Questrade Mutual Fund Fee Rebate And Free Transfer Offer

Questrade discount brokerage has just come out with a great way for retail mutual  fund owners to save on high management fees by offering to rebate up to 1% of those  fees.

What’s the deal with the Questrade mutual fund rebate?

Questrade will rebate up to 1% of the management fee for any mutual funds  held at Questrade.  This amount has to exceed $29.95 per month for the  investor to get any rebate.  This means that you need to have more than $36,000 in mutual funds before the rebate kicks in.

How is this possible?

When an investor buys a mutual fund from an advisor then the advisor is paid  a “trailer” each year which is based on the amount of the investment.   Typical trailers for equity mutual funds are 1%.  Bond and money market funds  will be lower.  The amount Questrade will rebate will be equal to the trailer  paid on the funds you owned.

The problem is for a do-it-yourself investor who wants to buy retail mutual  funds is that they can only buy them through an advisor or a discount  brokerage and they are charged for the trailer even if they don’t have an  advisor.  With this new program the investor will be able to save most of the trailer amount.

How much will it cost to transfer my mutual funds to Questrade?

If you transfer before March 2, 2009 from a different financial institution and transfer at least $25,000 then it will be  free of charge.

How much are mutual fund trading fees?

Questrade charges $9.95 per mutual fund trade.

I don’t have $36,000 – is it still worthwhile?

Depends on the situation – if you are close enough to $36k (ie $30k or more)  and will be buying more mutual funds then it might be worth doing even though  you won’t get the rebate for a while.  At the very least it won’t cost you  anything.

Another situation might be if you have some back-end funds that you don’t want to pay commissions on.  If you are planning to just buy low cost ETFs then you might consider moving the mutual funds to the same institution.

Where do I sign up?

Click on the banner below or on any of the links you see in the article.

I demand more information!

Check out my Questrade discount brokerage review and my Questrade referral promotion articles for more information.

Is it really cheaper to pay $10 per trade rather than get my advisor to do it for me?

Let’s look at an example – say you have $100k in mutual funds with an average mer of 2.5% and the only service you get from your “advisor” is he completes 12 trades per year for you “free of charge”.

With the advisor you will pay a total of $2,500 per year for the fund management, the advisor’s services and the 12 trades.

With Questrade you will get a rebate of $1,000 (approx) and you will pay $120 for the trading fees for a grand total of $1620 for the fund management and the 12 trades.

$2,500 (current fees) – $1620 (Questrade fees) = a savings of $880 per year.

Personally, I’d rather invest in passive index funds and ETFs which are way cheaper (also available at Questrade) but for anyone who wants to own retail mutual funds – this is a great deal.


RBC Direct Discount Brokerage Review

I recently moved my investment accounts from Questrade to RBC Direct in order to take advantage of the RBC 1% rebate deal so I thought it would only be fitting to do a review of their services.

Who are they?

RBC Direct is the discount brokerage arm of the Royal Bank of Canada which is the biggest Canadian bank.

Good things about RBC Direct

I like the trading platform – it looks nice, easy to use and is well designed.  There is also access to analysts reports etc.  It does the job.

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

Bad things about RBC Direct

Everything else.  🙂

Fees – ridiculous fees in my opinion.  $10/trade is not bad for a passive investor but why anyone would pay $29 a trade is beyond my comprehension.  I’ve outlined the fees at the bottom of the post.

No electronic money movement
unless you have a RBC bank account.  This is the stupidest thing about RBC – yes, I understand they want to ‘bundle’ all their services but forcing investors to open up new accounts to use their discount brokerage when most of the other discount brokerages offer excellent electronic money movement options is just bad business.  Get out of the stone age RBC!

In order for me to put money into the account, I have to write a cheque and mail it to them.  If I want to remove any money – I have to pay $10 for a cheque to be written.  My plan is to keep all cash in the account until next year when I can move back to Questrade and then withdraw it electronically.  The most annoying part of this is that when I looked into the 1% deal – a customer service rep told me on the phone that I could do electronic money movement which turned out to be false.  Speaking of customer service….

Bad Customer service

I won’t bore you will the multitude of issues I’ve encountered with RBC but suffice to say that I think their computer system was probably build sometime in the 20’s which makes it very hard for the customer service reps to do their job.

Most of the reps are pretty good although one time I called without an account number and the rep told me it was “very hard to look up an account without the account number”.  I challenged him on it and he somehow was able to find the account immediately just using my name.  Kudos jackass…kudos.


I can’t really recommend RBC Direct since I really don’t like them and can’t wait to collect my 1% and go back to Questrade.  However, if you already do your banking with RBC and have a $100,000 in assets then they are not a bad choice.  If you don’t meet those criteria then look elsewhere.

