# setting up brokerage, TFSA, questrade



## the-royal-mail (Dec 11, 2009)

I learned of a claymore etf that I am considering taking a run at for my 2011 TFSA. I've done some research reading on this and have read that setting up a brokerage account through questrade is what I need to buy this etf. However a few points are unclear.

If I simply move a chunk of $5K on 1-1-11 into the account from my existing bank account (via online banking), designate as TFSA and buy the etf in there, what fees would there be? I don't intend to be active with this. I just want the account so I can buy this low-cost etf and shelter it in my tfsa money and would only convert it to cash at a later date. I don't expect more than 1-2 transactions per year. Would inactivity and ECN fees eat me alive? Any other risks with this approach? Is there a better approach?

What would be the best way for do this?


----------



## jason26 (Apr 6, 2009)

ECN fees would be minor. I'm not exactly sure what they would be but your trade will still likely be under $10.

Also, I have not seen any inactivity feeds on my Questrade TFSA. It sat idle (with some holdings) from last December to a few days ago. I maybe do 5-10 trades a year and have had no problems with my TFSA over at Questrade.

Setup of my Questrade account was also pretty simple. My TDW account was a little simpler, but I already banked at TD.


----------



## m3s (Apr 3, 2010)

For $5000 it should only be $4.95 + maybe 10 cents in ECN if you do a market order. You should use limit orders anyways as I do so that you don't pass the $5000 cost (if the price jumps the instant you place a market order) and also to save a few pennies in ECN fees

There are no such inactivity fees

Get a referral and then you don't even pay $4.95


----------



## Jungle (Feb 17, 2010)

As with most registered accouts, I think there is a fee to close it. However, with no inactivity, you can just leave a small amount of change in it. As for trading commissions in a TFSA, you won't find much cheaper then Questrade. Good to see you are moving up from 1.5% interest savings accounts..


----------



## the-royal-mail (Dec 11, 2009)

Thanks to all who replied - you are all wonderful. I've done my best to try and understand how things work. I am definitely not there yet and still have tons to learn. I really do appreciate the interactive nature of this forum. I like being able to offer advice as well as to take it. I may not respond to every post, but I do listen and read everything.

So yeah, I started the questrade application tonight. Since my 09 and 10 TFSAs are indeed sitting in cash (available on a moment's notice) but 11 is right around the corner, I'll take some of the advice I've received here and use my 11 allocation to learn about how things work a little more. I mean what can go wrong with a CDN bond fund ladder?? Famous last words. Touch wood.


----------



## Jungle (Feb 17, 2010)

the-royal-mail said:


> Thanks to all who replied - you are all wonderful. I've done my best to try and understand how things work. I am definitely not there yet and still have tons to learn. I really do appreciate the interactive nature of this forum. I like being able to offer advice as well as to take it. I may not respond to every post, but I do listen and read everything.
> 
> So yeah, I started the questrade application tonight. Since my 09 and 10 TFSAs are indeed sitting in cash (available on a moment's notice) but 11 is right around the corner, I'll take some of the advice I've received here and use my 11 allocation to learn about how things work a little more. I mean what can go wrong with a CDN bond fund ladder?? Famous last words. Touch wood.


Just so you know, Questrade requires a minimum $1000k deposit to activate the account. Also, watch you don't go over your 2010 TFSA contribution room. If you are withdrawing from your current TFSA, you're best to do it late December then just re-contribute early Jan.


----------



## KaeJS (Sep 28, 2010)

Like others have said, ECN fees won't make or break anything. 

What you need to make sure you do is have the money transferred into your Questrade account from your bank BEFORE 1-1-11 if this date is important to you (i.e. Because you want in asap, which would be smart, and I'm sure that's your intention)

In my experience, it can take a few days, even an entire business week sometimes for my money to leave TD Bank and show up in my Questrade account. Just a pre-warn. 

Make sure you transfer everything over from your bank to Questrade by Dec 20th. That way you can be sure the money will be there, ready to purchase on 1-1-11. 

Questrade is excellent. 
Hope all goes well with your fund.


----------



## Four Pillars (Apr 5, 2009)

Royal - Don't worry, you will be fine.

You are starting a bit early if you are planning to make your 2011 TFSA contribution to the Questrade account. Maybe wait until Nov?


----------



## Four Pillars (Apr 5, 2009)

KaeJS said:


> Like others have said, ECN fees won't make or break anything.
> 
> What you need to make sure you do is have the money transferred into your Questrade account from your bank BEFORE 1-1-11 if this date is important to you (i.e. Because you want in asap, which would be smart, and I'm sure that's your intention)
> 
> ...



If he transfers the money to the TFSA then it will be a 2010 contribution which will put in over the limit. He can't move the money until 2011.

