I just wanted to put a little comparison of all of the TFSA brokerage accounts available to Canadians.
Please, if you have further information on the Tax Free Savings Accounts (TFSAs) offered by these brokers, leave a comment, and I'll add it in.
One significant issue is that since the TFSA program starts this year, everyone has just $5000 to contribute at the max, so any big administrative fees can eat away at any tax-savings, at least early on with the program. Also, any big stock trading commissions can eat away at any earnings as well, so take a look at my comparison of Exchange Traded Funds that trade on the TSE/TSX/TMX.
This information is the best that I could come up with as of January 3rd, 2009. I don't have any experience with any of these, so it is what I've found on their own websites. I will also add that I'm not sure how one can move some of their non-registered taxable investments into a Tax-Free Savings Account, so be sure to ask about that when you open up any brokerage account (hopefully you won't have to sell it and then re-buy it in the registered account).
From what I've read, for most brokerages, it seems like you could just print off the forms, fill them out, and then drop them off at the bank branch rather than mail it in yourself.
TD Waterhouse
Their TFSA is available now. There is a $50/year administration fee, but it is waived if you have more than $100k in household assets with Waterhouse OR if you agree to receive all statements electronically ("eServices"), so be sure to do that. Trades are $35 for Canadian equities or $39 for US equities, or $9.99 if you have >$100k in household assets with them. Withdrawals appear to be $25, but one per year is free.
You can buy the E-Series mutual funds described below in a TD Waterhouse account, so this may be a better way to go as it gives you the flexibility to buy stocks/bonds/trusts/etc later on. I'm actually doing this at the very moment, and I'll make a post on my experiences.
TD E-Series Mutual Funds
TD offers a small no-frills line of mutual funds that have decent MERs (under 0.5%/year, some as low as 0.17%), which might be a decent option of getting into some ETF-style index funds with no commissions. These are especially worth investigating if you don't qualify for low trading commissions on the other brokerage accounts.
To get the TD E-Series mutual funds, it's best to go into the branch, and open a Mutual Fund TFSA, and then once approved, you can convert that to an E-Series Fund TFSA here.
BMO Investorline
Similar to Waterhouse, commissions are $9.99 if your household assets are >$100k with their brokerage (not the bank), otherwise $25/trade. Their TFSA fee schedule is here. Otherwise, their rates tend to suck, $50/year admin fee unless you have >$100k household assets with them, and $25/withdrawal. The admin fee is however waived in the first year that you open the account, but it will cost you around $125 if you try to transfer the account elsewhere later on. I don't recommend them.
RBC/Royal Bank Direct
Supposedly they don't have it set up yet, but should by the end of January 2009 (see the post about 3/4 of the way down).
From their website on their TFSA discount brokerage:
- NO annual administration fee
- NO minimum balance requirements
- NO withdrawal fee
CIBC Investor's Edge
No plans for a TFSA brokerage account at this time (seriously?!?!?). Supposedly they might offer one later on in the year.
ScotiaBank
It was hard for me to find information on this one, I kept getting RBC websites while searching for it. From a financial webforum, supposedly no administration fee, but a $25 fee for any withdrawals. If anyone has anything more up to day, please let me know!
Questrade
They seem pretty decent, from their website on TFSAs:
- No annual fees, no inactivity fees, and a low account-opening minimum of CAD $1000.
- Democratic pricing -- our low commissions on stock trades are available to everyone: 1¢ per share, minimum $4.95 / maximum $9.95.
- Hold and trade U.S. dollars and pay no forced currency conversion fees.
- Trade gold bullion in your new account.
Tradefreedom
They do offer TFSA brokerage accounts. $9.95 per trade even as a low-volume trader, and there are ECN fees, but they're less than $0.01/share transacted. Their fees/commissions page doesn't list TFSAs under their registered accounts for some reason (it doesn't mention them at all), but it looks like there are no annual administration fees, but a $25 fee for a partial withdrawal. They have no minimum account balance fees, or inactivity fees.Credentialdirect
This is the brokerage run by the credit unions in Canada. Their plan has no administrative fees for TFSAs, and no withdrawal fees. There is a fee for transferring out, but all of the other brokers have it too. Seems like a decent offering.
Etrade Canada (owned by Scotia now)
Their TFSA is not yet available, but will be "sometime in 2009"
Other Resources
Canadian Financial DIY - nice chart comparison and other details
VirtualBrokers was on the
VirtualBrokers was on the Globe and Mail list this year..
Share Market
It was a awe-inspiring post and it has a significant meaning and thanks for sharing the information. Would love to read your next post too...
