Andrew Goldman has been writing for over 20 years and investing for the past 10 years. He currently writes about personal finance and investing for Wealthsimple. Andrew's past work has been published in The New York Times Magazine, Bloomberg Businessweek, New York Magazine and Wired. Television appearances include NBC's Today show as well as Fox News. Andrew holds a Bachelor of Arts (English) from the University of Texas. He and his wife Robin live in Westport, Connecticut with their two boys and a Bedlington terrier. In his spare time, he hosts “The Originals" podcast.
Curious about how much it will cost to invest with TD Direct? Stock trading fees? How about options? Account minimums? We’ve assembled it all here for you.
History of TD Bank
TD Direct Investing is the online brokerage for TD Bank, the largest Canadian bank by assets. If you’ve lived in Canada anytime since 1955, when Bank of Toronto and Dominion Banks joined forces and renamed their collective 499 Canadian branches the Toronto Dominion Bank, you know TD and their pine tree colored signs.
TD was the very first online broker in Canada when it introduced WebBroker, Canada’s first online brokerage platform in 1996. Then in 2011, TD introduced their mobile app to allow trading on smartphones.When it comes to retirement planning, the sooner you start, the more time your money has to grow. In just five minutes we’ll build a personalized investment portfolio to help meet your retirement goals — get started.
Brokerages and money
Nobody decides to open a discount brokerage because they have some altruistic desire to unite people they don’t know with their dream stocks—and TD is no exception. There’s a lot of money to be made in being able to move people’s money to places they can’t move it on their own. As programmer Patrick McKenzie points out, about half of any given brokerages’ revenue comes from net interest, the money brokerages make loaning the cash you leave uninvested in your account to others who are willing to pay them a heck of lot more interest than they’re paying you. You have very little control over this practice. Trading fees are another big revenue stream—one that you actually do have some control over. If fees seem too high, you’re free to vote with your feet and find a cheaper broker.
In the last couple decades, so-called fintech companies have disrupted the financial sector, using technology to find ways to offer services that were formerly dominated by big banks much cheaper without any notable diminution in quality (and in a lot of cases, as you can read in this fintech primer, they’ve actually been able to improve user experiences.)
One such fintech company, Toronto-based Wealthsimple, on whose website you currently find yourself, introduced Weathsimple Trade in August, 2018, an all mobile trading platform that offers unlimited no-commission stock and ETF trading with no minimum brokerage account balances. If paying nothing, zero, zilch, bupkis, to trade a stock or ETF seems more appealing that paying ten dollars for the same one as you would with TD Direct, you may choose to investigate further.
TD Direct Investing Fees Explained
TD stock trading fees
Brokerages by and large, TD Direct included, asses a flat per-trade commission fee for any stock purchase, big or small. TD Direct’s standard rate is $9.99 per trade for any Canadian or US stock. It stands to reason that the larger the stock purchase, the less the fee represents as a percentage of the entire purchase. Buy $100 worth of stock, and 10% of your entire purchase is eaten up by the trading fee. Buy $10,000 worth of stock, and that $9.99 only represents about 0.1% of your purchase.
TD Direct, like most other online brokerages, offer a per-trade discount for those who conduct a lot of trades. While many offer breaks based on monthly activity, TD Direct counts trades by quarter, and offers a flat $7.00 trades for those who make more than 150 trades per quarter. (Since quarters have on average 63 trading days, this amounts to more than two trades per day.)
Of the discount brokerage arms of the so-called “Big 5” Canadian banks, TD Direct’s fees are on the high side, but not quite the highest. That dubious distinction belongs to BMO Investorline. BMO Investorline’s flat free pricing is a hair cheaper ($9.95 per trade, versus TD Direct’s $9.99) but BMO offers no discount for frequent traders. CIBC Investor’s Edge offers the cheapest trades of the Big 5, with standard equity trades priced at $6.95 and $4.95 for those who make more than 150 trades per quarter.