Trading Fees

  • $28.95 per trade unless you have $100,000 in household assets at RBC Direct or complete more than 30 trades per quarter.
  • $9.95 if you have $100,000 in household assets at RBC Direct.
  • $9.95 if you make between 30 and 149 trades per quarter.
  • $6.95 for those super-active traders who do at least 150 trades per quarter.

Annual account fees

  • No fees if total client assets are $15,000 or more.
  • If assets are less than $15,000, a $25 quarterly fee will be charged regardless of the number of accounts.  Can be avoided by making three or more trades in all accounts

Other discount brokerages reviews

Questrade discount brokerage review.


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.


Strategies for ETFs and Index Funds

In my last ETF vs Index Funds post I concluded that I really didn’t know what the best way to approach the decision between buying ETFs (exchange traded funds) or index funds.

I was trying to show that some investors with small portfolios would be better off starting out with more expensive (because of trading costs) Exchange Traded Funds because eventually they will save money, rather than go with index funds first and then switch to ETFs because if they don’t switch to ETFs later on then the index funds will eventually be a lot more expensive.

As I wrote the post however it hit home that my approach was somewhat flawed because ETFs are quite a bit more work than index funds so someone who can’t be bothered doing a transfer to a discount brokerage probably isn’t going to be interested in logging into their discount brokerage account every month or two and buying more ETFs.  Figuring out the best solution to index funds vs ETFs is not a simple process.

So to clear up the whole issue once and for all, I have come up with a brand new strategy which actually applies to anyone – lazy or not! Please delete my last post on this subject from your brain and read on….

A bit of background

Buying ETFs is always a manual process – first you have to log into the trading platform of the discount brokerage. Once you check the current price of the ETF (you need to know the symbol) then you enter an order which hopefully gets filled. It’s not a lot of work and I find it quite enjoyable, but for an investor who wants a hands off strategy then it might not be the best approach.

Buying index funds (or any mutual funds for that matter) on a regular basis is sooo easy. This is the big reason why ETFs will never be as popular as mutual funds – most people won’t do the work involved to buy ETFs. With an index fund you can set up a monthly purchase plan (often called a PAC) to take a set amount of money out of your bank account each month and purchase various index funds in the proportion you want. For example if you want to buy $100 each of TD e-fund bond, Canadian equity, US equity funds every month then you set that up once and from that day on, $300 will get taken from your bank account each month and a $100 purchase for each of those funds will get completed. Unless you change bank accounts or want to change something such as asset allocation or portfolio rebalance, you never have to lift a finger. I’ve recently found out that Questrade is planning to allow regular debits from your bank account which will fund your account on a regular basis. You would still have to purchase the ETF manually however since they trade like stocks.

New (and improved) Strategy

What I suggest (until next week when I come up with something better) is do your accumulation of assets at TD using their index funds and automated purchases, and then once you have enough assets to make ETFs worthwhile, transfer those assets over to a discount brokerage (I use Questrade ). Once the assets are at the discount brokerage then you buy ETFs. The trick is to continue to do your accumulation at TD.

What happens if you already have a fair bit in assets? No problem – put the assets you have in the discount brokerage and buy some ETFs. Then set up the TD account and follow the accumulation and eventual transfer procedure as described above.


One question you might ask is about the transfer fees to move assets from TD to the discount brokerage. I would say that should be factored into the equation but also to try to get the discount brokerage to pay for the transfer. If you are moving big bucks ie $100k then I think your odds are pretty good of getting some or all of a transfer fee paid for – even to an existing account. Keep in mind that transfer fees for rrsps are generally no more than $150.

The next question is – at what point of accumulation do I move the assets to the discount brokerage? $25k, $50k, $14 million?

The answer is a bit tricky. You have to calculate the MER being paid at TD and the MER on the ETFs that you would buy at the discount broker and also include the trading fees that you will probably incur at the discount broker – but since the trades aren’t going to be very frequent they can almost be ignored.

For example in my last post I calculated a potential TD MER of 0.44% and a Questrade MER of 0.19%. If you ignore trading and transfer costs then it makes sense to move assets to Questrade every month. This won’t work of course because of the transfer fees and hassle – plus it’s just dumb.

What I would suggest is to transfer assets to Questrade at a point when you can either get a free transfer or the difference in MER is equal (or close to) the cost of the transfer. Now mathematically this doesn’t really work out since you should really be transferring money as soon as you have enough that the difference in MER for several years is equal to a transfer fee, but the other cost in a transfer is the hassle of actually doing the transfer so it might not be worthwhile to do it too often.

So using my example of TD MER of 0.44% and Questrade MER of 0.19%, the difference in MER reaches $125 (I’ll assume this is the transfer cost) at $50,000. According to my rule, this is when you should transfer the assets to the discount broker. This is a pretty reasonable rule since for most investors it will take quite a while to get a TD account up to $50k so it’s not like they will be transferring every six months.

