20 Responses to "Opening Your Online Brokerage Account Primer"

  3. richardl · Edit

    Fees based on account value are an issue at times.

    My wife had a spousal rsp and a regular rsp plan, both of which we transfered to a discount broker. Although the total value was greater than $200,000, the broker tried to charge a $200 annual fee on one account because it was less than $50,000.

    They eventually backed off on the fee and merged the accounts at no cost.

    Reply
  4. Hemgi · Edit

    Hi

    I’m with Desjardins Disnat with 9.95$ commission fees per transaction without any annual cost. One of the thing I like is the capability of selling and buying US titles in the same day in my RRSP without having to pay anything for the US CAN conversion.

    My major concern right now is the cost of withdrawing money from my RRSP. My RRSP portfolio is currently build to provide me with a monthly dividend income of $800 – will probably be at $1000 when I will retired – that will be withdraw every month. With 25$ fees for each withdraw – cheaper than some other, I agree – it is a 2.5% charge! Letting the dividend there at near 0% and making a withdraw once a year is not a good option too.

    So I’ m looking for an online brokerage account that will be really designed for people who are planning to make several withdraws per year.

    Reply
    1. Mark · Edit

      Hey Hemgi, thanks for the extra information about Desjardins.

      My understanding is all RRSP withdrawals are treated equally, they are subject to withholding taxes. You may wish to consider converting some of your RRSP into a RRIF:
      https://www.myownadvisor.ca/converting-rrsp-rrif-consider/

      For some folks then, RRSP > RRIF at age 65 can be a plan: you get the pension tax credit ($2,000) and income withdrawn is eligible for pension-splitting. At age 65, minimum withdrawal = 4% from a RRIF. Essentially the first $2,000 from the RRIF is essentially tax-free thanks to the pension tax credit.

      This is considerable less than the forced withdrawal of 7.5% when the RRSP must be converted to a RRIF.

      Not sure how old you are Hemgi but a consideration.

      Reply
      1. Hemgi · Edit

        I m 54. 🙂

        Thank for the info on the RRIF, I will look at it.

        The tax rate is not a concern, everybody will be it. I’m more concern with the administrative fees associated with withdrawal of cash…. Pretty annoying.

        Reply
  7. Tawcan · Edit

    Great post. You really need to check the account fees, especially when it comes to registered accounts. It never makes sense to me that some brokers charge fees for registered accounts like RRSP and TFSA.

    Reply
    1. Mark · Edit

      I agree Tawcan and I don’t get the cash-grab on RRSP or TFSA accounts. Annoying really but banks are in the business to make money, and they do a very good job of that.

      Reply
  8. canadianbudgetbinder · Edit

    Well you certainly did give me lots to think about. I knew you’d write a post like this sooner or later. I’m the one who wants to get his feet wet. I do have plenty of room in my TFSA although I’m with an advisor at the moment. That doesn’t mean I have to use him for all of my investments. I’ll start reading some of your 101 suggestions and look into it further. When you first started out on your own what did you invest in? What mistakes did you make? How did you combat being nervous investing on your own, if you were at all?
    Thanks Mark.
    Mr.CBB

    Reply
    1. Mark · Edit

      Good, this is what this site is for Mr. CBB 🙂

      Let me know what the hesitations are and maybe I will write another post about that. When I first started out, I invested in the banks’ mutual funds. I then figured out after a few years, why don’t I just own the same stocks the big bank funds do? So, now I do.

      What mistakes did I make? Not many actually, other than paying too much for the funds, the MERs were high and I could have gotten the same and better performance in lower-cost products.

      Not nervous at all. I figured I more I read, the more I read other blogs, the more knowledge I gained.

      Thanks for your questions.
      Mark

      Reply
  9. Shawn · Edit

    Great post. I wanted to emphasize the point you made about fees, in particular the account fees. While the online brokerages are pretty upfront about their trading fees, the account fees can be a little harder to tease out – partly because we may tend to not even think of this at first. Things to consider that weren’t already mentioned:
    – What fees are associated with closing the account?
    – How often do they change (i.e. increase) their annual account fees – for those people who have to pay them?
    – Will they waive the account fee even if you don’t meet the minimum balance?

    My analogy is like when first time homeowners obtain a mortgage and only think about the rate (like the trading fees). Digging a little deeper, they will find out about the other aspects such as prepayment options, lump sum payments, etc… (similar to the account fees).

    Last thing, get a copy of the fee structure – both trading and account fees – in writing. The brokerages may have basic information on their website, but it has been my experience that this may not necessarily match their actual policies/ rules. I encountered such a situation with one of them recently when my statement indicated that “… your $100 annual fee will be deducted from your account on Sept. 12th” After a phone call I was told that this was just for RRSPs, not my TFSA.

    Reply
    1. Mark · Edit

      You’re right Shawn, the closing fees and other fees can really add up. New investors need to take these things into consideration, which is why they need to review as much as they can on each brokerage site before they make any decisions.

      If they don’t understand the terms, the conditions, the lingo, they are best to seek financial help.

      You made some good points, thanks for your comment.

      Reply

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