Thanks
Regards:
Share Market
TFSA and private placwements
Has anyone been sucessful in placing a private placement in a TFSA. I have wasted a lot of time with scotia itrade. My PP is stil subject to the four month hold and includes warrants. I have been told if I put it in now It is based on the original terms of the PP. scotia itrade wanted clarification from Revenue Canada and quite frankly knew less about private placements than me.. Is there a brokerage out there that specializes or at least is familiar with the procedure? Thanks
private placements
I have done a TFSA contribution form a private placement. I had to open a TFSA account with the broker (Research Capital, now Mackie Research). I wouldn't even think of trying to do this with a bank/discount broker. I now just have multiple TFSA accounts, not a problem from CRAs point of view.
Nija Trader
Does anyone know of a TFSA account provider that supports Ninja Trader Platforms?
Regards
TradenRelax
and the beat goes on
No I have not heard of any as of this date
Does anyone know of a TFSA account provider that supports Ninja
i am looking for such provider too. any news?
TFSA Contributions in-kind
Can anyone advise on the ability to 'contribute' shares (or options) in a private Cdn company into one's TFSA account, at the appropriate market value of course? Thx.
I believe that it must be
I believe that it must be something publicly traded. Sorry!
Questrade comments
Hi - just wanted to add I've been with Questrade for a couple years with 4 accounts. I really like the low commissions and no maintenance fees - however, I recently got screwed on fees when I sent some TSX-V shares from a private placement to be deposited. First time I've done this, and apparently they charge $200 to deposit shares, whereas other brokerages like RBC Action Direct, iTrade, etc. all do the same for free (and the reps give the impression you are talking crazy when you ask them if they charge). I didn't realize Questrade charged this fee until after, as who would charge a client to deposit funds, but despite protests they refuse to budge (the fee is on their website but with everything else being no-fee and low-cost I never thought to check) Anyways, lucky for me they don't charge a fee for your account going dormant so I am going to merrily drain the accounts of cash there as securities get sold and redeposit the funds elsewhere (no cost to transfer funds to bank account at least!) Or I will deposit enough into the RRSP accounts to have someone else cover the transfer-out fee to get the registered funds out.
I also once called into the trading desk to cancel a buy order for an international stock, and two weeks later the desk called to say they just executed and filled my buy order and how would I like to pay? Luckily they reversed that.
However, if you can stay on top of their fees, the cost is cheap to trade. Just be wary - this fee wiped out all my savings on commission over the past year.
Other Options for Brokerages?
Thanks, Jon, for your comments on Questrade. I was seriously considering them for the TFSA. Does any "trading" platforms like Interactive Brokers offer TFSA? CIBC has just started the TFSA, and has the Edge Advantage package for 50 trades for $395, which is not bad but I would prefer something like IB where you pay only a few bucks as commissions.
Thanks.
We are wondering when to
We are wondering when to transfer our incometrusts to our TFSA accounts because without the proper date the distribution may be lost. Any help is appreciated.
QTRADE - ATB FREE TFSA Account -
Very LOW trading fees .. start at 19 bucks / 24 for limit trades.
NO annual/administration FEES
Questrade Fees Can Be Deceiving
I have a Questrade account, and as far as fees go it is pretty good. You can directly deposit electronically by making a bill payment. However, the marketing for the dual currency accounts is misleading. They say you can have US cash in your account. This is accomplished by buying a US dollar mutual fund. Every transaction on this US position costs $5. I have searched the Questrade site pretty well and have not found this amount disclosed anywhere.
Let me give you an example of a trade I made, and the fees that were charged.
1. I bought a US ETF option for $89 US. $11 commission. Total $100 USD. Canadian dollars were exchanged @ 1.25 and $125 CAN was removed from my account.
2. I sold the option for $181 to close the position. $11 commission. Total $170 USD. US mutual fund units were purchased. $5 commission. Position 165 US MF units. (This is what they call the US Cash position)
Sneaky, huh? But it gets worse! IF I buy another US option, here's what happens:
3. US mutual fund units are sold. $5 commission. Account is credited with CAN @ 1.24. OK.. 165 @ 1.24: $204.60 CAN.
4. Buy a US ETF option for $149 US. $11 commission. Total $160 USD. Canadian dollars are exchanged @ 1.25 and $200 CAN is removed from my account.
Wow. So the spread is about $2.30, plus the $5 for trading with US Dollars, plus $11 for the options trade. Total: $18.30 (one way) That can add up real fast.
If you call Questrade and ask them, they will say they are NOT converting the US funds to CAN before making US purchases, but simply "valuing your US cash in CAN at the time of the trade to determine your buying power". Regardless,any trade made with this "US cash" position will cost $5 plus .5% spread, and the account will be debited according to the value of the US dollar in Canadian at the time of the trade, so I don't see what the difference is.
Hope this helps.
ETrade TFSA Available
General info/sign up can be found at: https://www.canada.etrade.com/splash/TFSA09.shtml?gclid=CP-55Oq5xZgCFQETGgodr0zd0g
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