In order to give you a sense of the pricing landscape, below is a chart showing the big five bank and their online brokerage platforms, and their trading prices, arranged alphabetically.
|Bank||Affiliated brokerage name||Standard per trade fee on U.S. or Canadian equities||Discounted per trade fee||Number of trades required to qualify for discounted trading||Balance required to avoid account inactivity/maintenance fees||Account inactivity/maintenance fee||Sources cited|
|Bank of Montreal (BMO)||BMO InvestorLine||$9.95||N/A||N/A||$15,000||$25 per quarter||https://www.bmoinvestorline.com/selfDirected/pdfs/SDFeeSchedule_E.pdf|
|Canadian Imperial Bank of Commerce (CIBC)||CIBC Investor's Edge||$6.95||$4.95||150 trades per quarter||$10,000||$100 per year||https://www.onlinebrokerage.cibc.com/obr/FeesCommissions_Brochure_Oct2016.pdf|
|RBC Royal Bank||RBC Direct Investing||$9.95||$6.95||150 trades per quarter||$15,000||$25 per quarter||https://www.rbcdirectinvesting.com/pdf/commission-fees-July-2-English.pdf|
|Scotiabank||Scotia iTrade||$9.99||$4.99||150 trades per quarter||$25,000||$100 per year||https://www.scotiaitrade.com/content/dam/scotiabank/itrade/files/en/SIT_FeeSched.pdf|
|TD Bank||TD Direct Investing||$9.99||$7||150 trades per quarter||$15,000||$25 per quarter||https://www.td.com/ca/document/PDF/forms/521778.pdf|
Option trading fees
TD Direct’s options trading fees are pretty much the same as their stock trading fees, plus $1.25 per contract. So their basic flat rate is $9.99 per trade plus 1.25 per contract, or $7.00 per trade, plus $1.25 per contract for active traders (those who execute 150 or more trades per quarter.)
Mutual fund and ETF trading fees
TD Direct charges no commission to buy, sell or switch mutual funds and ETFs, though trading fees may be the least of your concerns since mutual funds frequently assess considerable management fees and sales charges, called “loads.”This article will help explain the various fees associated with mutual funds.
There is one scenario in which TD Direct will charge a commission to buy, sell or switch mutual funds—if you hold one for less than a month. According to TD Direct, “funds held for less than 30 days are subject to a short-term redemption fee of 1% of redemption value or $45 (whichever is greater) in addition to any fee(s) the mutual fund company itself may charge.“
Telephone brokerage fees
Human brokers are lovely but cost a lot more to hire than computers. Like other brokerages, TD Direct will gladly execute stock trades over the phone but will charge a premium for the service. The minimum price you’ll pay for any trade is $43.00, but large trades will cost more, since TD Direct assesses a per trade commission of up to $.06 per share. Options are a cheaper at $35.00 per trade, but TD Direct will add $1.50-$3.50 per contract, depending on option value.
Nobody likes to say goodbye and brokerages often make parting ways pricey for the consumer. TD Direct assesses a $125 withdrawal fee if you empty your account, though this fee won’t apply to RESPs, TFSA, RRIFs and RDSPs, accounts that are by design born to be emptied. Transferring to another brokerage is even pricier; TD Direct will assess a $75 fee.
List of other TD Direct fees
Like any other brokerage, TD Direct is legally required to disclose all of their fees, and if fee pamphlets excite you, we’re not going to kink shame you. Feel free to peruse their Commission and Fee Schedule. But here are some of the highlights.
Gold bullion: $25.00 USD per trade, plus .20-.20−.60 per ounce commission, depending on current gold price
Silver bullion: $25.00 USD per trade, plus .01-.01−.02 per ounce commission, depending on current silver price
Fixed income investments (O.T.C Bonds, U.S. Bonds and other fixed income securities): $40.00 per purchase plus a $1.00-$1.50 commission per $1,000 depending on bond par value
Outgoing wire payments: $30 per transfer up to $10,000, $50 per transfer for $10,000-$50,000, $80 for any transfer exceeding $50,000
Incoming wire payments: $17.50 per transfer for Canadian and foreign transfers; $17.50 USD for U.S. wire transfers
Alternatives to TD Direct Investing
There’s more than one way to skin a cat, and if you’d prefer to leave the cat skinning to someone with a stronger stomach and instead spend your time trading stocks and ETFs, there’s plenty of different ways to do that too.
Any fee will provide a natural drag on investing returns, so if you aim to reduce, or even eliminate your fees, you may choose to take a look at Wealthsimple Trade, a free app that allows Canadians to trade stocks and ETFs with absolutely no commission and no minimum brokerage balances.