I agree - Questrade is quite excellent.


----------



## KaeJS (Sep 28, 2010)

Four Pillars said:


> If he transfers the money to the TFSA then it will be a 2010 contribution which will put in over the limit. He can't move the money until 2011.


What I'm trying to say is that you can hold money in Questrade without buying into your TFSA. This is what he needs to do so that he can buy the Claymore ETF on 1-1-11. 

He needs only to transfer the money from his bank to Questrade. It will not directly count as a TFSA contribution until he buys the fund on 1-1-11.


----------



## m3s (Apr 3, 2010)

the-royal-mail said:


> So yeah, I started the questrade application tonight. Since my 09 and 10 TFSAs are indeed sitting in cash (available on a moment's notice) but 11 is right around the corner, I'll take some of the advice I've received here and use my 11 allocation to learn about how things work a little more. I mean what can go wrong with a CDN bond fund ladder?? Famous last words. Touch wood.


You might have started it too early because as Jungle mentioned you will have to deposit $1000 to complete the process and that would put you over the TFSA 2010 limit

You can see your new acct status in myQuestrade. I had an incomplete non-reg for quite awhile there but it has disappeared now


----------



## the-royal-mail (Dec 11, 2009)

Actually I did not complete the reg process at this time. I only intend to complete it after the new year, when I can deposit the full $4900 in one shot to complete the process. Apparently I get $50 in free trades and I don't want that to make it look like I went over the $5K.

I guess my only concerns would be that they don't agitate and pester me to "complete" the registration for the next 3 months as well as that once the money is in the account and working for me, that they don't keep bugging me to do this or that. I want to take a passive approach to some of these investments. I'll watch the performance but I hope that questrade doesn't keep sending me "inactive account" notifications etc.

I guess I can only wait and see. Thanks for all the comments.


----------



## the-royal-mail (Dec 11, 2009)

KaeJS said:


> What I'm trying to say is that you can hold money in Questrade without buying into your TFSA. This is what he needs to do so that he can buy the Claymore ETF on 1-1-11.
> 
> He needs only to transfer the money from his bank to Questrade. It will not directly count as a TFSA contribution until he buys the fund on 1-1-11.


Just need to reply to this specific point. So far in the reg process, I have established the account as a TFSA right from the get-go. So wouldn't any money that goes in there count towards the calendar contribution?

I should also mention that I actually don't presently have the $ for the 2011 TFSA. It will take me until Christmas to finish saving for that. I just thought I would save a little time and setup the account in advance as these things can sometimes take a few weeks. And that's fine, I am very patient with this whole process.


----------



## Four Pillars (Apr 5, 2009)

KaeJS said:


> What I'm trying to say is that you can hold money in Questrade without buying into your TFSA. This is what he needs to do so that he can buy the Claymore ETF on 1-1-11.
> 
> He needs only to transfer the money from his bank to Questrade. It will not directly count as a TFSA contribution until he buys the fund on 1-1-11.


I understand what you are saying, but it's just not true. If you set up a TFSA account and put money into it - that money is a contribution. It doesn't matter when you use the money to buy a stock or whatever.

You can set up an open/non-registered account and put the money there until Jan 1, but it hardly seems worth it. This is what ING does when they ask for "pre-contributions".


----------



## Berubeland (Sep 6, 2009)

I found the questrade application for TFSA to be soooo much easier than ITrade and... I was already a client of ITrade.

I would have thought that since they already had my RRSP that it would be easier but no way. I had to start all over with a form I had to mail which then got lost.


----------



## cardhu (May 26, 2009)

TRM said:


> I only intend to complete it after the new year, when I can deposit the full $4900 in one shot to complete the process. Apparently I get $50 in free trades and I don't want that to make it look like I went over the $5K.


Assuming that the first increment of indexing will not occur in 2011 (I don’t expect it until 2012), the additional contribution room for 2011 will be $5000 ... therefore, you can contribute $5000 without making it look like you went over the limit. 



> Just need to reply to this specific point. So far in the reg process, I have established the account as a TFSA right from the get-go. So wouldn't any money that goes in there count towards the calendar contribution?


YES ... what KaeJS appears to be referring to is opening an additional non-registered account solely for the purpose of temporarily holding cash ... all of which sounds like much effort for little reward ... particularly since you don't yet have the cash anyway.


----------



## m3s (Apr 3, 2010)

Yea once the cash goes into that TFSA acct it is considered a TFSA contribution even though you haven't bought the ETF

Questrade will probably pester a bit until you complete the application but they never pester you afterwards to make trades


----------



## the-royal-mail (Dec 11, 2009)

Thanks cardhu and everyone else for the additional comments. I feel I've learned so much and have so much more to learn!

