1% ore more to switch it to CDN$ and then another 1%+ to go back to US$.
Good trading platform. I only used the free platform (Webtrader) and I really liked it. It is very simple and doesn’t have all the bells and whistles that other platforms have. Real time quotes is the only feature I need.
Excellent service. I had no problems setting up accounts and doing trades, moving money etc. They have an online chat function which I never used but apparently is pretty good. I either phoned (very quick response) or sent email. Both methods worked fine for me.
No account fees whatsoever.
Low balances. Minimum account balance to open an account is $1000 and you only need $250 to keep an account open.
All account types available. Open, RRSP, RESP, RRIF – you name it, they have it.
Mutual funds – they will rebate up to 1% of the management fee back to the investor. Read more about the Questrade mutual fund rebate.

If you would like to compare all the different Canadian discount brokerages, check out the Canadian discount brokerage comparison.

Promo code to get $50

Get $50 in trading fees when you sign up with Questrade. Click on the banner below to get started or use the code “dc988dd9” to get the free trading commissions.

More Questrade Info

How to buy an ETF or stock at Questrade

How to sell an ETF or stock at Questrade

RBC Direct vs Questrade Discount Broker

As I mentioned last week, RBC Direct has a promotion going on where they will pay anyone 1% of assets moved to RBC Direct from another broker. Since I am a huge fan of low-cost investing (and getting paid a rebate certainly lowers the costs!) I was pretty excited about this deal since it appears to be free money.

Will I save money by moving to RBC Direct?

At first, it seems obvious that getting a 1% rebate for moving to RBC should be quite profitable for anyone but the problem is that the trading fees are more expensive at RBC than at Questrade. Questrade charges $4.95 for all trades whereas RBC charges $28.95 per trade for investors with less than $100,000 in assets (calculated by household) and $9.95 per trade if the household assets are more than $100,000. Regardless of how much you have in assets, the difference from higher trading fees at RBC will reduce the benefit from the 1% rebate.

The factors to consider when thinking about this move are as follows:

How much moola do you have? There is a huge difference in the trading costs at RBC if you have more or less than $100k.
How long will you stay at RBC – if you have $100k and receive a rebate of $1,000 but you stay with RBC for the next 40 years then you have probably paid a lot more in trading costs.
How active a trader are you? If you don’t trade much then the different trading fees are not as relevant.

My analysis

I did some playing around on a spreadsheet to try to determine how much money you need to have to make the move to RBC worthwhile. Since most readers never look at the spreadsheets (I don’t blame you), I decided to put the detailed commentary in the spreadsheet itself and keep the general conclusions in the post.

My recommendations

I would recommend that you don’t move to RBC unless you have the $100k (or very close to it) necessary to qualify for the lower trade costs. As I’ve shown in the spreadsheet, it is very possible for someone with less than $100k to move to RBC, collect the rebate and then move to Questrade but the problem is that if you don’t move the account from RBC within a reasonable amount of time then the whole procedure will end up costing you money. If you are an active trader then even $100k won’t be enough – plug in your own number in my spreadsheet (or your own) to see if it is worthwhile.

My second recommendation is that if you do the move – once the rebate is paid then you should take a new look at your investing costs and act appropriately. If you are really happy with RBC then you might choose to stay there but if low costs are your primary concern (like me!) then you should consider moving to Questrade as soon as possible to get the lowest commissions.

And one more thing

Another thing to keep in mind is that RBC ran this promotion before in 2006. I can’t guarantee that they will do it again in a few years but it might be an idea to move the money from RBC after the rebate is paid in order to be eligible in case the 1% deal is offered again.

If you are planning to move back to Questrade then read about the Returning to Questrade deal on transfer fees.