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Canadian Online Discount Broker – National Bank Direct Brokerage

Canadian Discount Brokerage - National Bank Direct Brokerage

Contact Information

Phone: 1-800-363-3511

Email: directbrokerage@nbc.ca

Website:www.nbdb.ca

Headquarters:

1100 University Street 7th floor
Montréal, Québec H3B 2G7

Customer Service Hours of Operation:
Mon to Fri 8 a.m. to 8 p.m. ET

National Bank Direct Brokerage – Review of Pricing

(updated Feb 28/14)

Over the course of 2013, National Bank Direct Brokerage made a number of upgrades to its websites (mobile and main website), pricing and customer experience. In addition to the upgrades to its site, they were also the recipients of the J.D. Power Award for Investor Satisfaction for Canadian discount brokerages.

As with other bank-owned discount brokerages, National Bank Direct Brokerage (NBDB) offers the convenience of branch services as well as being able to manage other personal financial products with National Bank via the back end.

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).  Unfortunately for clients, there are no US dollar versions of the registered accounts available so it is important to account for foreign exchange conversion costs when buying and selling stocks in US dollars. 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.

Now that NBDB has updated their standard commission pricing, how much a trade commission costs with NBDB depends on the activity level of the client.  The standard equity trade commission at National Bank Direct Brokerage is now $9.95 for all clients regardless of account balance.  For active traders (defined as those who trade at least 30 times per quarter) commission rates range between $6.95 per equity trade and $9.95 per trade.  What active traders pay depends on the price of the share, with shares at $2.00 or less being charged 0.05% of the value of the transaction (to a maximum of $9.95/trade) and shares of $2.01 or more being charged at $0.01/share (to a maximum of $9.95/trade).

An important consideration for potential NBDB clients is the inactivity/administration fees. At the end of 2013, NBDB revised their administrative fees such that individuals with at least $20,000 in combined assets by May 31st of a given year or who make at least 5 commission-generating transactions (e.g. stock, ETF or options trading) between June 1st and May 31st can have their inactivity fees waived.  For those who do not meet these criteria, a fee of $100 is charged.

The Bottom Line

With their recent price adjustment, National Bank Direct Brokerage is on par with other bank-owned discount brokerages in terms of standard commission pricing on equity and options pricing. While NBDB offers preferred pricing for active traders and the threshold to qualify for active status is low, trade commissions can still range from $6.95 to $9.95 per trade.   In terms of additional fees, even though there are no minimums to open or maintain an account, there are fees associated with balances in registered accounts (like TFSAs, RESPs and RRSPs) and non-registered accounts that are below a combined value of $20,000.  In addition, currency conversion fees levied when trading US dollar listed securities should be factored into the cost of trading through NBDB.

Account Types OfferedFunding Requirements and FeesRegistered Account Types and Fees
TFSAMinimum Opening BalanceNot RequiredTFSAAnnual Charge$100 per year (if account is <$20 000 or if <5 commission generating transactions done between June 1st & May 31st)
RRSPMinimum Account BalanceNot RequiredTransfer Out$150
RESPMinimum Balance for Best or Discounted CommissionNot RequiredWithdrawals$0
CashMinimum Commission per Equity Trade6.95US Dollar Account
Margin ShortMaximum/Standard Commission per Equity Trade9.95RRSPAnnual Charge$100 (if account is <$20 000 as of May 31st or if <5 commission generating transactions done between June 1st & May 31st)
Margin OptionsMinimum Trades per Quarter for Best Commission Rate30Transfer Out$150
CIPF MemberInactivity or Maintenance Fees$100/yearUS 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)RESPAnnual Charge$100 per year (if account is <$20 000 or if <5 commission generating transactions done between June 1st & May 31st)
Transfer Out150
US Dollar Account
Last updated: Mar. 8, 2016

National Bank Website Links:

Here are some useful links to important information on National Bank’s website.

Discount Broker Customer Survey Ratings by J.D. Power:
Link to 2013 online broker ratings by the Globe and Mail:

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3 comments

  1. IMHO, somewhat unstable trading platform. For several weeks, they had the infamous problem not being able to cancel an order (random success actually). The site is down quite often. Very outdated. When an order is filled in several segments, they don’t provide the average share cost for you… Clearly they are not interested to lead the pack, but just want to provide the very minimum and “milk the cow” from captive clients.

  2. I have verified with national bank’s brokerage branch, and as of today (February 26, 2014), keeping dividends in the US account is possible within TFSA or RRSP. Please update this information.

    • Thanks for your comment Jin. A rep from NBDB did confirm that they are working on deploying USD TFSAs and RRSPs but for the moment it is still a work in progress. According to the rep, clients can have a USD TFSA and RRSP account and they can trade in USD (including receiving dividends in USD) but for the moment if they try to withdraw from either, the funds will have to be converted into CAD. Apparently the process is 2/3 of the way there and potentially by summer 2014 things may be rolling out. Unfortunately there is no link to this on the website so those interested will have to contact an NBDB rep directly for details.