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How to open an online brokerage account (plus the best brokers for beginners)
These online stock brokers offer a solid range of trading options and low fees.
Updated . What changed?
With an online broker account, you can get direct, round-the-clock access to a variety of stock exchanges in Canada (and around the world, depending on the brokerage you choose), so it’s not necessary to go through a professional broker. However, many online brokerages still provide access to professional assistance and free learning materials if you need help.
In this guide, we’ll compare the most beginner-friendly online brokerages in Canada and walk through the step-by-step process of opening your own trading account.
Best online stock brokers for beginners
The information below is current as of December 1, 2020.
Annual management fee: 0.5% for your first $500,000 and 0.4% for amounts over $500,000 (minimum $4.99/month, or $2.50/month for RESPs)
Account opening fee: $0
Minimum initial investment: $5,000 (no minimum investment for investments held in RESP accounts)
Investment type: Justwealth is a robo-advisor, so funds are automatically invested in 1 of 60 portfolios based on your risk tolerance, preferences and goals. Portfolios consist of Canadian and US ETFs. Funds are managed and automatically rebalanced as needed.
Monthly fee: 0.35% - 0.60%
Account opening fee: N/A
Minimum initial investment: $1,000
Investment type: CI Direct Investing (formerly WealthBar) is a robo-advisor, so funds are automatically invested based on your risk tolerance, preferences and goals. Portfolios mostly consist of Canadian ETFs with some US ETFs. Funds are managed and automatically rebalanced as needed.
Fee per trade: $9.95 + $1.25 per options contract
Account fee: $25 charged quarterly for non-registered accounts with less than $15,000. An annual fee of $100 is charged on registered accounts with less than $25,000.
Minimum initial investment: $0
Available exchanges: BMO InvestorLine Self-Directed clients have access to the TSX, NASDAQ, NYSE and other major North American exchanges
Fee per trade: $50 + commissions (Between $6.95 and $8.75) for each one-time sale. Different fees apply for swaps, credit sell outs and foreign (outside Canada and the US) depository sellouts.
Account fee: $25 per quarter (waived under certain conditions)
Minimum initial investment: $1,000
Available exchanges: TSX, TSXV, CSE, NEO, NYSE, NASDAQ, Pink Sheet and OTC
How to open a stock trading account
The exact process for opening a stock trading account varies depending on the trading platform you select. However, you’ll generally need to complete the following steps when signing up:
- Choose your broker.
Research a range of options to find the online stockbroking provider that offers all the features you want at an affordable price. Some providers also offer a choice of stock trading platforms, for example a free web-based platform for casual investors and a more complicated software package with a monthly subscription fee for experienced traders.
- Choose your membership level.
Some providers offer a choice of membership tiers, each with a different level of features and a different ongoing fee. For example, you may need to choose between a Bronze, Silver or Gold trading account.
- Provide your details.
You’ll need to provide your full name and a valid form of government-issued photo ID, as well as your email address, phone number, residential address and Social Insurance Number (SIN). if you’re already a customer of the same financial institution, you may not have to provide your ID or personal information again.
- Link your bank account.
You’ll need to supply details of the bank account which will be used to finance your trades and you may be required to deposit a minimum amount. Some stock trading platforms will also require you to open a cash management account with a specific financial institution before you can start trading.
- Submit your application.
Your application to open a stock trading account will usually be processed within 1-2 business days.
- Start trading.
Once your application has been approved you can login to your account and start trading.
How do I choose an online stock trading platform?
You’ll need to carefully consider your trading needs before deciding on the right online stock trading platform. Some of the issues to consider include:
- The fees involved. There are 2 main costs you need to consider when choosing a stock trading platform: the brokerage fee and the ongoing fee. The brokerage fee applies each time you place a trade and is usually around $5-$20, but could be higher based on the size of the transaction. Ongoing subscription fees are charged monthly and vary depending on the provider and the account features you select.
- Trading resources. From educational tutorials to research and investment advice, check what tools a platform offers to help you make informed trading decisions.
- Customer service. If you ever have a problem or need help with a trade, check to make sure you will be able to access prompt and helpful customer support.
- Trading knowledge and experience. Some online stock trading platforms are designed to suit retail investors, rather than institutional investors and traders. Other trading platforms have special features geared towards highly experienced traders, such as advanced charting tools, speedy execution of trades and live market data. These features may come at a cost, however, and may not add much value if you are a less experienced trader.
- Available markets. Some stock trading platforms only provide access to companies listed on the Toronto Stock Exchange (TSX) while others will also allow you to place trades on international markets. Some trading platforms will also provide access to other trading instruments, for example forex and contracts for difference (CFDs).
Open your own stock trading account today
It’s easier than ever to dive into stock market investing and start growing your money. There’s a growing number of brokers in Canada to choose from. The best one for you depends on the type of investment you want to make, the level of professional support you need, the fees you’re willing to pay and the flexibility you want. Check out our step-by-step guide to buying stocks online to learn more.
Frequently asked questions
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