January 15, 2007

E-Trade, IB, Questrade and big-bank brokerages compared

FrugalTrader of Million Dollar Journey has done an excellent comparative review of E-Trade, Interactive Brokers, Questrade and the typical big-bank brokerage. Here is, reproduced with permission, the table summarizing the features of each brokerage:

CompanyRRSPMutual FundsMargin RateCommissionReal Time QuotesMin $ ReqMaint CostInterest on CashDRIP
E-TradeYesYesPrime + 1 = 7% See table here$9.99/trade with $50k deposit or 30 trades /quarter ($19.99 /trade otherwise)Yes (free)$50k for $9.99 trade or else $19.99 /tradeNone4.15% (only outside RRSP)Yes
IBNoNoLIB +1.5= 5.72%Min $1/USD trade. Max 0.2% of trade value ($0.005/ share)Min $2/CAD trade. Max 0.2% of trade value ($0.01/ share)Yes
$10/mo if < $30usd comm/ mo
$5k to open an account$10 USD/mo (min)LIB - 0.5 = 3.72% today on Cad$> $11.5kNo
QuestradeYesNoPrime + 1 = 7% See table here$4.95 for up to 495 shares or $9.99 for all trades.Yes (free)$2500 to open an accountNoneprime - 2.5% = 3.5% today on CAD >$10kYes
Big BankYesYesvaries$29/tradeYes (free)varies, $25k with CIBC Imperial Service RRSP$125 /year with CIBC if under min req.variesYes

January 12, 2007

Deep discount combo: Interactive Brokers account + Google free real-time quotes

The Google official blog has just announced that Google is going to offer free real-time New York Stock Exchange (NYSE) quotes. This might not seem a big deal since online discount brokerage accounts typically also offer an unlimited access to real-time quotes. However, I see one case where this makes a difference: opening an account with the deep discount broker Interactive Brokers becomes more interesting.

Interactive Brokers' trading commissions are very low: 1$US to trade 200 shares on US exchanges or 2$ to trade 200 shares on the Toronto Stock Exchange (TSX). The caveat is that IB does not offer free real-time quotes: a fee of 10$US per month is charged for access to real-time US quotes (unless more than 30$US in commissions have already been paid in that month) while a fee of 9.50$ per month is charged for real-time TSX quotes. Instead using Google's soon-to-come NYSE quotes would mean avoiding part of these fees. If Google also eventually offers free real-time NASDAQ and TSX quotes, combining Google's services with an Interactive Brokers account could prove to be a terrific combo for experienced Canadian investors.