Canadian Online Discount Brokerage Pricing Review & Comparison – Common Account Types

Table of Contents:

  1. Introduction
  2. Overview of Common Account Types & CIPF Membership
  3. Commission Fees and Funding Requirements
  4. Overview of Registered Accounts – Fees and Funding Requirements
  5. Overview of Mobile Trading Enabled Sites
  6. Overview of Options Commission Pricing
  7. Conclusion

Last Updated: December 2014
Overview of Common Account Types & CIPF Membership

Canadian online discount brokerages offer several account types to Canadian investors.  Generally they fall into the category of “registered” or “non-registered” accounts.  Registered accounts are those that require government registration, such as the “tax free savings account” (TFSA), registered retirement savings plan accounts (RRSPs) or registered education savings plans (RESPs).  While there are several other registered accounts available, we’ve limited our current comparisons to those three as they are the most popular.

Non-registered accounts consist of either a “cash” account or a “margin account”.  Cash accounts are those that allow you to purchase and sell a security with only the cash you have in your investment/trading account.  For beginners, this is the safest choice as the alternatives (margin accounts) require more understanding of risks and monitoring of account balances.   Margin accounts, on the other hand, allow investors to borrow money from their discount broker to be able to purchase securities.  A handy way to think of margin is like a ‘line of credit’ that you can borrow to trade/invest.  For certain types of transactions, like short sales or advanced options trades, a margin account is a requirement at most discount brokerages.   As with a line of credit, just because you have the credit available, does not mean you have to use it, which is good to know for beginners.

The Canadian Investor Protection Fund (CIPF) helps to ensure that an investors assets up to $1 million dollars are insured by the government of Canada in the event that the CIPF member firm becomes insolvent.  To learn more about the CIPF, you can visit their site here http://www.cipf.ca/Public/FAQ/Coverage/General.aspx

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To find out about any of the discount brokerages listed in our comparison tables, simply click on the logo and you will be taken to a detailed review of each discount brokerage. We’ve also got a current deals section to showcase promotional offers currently being advertised by discount brokerages. (available here)

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Next Page: Commission Fees and Funding Requirements

 

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