National Bank Direct Brokerage Review
As of October 2019, National Bank Direct Brokerage has made an ambitious move in it’s pricing structure to unveil the leading rate (for now) among Canadian bank-owned online brokerages for commissions for equity trades. In addition to the lowest rates, they now have a standard offering of discounted standard pricing for young investors (aged 18 to 30) which includes 10 free trades per year. Individuals who open or have a National Bank account are also eligible for slightly discount trading commissions too. Finally, National Bank Direct Brokerage also offers completely commission-free trading for Canadian and US ETFs – so long as a minimum quantity are purchased or sold (at least 100 or more units are required).
As they are a bank-owned online brokerage, National Bank Direct Brokerage (NBDB) offers the convenience of branch services as well as being able to manage other National Bank financial products with via the standard National Bank online interface. Like their peers, National Bank Direct Brokerage offers online trading in stocks, ETFs, options, mutual funds and bonds.
|Standard Equity Commission||$9.95|
|Best Commission Price||$0.95|
|Minimum to Open Account||Not Required|
|Commission Free ETFs||Yes|
|Student Pricing Offer||Yes|
|Account Types Offered||Funding Requirements and Fees||Registered Account Types and Fees|
|TFSA||Minimum Opening Balance||Not Required||TFSA||Annual Charge||$100 per year (if account is <$20 000 or if <5 commission generating transactions done between June 1st & May 31st)|
|RRSP||Minimum Account Balance||Not Required||Transfer Out||$150|
|RESP||Minimum Balance for Best or Discounted Commission||Not Required||Withdrawals||$0|
|Cash||Minimum Commission per Equity Trade||6.95||US Dollar Account|
|Margin Short||Maximum/Standard Commission per Equity Trade||9.95||RRSP||Annual Charge||$100 (if account is <$20 000 as of May 31st or if <5 commission generating transactions done between June 1st & May 31st)|
|Margin Options||Minimum Trades per Quarter for Best Commission Rate||30||Transfer Out||$150|
|CIPF Member||Inactivity or Maintenance Fees||$100/year||US Dollar Account|
|Conditions for Inactivity/Maintenance Fees||$100 per year (if account is <$20,000 or if <5 commission generating transactions done between June 1st & May 31st)||RESP||Annual Charge||$100 per year (if account is <$20 000 or if <5 commission generating transactions done between June 1st & May 31st)|
|US Dollar Account|
|Last updated: Mar. 8, 2016|
Pricing & Fees
After about five years at their previous commission rates, National Bank Direct Brokerage made a significant revision to their commission pricing structure in mid-October 2019 to make them the lowest cost bank-owned online brokerage for active investors and one of the most compelling for younger investors.
With so much volatility in the pricing of commissions taking place, National Bank Direct Brokerage was the first bank-owned online brokerage in Canada to significantly reduce their commission rates. In particular active investors, now defined by NBDB as individuals who make at least 100 trades in a quarter (3 months), are able to pay $0.95 per trade. Younger investors also get an incredible pricing break, receiving a standard commission pricing rate of $4.95 per trade and 10 commission-free trades per year – a bundle never seen before for Canadian online brokerages. Finally, for individuals who also have a bank account with National Bank, they can get access to slightly discounted commission rates of $6.95 per trade.
Interestingly for options pricing, even though the ‘commission’ component for active traders has fallen to $0.95, the per contract price is $1.25 and the minimum cost for an options transaction is $8.20. This minimum applies to their “Young Investor” pricing too.
Another important pricing differentiator at National Bank Direct Brokerage is their commission-free ETF buying and selling program. All Canadian and US ETFs are eligible to be traded commission-free as long as at least 100 units are traded in the transaction and individuals sign up for electronic document delivery.
An important consideration for potential NBDB clients is the inactivity/administration fees. Individuals with less than $20,000 in assets by May 31st of a given year will be subject to $100 in administration fees unless they: generate at least 5 commission generating trades in a year, have an InvestCube account, are an active investor, are a young investor (aged 18-30) or are enrolled in one of their offers for professionals.
The product offering from NBDB includes registered and non-registered accounts in which clients can trade Canadian and US stocks, ETFs, mutual funds, bonds and options.
The registered accounts offered include tax-free savings accounts (TFSAs), registered retirement savings plans (RRSPs) and registered education savings plans (RESPs). At the time of writing, there are also plans to roll out US dollar versions of the registered accounts. For the moment, these registered accounts can accept deposits in USD and clients can trade (and hold) USD equities, however withdrawals from the account will result in a currency conversion back into CAD.
As with other brokerages, margin cannot be used with registered accounts. Options trading in registered accounts is limited to buying and selling options as well as covered calls.
In the non-registered investment account category, clients can trade with cash and margin accounts. For clients who would like to “short sell” stocks, a margin account with short selling is required.
For active traders, NBDB offers Market Q (this is from Interactive Data the same company that owns eSignal) to track stocks and to conduct advanced technical analysis. As it is built off a similar platform to eSignal, the charting and sophistication of data available is robust. While order entry is possible from within Market Q, monitoring open positions as well as win/loss and other trading stats is not.
The data feed for Market Q ranges from Level I (real time information on most major North American markets) to Level IV (market depth on TSX-V). Pricing for data for Market Q depends on a client’s activity level. Pricing for Level I quotes starts at $39/month and can go to $148/month for Level 4, for individuals trading between 0-9 trades per month. For those clients trading 100+ trades per month, Market Q data fees are waived. More information about data pricing and trading level discounts is available on the NBDB website.
Finally, National Bank Direct Brokerage also offers a mobile website which can be accessed by most mobile browsers. The essential functionality required for placing an order, managing funds and tracking order status can be conducted via the mobile website. Click the following link for our in-depth review of National Bank Direct Brokerage’s mobile website.
Reviews & Ratings
|Review||What Review Measures||Score||Date of Ranking|
|Dalbar Canada Review||Client Service||Above Average
|Globe and Mail Review||Overall Impression||Letter Grade “B-”
Letter Grade “C+”
Letter Grade “C+”
9th out of 12
Letter Grade “C”
8th out of 12
Letter Grade “B-”
7th out of 12
Letter Grade “C”
|JD Power Review||Investor Satisfaction||8th out of 8
6th out of 8
9th out of 10
1st out of 10
1st out of 10
2nd out of 7
1st out of 11
|MoneySense||Top Pick – ETFs
Top Pick – ETFs
Runner Up – ETFs