As the world gets more interconnected, and fintech takes over the world, barriers get broken down and individuals get access to some of the best tools in the business.

Online trading in Canada is no different, and as investors – both new and experienced – start to take control of their own financial future, the right brokerage platform is an integral piece of the puzzle. This becomes even more important as trends like DIY investing and ETF indexing pull people away from places like retail banks which offer a small selection of mutual funds, with high annual fees and possible front-end or back-end sales charges.

Of course, everywhere you go, people have their own views and perspectives on what makes an online brokerage amazing, and what makes it less than stellar. What we aim to do is facilitate your process if you are a) brand new to trading and looking for a platform and b) are an experienced trader looking to switch platforms. Instead of giving a review of each and every single brokerage in Canada, we decided to rank our top 5 online brokerages based on several key points, this way we can have a more user- friendly comparison.

I remember a few years ago, when the Canadian banks used to charge $29.95 a trade, and incoming platforms like Questrade were the new kids on the block. Things have changed quite a lot during this time, and it has become a very competitive (and profitable!) business. This is great for an investor in Canada as it means cost savings as firms try to undercut each other, as well as innovative platforms as technology and user interface becomes a key differentiator.

Our top online brokerage platforms in Canada were based on 3 key characteristics:

  • Cost/price point
  • User Interface
  • Extra tools i.e research and reporting
  • We also included some of the bonuses offered for those who are on the fence of getting their feet wet!

The top online brokers in Canada that made the list were:

  • Questrade
  • Interactive brokers
  • Qtrade
  • Virtual brokers
  • RBC Direct investing

And the winner is Questrade! The logic behind this choice is an all-rounded approach that is accessible to most investors in Canada. Questrade has the second-lowest prices, and no minimum deposit as well as free ETF’s – this is a huge plus for the average investor!

Interactive Brokers, a close second, edges on price but loses out on the functionality of Questrade’s platforms as well as the $10,000 minimum which is a barrier to entry for some of those new to trading.

Of course one of the big Canadian banks would make the list…it is important to note just how much business is being pulled away from them at the moment and what this means for the future of online brokerages in Canada. As a result, they have piled some serious money into innovation and technology over the last few years. One of the biggest changes, which I alluded to earlier, was the dropping of fees from that $29.95 range. Noticeably RBC dropped it down to $9.95, and CIBC to $6.95, however in terms of the other characteristics outside price, CIBC still has a decent way to go. TD Direct Investing and Scotia iTrade are fairly good platforms, but RBC just pips them on this list in terms of price and future innovation. It would be wise to keep an eye on developments from the Big 5 in the near future as they take their technology to the next level.

There are certain things about each platform that make them unique and tailored to your specific niche. On your search for a new online brokerage (or replacement brokerage), try to narrow down what is important to you, and see if you are willing to pay a small premium for it- cost is not the only factor after all!

Some things might be more specific to your needs such as:

  • Availability of an amazing mobile app or desktop platform?
  • Access to more than the US/Canadian Markets
  • Ease and speed of transfer in-between brokerage/bank accounts

Questrade wins as an all-round outperformer in all categories, but depending on your individual investment needs one of the other platforms might be best suited. For example, those looking to get access to markets outside the US & Canada might want Interactive brokers for the purpose of more global exposure. Likewise, someone wanting more specific order routing might want one of Virtual brokers many desktop platforms. It really is all relative to your needs and requirements.

Just like picking up a new phone or laptop, an online brokerage account requires careful consideration, don’t be afraid to register and test-drive a few of them and get the feel of which one appeals to you!

Good luck and happy investing!