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TD Direct Investing (formerly TD Waterhouse Discount Brokerage) – Review of Pricing
(updated March 18/14)
TD Direct Investing is one of the largest discount brokerage companies in the Canadian market. They have a strong presence all across the country because of their connection with TD Canada Trust branches, which they use quite significantly for investor seminars and events.
Over the course of 2013, they have made a number of changes to their website in an attempt to make it easier for visitors to navigate the wide variety of products and services they offer. For beginner investors the amount of choices may be overwhelming. Fortunately, however, TD Direct Investing offers much the same as their peers. Clients can trade stocks, ETFs, mutual funds, and options.
Pricing has been simplified as of 2014, with the standard commission rate for all clients now being $9.99 (flat). Active traders (defined as those who trade 150 more times per quarter) benefit from $7 (flat) per trade pricing. Options pricing has also lowered for 2014 with the per contract price being $1.25 and the minimum cost reflecting either the standard or the active plan accordingly (e.g. standard users options trades are $9.99 +$1.25). There are ‘custody fees’ for individuals with balances under $15,000 however there are several ways to be exempt from these fees including placing at least 2 commission-generating trades within 6 months, subscribing to a pre-authorized investment plan of at least $100/per month or holding a registered account.
In terms of account types, TD Direct Investing offers both registered and non-registered account types. The popular registered accounts include tax-free savings accounts (TFSAs), registered retirement savings plans (RRSPs) and registered education savings plans (RESPs). For registered accounts you cannot use margin or short stocks. Options trading in registered accounts is limited to buying and selling options and writing of covered calls. Non-registered account types include cash and margin accounts, with short selling and options trading requiring approval as part of the margin account.
While one of the major criticisms of TD Direct Investing in the past has been the lack of the US dollar registered accounts, TD now has the ability for clients to use their US dollar currency money market sweep & redemption option. While it does require that clients ask for this via customer service, once it is set up transactions can be configured so that US currency exchange fees are not incurred. Unfortunately, this does not extend to dividend or interest payments. Thus it is important to note that unless this service is requested, purchases of stocks priced in US dollars from registered accounts are subject to currency exchange rates set by TD Direct Investing at the time of purchase and sale.
Overall this discount brokerage provides platforms and pricing to active traders as well as long term investors. For those considering TD Direct Investing, it is important to understand what costs are associated with their trading needs and style to determine whether this online brokerage is an ideal fit.
TD Direct Investing Website Links
Here are some useful links to important information on TD Direct Investing’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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