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Credential Direct – Review of Pricing
(updated Sept. 2013)
Credential Direct may not be as recognizable name in the online discount brokerage world as some other names, however they’ve been around since 2000 and are part of Credential Financial Inc. Credential Direct offers clients the ability to trade stocks, ETFs bonds, mutual funds and options in both registered accounts and non-registered accounts
Registered accounts include tax-free savings accounts (TFSAs), registered retirement savings plans (RRSPs) and registered education savings plans (RESPs). While they do offer trading of US stocks, they will charge mandatory foreign exchange fees in both registered and non-registered accounts, so be on the lookout for your trading activity that includes stocks priced in $US. For registered accounts you cannot use margin or short stocks. Options trading in registered accounts is limited to buying and selling options – there is no writing of options allowed.
The price you pay for commissions is determined by your activity. For Credential Direct, however, there is a pretty low bar as to what they consider “active” compared with other Canadian online discount brokers. To be considered “active” and therefore qualify for the best commission rate of $9.95 per trade, you have to make 10 or more trades per quarter (and also be subscribed to their eServices).
If you are trading less than 10 trades a quarter, pricing gets a bit trickier. The price you pay for your trading commission is based on the number of shares as well as the dollar value of the whole trade. For orders of 1000 shares or less or a total trade value of $2000 or less, you can expect to pay $19. For orders of 1001 shares or more of a stock priced at $1.01 or higher, you can pay $0.02/share up to a maximum of $250 per trade – yes you read that correctly. If you place a trade of 1001 or more shares with a share price of a $1.00 or less, the amount of commission you pay is 1% of the total trade value up with a minimum charge of $19 and a maximum of $250.
There are no required minimums to open an account nor are there minimums to keep an account open. For RRSPs there is an annual charge of $50 if you have a balance less than $15 000.
The Bottom Line
Credential Direct offers a compelling pricing structure based on trading activity because they have the lowest threshold for getting the best commission rate amongst brokerages that require volume minimums for best rates. Additionally, their absence of inactivity fees or balance minimums (with the exception of RRSPs) makes this particular discount brokerage one worth considering if your trading activities are low and your investing capital is also limited.
Discount Brokerage Pricing Review Table
Credential Direct Website Links:
Here are some useful links to important information on Credential Direct’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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