Other things to think about

Look at the difference in MERs – in my example I used several low cost ETFs from Vanguard – if you choose to use more expensive ETFs from iShares (for example the currency neutral options) then the MER difference between TD e-funds and the ETFs will be much smaller and you might end up transferring assets at a much higher level (ie $100k or more).

Trading costs – I’m assuming that once you transfer the money to the discount broker, you buy your ETFs (not too many), set up dividend reinvestment plans and then don’t do any more trades.


Index Funds VS. ETFs

As a low cost investor I like researching different low cost options and trying to decide which is best for my situation. One question that comes up frequently from investors with small portfolios is whether they should buy low cost index fund such as the TD e-series or by ETFs which have lower mers than the index funds but you have to pay a minimum of $4.95 per trade. Other blogs have covered this topic and based their answer mainly on the portfolio size. If your portfolio is significantly less than $25k then start an account at TD and around $25k mark, transfer it to a discount broker like Questrade and buy ETFs. This is definitely the cheapest strategy but it involves setting up two accounts and doing one transfer.

One problem with that method is that I suspect a lot of investors will set up the account at TD but they won’t switch to a discount brokerage at the right time or at all which means in the long run they will end up paying more fees compared to if they had just started buying ETFs even when the account was fairly small.

To avoid this problem I would suggest that another strategy to consider is to pay the higher costs of a discount brokerage right from the beginning because it won’t be long before you will be saving money and can recoup the extra expenses from earlier on. What I did was to set up a model which will tell me if an investor has a small portfolio then how much money per month do they need contribute to make this strategy worthwhile. There is a link to my spreadsheet at the bottom of the post.

Another part of this idea is to start with Questrade because it’s the cheapest discount brokerage available but alter your trading habits – if you contribute monthly then only buy one ETF per month. Another great idea is to only buy an ETF every second or third month, especially in the beginning.

What we are really looking at is the idea of doing either TD or Questrade and seeing how long it takes for the break even point to occur. If the point is fairly soon (ie less than 5 years) then it might be an idea to just go with the ETFs if you don’t think you will make the switch from TD to Questrade down the road.

This chart indicates the final numbers. The second row has the portfolio size, the second column has the monthly contributions and the other numbers are the number of years until the break even point. Keep in mind that the break even point is when all the losses in the early years are made up for.

For example if you have a starting portfolio of $10k and you contribute $250 per month then after eight years the total costs of ETFs (for all eight years) is the same as the cost of index funds.



Portfolio size


































As you can see, the monthly contribution is a big factor in this decision – if you are contributing larger amounts then even if you start with nothing, the Questrade option is better. Another factor of course is the starting portfolio size – if you already have $20k then it’s probably better to start at Questrade . The reverse of course is true – if you are contributing $100 per month then you are probably better off with TD unless you have close to $25k.

This is definitely a personal decision but I would think that unless you are super keen to save every cost possible then consider doing Questrade from the beginning if the break even point is less than about 5-7 years.
Keep in mind as well that a lot of the initial trading costs can be saved by contributing to the Questrade account monthly but only buy ETFs infrequently.

I’m also using a very simplified portfolio that is equally weighted among the securities. If you want more securities that are not equally balanced then that may add to the trading costs with the Questrade option. Even there if you want a small emerging market exposure you can just make one purchase a year for example in that class. You might not have your desired asset allocation at all times, but if you portfolio is very small then that probably doesn’t matter that much.

This analysis assumes that you value low costs above convenience – one big advantage of an index fund is that you can set it up to take the money from your account and make the index fund purchases automatically. This can’t be done with ETFs so you have to login every month and make a purchase.


If you are a big contributor with a small portfolio and are keen (but not superkeen) to save costs then it might make sense to start at a discount brokerage instead of at TD and then switching.

I suspect for a lot of investors however it might make sense to just go with TD and only switch over when they have a significantly large amount say over $50k. Another plan might be to accumulate $50k or $100k at TD and then transfer to Questrade if they will pay for the transfer costs. Meanwhile you keep accumulating at TD.  The choice between index funds vs ETFs is not an easy one.

This is the spreadsheet I used.

More information

Should I Buy ETFs Or Index Funds?


Questrade Referral Promotion

Questrade discount brokerage in Canada has a new referral program where you get $50 worth of trades if you are referred by another customer. The basic program has been around for a while but they have improved the referral process.

Lowest Stock Trading Commissions!

Feel free to use this link when you fill out the application. For other bloggers feel free to sign up for the referral program and of course use “dc988dd9” as the referrer ID.

You can see what I wrote a while ago about Questrade here.

