Every year, advancements in mobile technology are placing the stock market at the fingertips of Canadian investors. In fact, it’s never been easier to invest on your own. One of the best ways to get started is by opening a discount brokerage account. These do-it-yourself trading accounts provide investors with access to thousands of investments, from individual stocks and bonds to mutual funds and ETFs, even precious metals. And in most cases, they do so at a very low cost.
While there is no shortage of discount brokers to choose from, we’re dedicating this space to review an offering from one of Canada’s big banks. Scotia iTrade is owned by Scotiabank, who, way back in 2008, bought Etrade’s Canadian portfolio, before folding it into the Scotia platform.
Scotia iTrade Trading Fees
Standard Scotia iTrade pricing tends to lean towards the higher end, though it is very much in line with the other big bank brokerages. Stock trades begin at $9.99, while active traders making at least 150 trades in a calendar quarter can qualify for $4.99 trades. There are no fees to purchase mutual funds online, however, if you place your trade with a telephone representative, you’ll pay a whopping $65 every time. Options trading is $9.99 + $1.25 per contract, and $4.99 + $1.25 per contract for active traders.
Scotia iTrade ETF Pricing
These days, a few online brokers boast of no-commission ETF purchases, the most notable being Questrade. On their website, Scotia iTrade makes a similar claim, so I decided to check it out. It is true, you can purchase no-fee ETFs with iTrade, but unfortunately, the selection is limited to approximately 50 ETFs, while many top ETFs are excluded from the list. Questrade, by comparison, offers thousands of ETFs without commissions, as does Wealthsimple Trade.
Scotia iTrade Account Pricing
If you have a registered account (RRSP, RIF, LIRA, LIF), you’ll pay an annual fee of $100 per account for the privilege. To avoid the fee, you’ll need to maintain a minimum balance (cumulative across all accounts) of $25,000 and execute at least 12 commissionable trades per year.
If you don’t yet have a sizeable balance, this should be of some concern, as high account fees can take a big bite out of your overall returns. There are no quarterly or annual fees on TFSA accounts, but RESP accounts with an aggregate balance below $15,000 will cost you $25 per year.
Opening a Scotia iTrade Account
According to Scotia iTrade, you can open an account online, by phone, or in person, although more complex accounts, such as RESPs, sole proprietorships, charities etc, cannot be opened through digital means. To open your account, you’ll need your SIN number handy, as well as proper identification. And if you’re planning to transfer funds into your iTrade account from another financial institution, you’ll want to have your recent investment statements handy.
Introductory Offer for New Scotia iTrade Clients
For 2020, Scotia iTrade is offering cash, and preferred pricing, or free trades to new clients. If you open a new account using their promo code by February 29, 2020, and fund it by March 31, 2020, you can receive up to $1500 cash, as well as $6.99 trades, or you can receive up to 500 free trades. To maximize the cash offer, you would need to fund the account with $1MM, but there are several tiers in which you can receive lesser amounts of cash. For full details on this offer, visit Scotia iTrade. I should point out that MapleMoney has no affiliation with Scotia iTrade or this promotional offer.
The Scotia iTrade Practice Account
One thing I like about iTrade is the ability to open a practice account, which lets you build your trading skills without having to use your own money. It’s a great way to get comfortable with DIY investing before taking the plunge. When you open your practice account, you’ll receive a fictional portfolio of $100,000 CAD, and $100,000 USD. You’ll have access to many of the regular features of the Scotia iTrade platform, such as trading tools, and market research. Another nice feature, you can hit the reset button on your account anytime. Wouldn’t that be nice in real life?
Scotia iTrade Platform
Scotia iTrade boasts a fairly robust trading platform, with extensive market research tools, and trading functionality. In fact, they recently placed 3rd in Surviscors Online Brokerage Review. The Scotia iTrade Flightdesk platform offers real-time streaming quotes for active traders, as well as up to date news and portfolio values.
With Flightdesk, you’ll also receive real-time notifications as soon as trades have been completed, and the application view is fully customizable. When it comes to customer support, iTrade does feature live online chat functionality, while telephone representatives are available 6 days per week.
Who Is Scotia iTrade Best Suited For?
Scotia iTrade is best suited for experienced, active traders who prefer the stability of dealing with a major Canadian bank. Simply put, you need to be an active trader with a substantial account balance to save on fees with iTrade, and avoid the hefty annual account fees. Experienced traders will also be able to benefit from Scotia iTrade’s advanced trading platform, with all of its bells and whistles. Beginner investors without high account balances must settle for the $9.99 trading fee to buy and sell stock, not to mention the $100 charge for registered accounts. If you only have ten or fifteen thousand to invest, that’s sure to put a dent in your portfolio.
For beginners, my advice would be to look elsewhere, to a broker like Questrade, or the recently launched Wealthsimple Trade. Both of these brokerages have a much lower fee structure for regular investors. If you’re looking for a big bank alternative, TD DIrect Investing might be a good choice. MoneySense ranked them #3 overall for 2019, on the strength of their trading platform and top-notch market research tools. And while their trading fees are similar to Scotia iTrade, at $15,000 their registered account minimum balances are lower.
