National Bank Direct Brokerage Review
Canadian Online Brokerage Review
In August 2021, National Bank Direct Brokerage (NBDB) made an ambitious move in its pricing structure, unveiling zero-commission pricing for all Canadian and US stock and ETF trades, with no minimum required. Prior to that, they had been offering the leading rate for commissions for equity trades among Canadian bank-owned online brokerages, as well as commission-free trading for Canadian and US ETFs.
As they are a bank-owned online brokerage, National Bank Direct Brokerage offers the convenience of branch services as well as the ability to manage other National Bank financial products 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.
Pricing Fees
After several years at their previous commission rates, National Bank Direct Brokerage made a significant revision to their commission pricing structure in August 2021, making them the lowest cost bank-owned online brokerage for investors.
For all investors, there is now a $0 commission for online trades of Canadian and US stocks and ETFs, a pricing offer that has never been seen before for Canadian bank-owned online brokerages. Investors do not need to make a minimum number of trades, and there is no minimum amount per trade required to qualify for this $0 pricing.
Interestingly, for options pricing, National Bank Direct Brokerage has also removed the “commission” component. Investors now pay $0 commission plus $1.25 per option contract, with a minimum of $6.25 and a maximum of $19.95 (for transactions below $2,000).
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 trades in a year, have an InvestCube account, are a young investor (aged 18-30) or are enrolled in one of their offers for professionals.
Account Types
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.
Platform
National Bank Direct Brokerage has platforms geared towards longer term investors as well as active traders. Their standard (or “Classic”) platform is similar to most online trading platforms offered by discount brokerages.
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.National Bank Direct Brokerage Brokerage Experience
National Bank Direct Brokerage provides trading accessibility to users seeking to trade at lower income rates and allows access to cryptocurrency. National Bank Direct Brokerage has an advantage over other brokerages because it also provides full trading capability while also remaining free. This creates a great incentive for users to switch to National Bank Direct Brokerage. The lack of an app for National Bank Direct Brokerage does make the experience less suitable, but it makes up for the lack of an app by allowing users to trade in a more accessible matter.
Can I use National Bank Direct Brokerage to buy Bitcoins or other cryptocurrencies?
National Bank Direct Brokerage provides Bitcoin and Ethereum ETFs, therefore you are able to purchase cryptocurrency through National Bank Direct Brokerage. Because it is an ETF, you do not technically own the coins, but rather the ETF.
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How does National Bank Direct Brokerage compare to other Brokerages?
National Bank Direct Brokerage is progressively providing commission free trading, as well as providing a way for users to trade cryptocurrency. As a result National Bank Direct Brokerage is a very promising brokerage for the new wave of investors who may have less capital to start with or are interested in trading cryptocurrency without going through the technical steps to setup their own crypto wallet. National Bank Direct Brokerage lacks a proper brokerage trading app which is unfortunate, however their business model right now seems closely aligned to that of American Brokerages whom provide commission free trading, cryptocurrency trading and a well polished modern app. National Bank Direct Brokerage seems to be missing only one piece of that formula where as other brokerages are lacking several.
Who is National Bank Direct Brokerage Best For?
National Bank Direct Brokerage is renown for being one of the first brokerages in Canada to feature 0 fee trading. This feature has proven attractive to both young investors, and investors with less capital to start with.
Does National Bank Direct Brokerage Have an app? Full review!
Does National Bank Direct Brokerage Brokerage Have an app? Currently there is an app for banking but there does not seem to be an app specifically for trading. Therefore NBDB does not have an app for iOS or Android.
What is National Bank Direct Brokerage Fees?
Does National Bank Direct Brokerage have Equity & ETFs trading?
The trading fee for National Bank Direct Brokerage Equities & ETFs to Sell is $0 per trade. The trading fee for National Bank Direct Brokerage Equities & ETFs to Buy is also $0 per trade.
Does National Bank Direct Brokerage have options?
National Bank Direct Brokerage also provides option trading which has a trading fee of $1.25 per contract but has no commission fee.
How to switch to National Bank Direct Brokerage?
Transfer procedure
Transfer cash or investments to your NBDB brokerage account from a bank or investment account.
From a bank account
- Via eTransfer directly through NBDB trading platform.
- Via telephone by calling one of NBDB representatives at 1‑800‑363‑3511.
Are you making an initial transfer?
Call us at 1‑800‑363‑3511 to have your banking information linked to your NBDB brokerage account.
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How to switch from National Bank Direct Brokerage?
There are two ways to do this:
- You must first deposit the amount into a Cash or Margin account before transferring the funds to the external bank account.
- You can also use an “Income Sweep” to automatically transfer the funds withdrawn to the bank account which is linked to it. If you don’t hold such an account, write to NBDB via secured messaging on NBDB transactional site to request that NBDB open one for you.
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