Why I like using Questrade for trading stocks and exchange traded funds

I use Questrade for my non-registered leveraged account as well my rrsp and I’m quite happy with them. My attitude about brokers is that their service is a commodity in that they all do the same thing – they convert your money into shares and vice-versa so the only variable as far as I’m concerned is the cost. As a low cost investor I want the lowest fees and for my situation, Questrade has the lowest fees.

Questrade also deals with mutual funds -they will rebate up to 1% of the management fee back to the investor.  Read more about the Questrade mutual fund rebate.

The minimum to open an account is $1000. The minimum to keep an account active is only $250.

My suggestions on which discount broker to use:

If you are looking to do a lot of rrsp “wash trades” then Questrade and TDW are your best bet. A wash trade is when you sell a US$ security in your rrsp, it gets converted to CDN$ (and you pay a currency conversion on it), and then you buy a US$ security and you pay the currency conversion again. They do not charge for the conversions in this case.

If you are looking for a discount broker that offers a lot of extras like fancy graphs and research then you should stick with the big banks. But consider that for $29/trade (if you don’t have $100k) you are paying a $24 premium per trade for that extra research, bells, whistles etc. Even if you only do 10 trades per year that’s $240 per year. There is a lot of research available for free on the internet and $240 will buy quite a bit of the paid research (or a lot of beer).

If you are looking for more information on mutual funds, index funds and ETFs then sign up for a Morningstar free account.  Morningstar is the industry leader in investment information.


Indexing My RRSP

I recently moved my rrsp account from low cost mutual funds to Questrade where I bought some ETFs. I thought I would share the experience with you since I learned a few things during the process.

My plan was to buy four ETFs:

  1. XSB – ishares short term bond (Cdn $)
  2. XRB – iShares real return bond (Cdn $)
  3. VTI – Vanguard US equity (US$)
  4. VEA – Vanguard Europe and Far East (US$ to buy)

I described in a previous post about my first efforts at completing an equity trade. With this solid background I figured I’d be in better shape this time.

If you check out my post on my planned asset allocation you’ll notice that this portfolio is incomplete. That’s because we have several investment accounts so this one doesn’t represent the entire asset allocations. Once I get all the accounts figured out then I’ll post on the final asset allocations.

My goals for this exercise was to try to buy as many shares as possible and minimize the amount of cash in the account and to try to get it over with quickly. I didn’t want to have to spend a lot of time at work trying to get the best price for each security.

I started off with the Canadian purchases. This turned out to be a minor mistake because for some reason I thought that once I purchased the Canadian securities I would phone Questrade and get the Cdn$ converted to US$ and then buy the US$ securities. In actual fact when you buy US$ securities, you put the order in and then the dealer converts to US$ when the trade gets filled. The problem is that since you don’t know the exact currency conversion rate in advance you can’t utilize your last few dollars properly when buying a US$ security since you don’t know the exact maximum number of shares you can buy.

I used only limit orders which are market orders with a limit on them ie if you put in a buy when a stock is trading for around $50.00 with a limit of $50.50 then you will get the market price but only if it is less than or equal to $50.50.

Anyways, on with the trades…

XRB – The ETF had gone from $18.49 to $18.50. I put in a limit order for 700 shares with a limit of $18.55. It was filled immediately for $18.49. Very successful trade!

XSB – This one caused me a some trouble. This one has very slow trading activity so unless your order gets filled right away it might take a while. The last order was $27.97, I put an order for 1050 shares with a limit of $27.98 – first mistake – I should have had a higher limit. Second mistake, I didn’t put in a “all or none” order and 50 shares got filled at $27.98. The price drifted up during the day so my 1000 shares remaining with a limit of $27.98 couldn’t get filled. The problem was that I was already looking at one commission for the 50 shares so if I cancelled the remaining order the I have to pay a second commission. Luckily the trades are cheap at Questrade because by the end of the day the order had expired. The next day the last trade was $28.03, I put in my order of 1000 shares with a limit of $28.05 – filled right away.

VTI – this ETF had the higher share price so I bought it next. Last trade was $146.17 so I put in order for 350 shares with limit of $146.20. The price went up quickly to $146.20 so I had to wait about 15 minutes and it was filled at $146.20.

VEA – my problem with this order was that I didn’t know how much money I had in US$ – I called Questrade to get a recent conversion rate which I used to approximate the amount – I decided to go for 1000 shares. Last trade was $47.29, I put in order for 1000 shares with limit of $47.32 with all-or-none to prevent partial filling. Price went up for a while but it got filled about half an hour later at $47.32.

The next day I checked my cash balance and I ended up with about $900 in cash. This isn’t a big deal since these ETFs will be creating cash via interest and dividends anyways but if I could do it again, I would have left one of the Canadian securities to be the last trade so that I could accurately use up all my cash.

Anyways, it was fun buying these ETFs and I ended up learning quite a bit in the process.