>the first increment of indexing will not occur in 2011 (I don’t expect it until 2012)

What does this refer to?

>YES ... what KaeJS appears to be referring to is opening an additional non-registered account solely for the purpose of temporarily holding cash ... all of which sounds like much effort for little reward ... particularly since you don't yet have the cash anyway. 

Understood. I think there is a certain amount of benefit to the idea. It always takes a lot of time and running around to set up accounts like this. Lots of details have to be addressed, sending in forms etc etc before you're ready to rock and roll. If I had the money (I'm using it instead to pay off a new car I had to buy before I got tier 2 established) now I would probably do just that, so that on Jan 1 I can do a simple transfer from one account to the next (as I did last year via online banking with my own bank) while I'm still in my jammies and not have to wait for this or that.


----------



## BETTYVEE (Dec 23, 2009)

*uncanny*

Royal you took a page right out of my book hehe. I just started the process of opening a questrade tfsa but unlike you i have no idea where to start buying..

now i was gonna do an in-kind transfer of my maxed tfsa which questrade actually told me would not count as an overcontribution. Am i being naive in believing them? It might be safer to wait and just open up the account come december, cash out some of my tfsa and then come jan open up the questrade tfsa..no?


----------



## andrewf (Mar 1, 2010)

"What does this refer to?"

The TFSA contribution amount of $5000 is indexed, and rounded to the nearest increment of $500. So in a few years the limit will rise to $5500. Theoretically, it should be in year three or four of the program, then up to $6000 about five years later.


----------



## the-royal-mail (Dec 11, 2009)

Welcome to the thread, betty, the more the merrier!

IMO, they are correct. Transfers of TFSA's between institutions should be routine as they got burned a few months ago when people didn't understand the difference between transfers and withdrawing from one and depositing in another. I see no reason why you need to wait, it will just be a question of whether or not the timing will work out for you. Questrade wants $1000 as part of the account setup process. That is a bit of a wildcard as adding that to your TFSA could be an overcontribution. Are you maxed out for 2010? Need to consider order of operations here.


----------



## the-royal-mail (Dec 11, 2009)

Is this what you are referring to re the index?

http://www.cra-arc.gc.ca/tx/rgstrd/tfsa-celi/bt-eng.html


----------



## BETTYVEE (Dec 23, 2009)

my 2010 is maxed out, half of 2011 is ready and im working on having it all by end of december..


----------



## m3s (Apr 3, 2010)

BETTYVEE said:


> It might be safer to wait and just open up the account come december, cash out some of my tfsa and then come jan open up the questrade tfsa..no?


That is what I did last year - cashed out in Dec and deposited the max in Jan

Questrade is correct you can transfer in kind but the losing brokerage will likely drag their feet and charge a fee for leaving


----------



## andrewf (Mar 1, 2010)

the-royal-mail said:


> Is this what you are referring to re the index?
> 
> http://www.cra-arc.gc.ca/tx/rgstrd/tfsa-celi/bt-eng.html


Yup.


----------



## KaeJS (Sep 28, 2010)

Four Pillars said:


> If you set up a TFSA account and put money into it - that money is a contribution. It doesn't matter when you use the money to buy a stock or whatever.
> 
> You can set up an open/non-registered account and put the money there until Jan 1, but it hardly seems worth it. This is what ING does when they ask for "pre-contributions".


Sorry guys, I misunderstood. I thought Royal already had the money ready to go and I didn't realize that a TFSA account was solely separate from a holdings account.

I had always thought the money was in a "holding/chequing" type account in cash until you purchased (or chose to just save) your TFSA contribution.

I apologize for the misinformation


----------



## the-royal-mail (Dec 11, 2009)

I did some google work on questrade and found quite a bit of dirt. So I am not sure at the moment. I have until the end of the year to make a final decision, but the customer service issues I read about are scary to me. Decisions, decisions.


----------



## Jayde (Oct 4, 2010)

the-royal-mail said:


> I did some google work on questrade and found quite a bit of dirt. So I am not sure at the moment. I have until the end of the year to make a final decision, but the customer service issues I read about are scary to me. Decisions, decisions.


I have both a TFSA and RRSP account with Questrade.

It depends how actively involved with your money you are. Questrade is definitely geared more towards trading than investing. If you think that you're going to need any help in placing your trades, Questrade is not for you. Their customer service is average on a good day.

On the other hand if you are more self-sufficient and make a lot of trades, the low commissions make it worthwhile to put up with the customer service shortcomings.

My biggest peeve with them is that you have to go to a separate website (Penson Financial) to access your investment history. 

For my needs they're adequate though.


----------



## m3s (Apr 3, 2010)

Jayde said:


> Questrade is definitely geared more towards trading than investing. If you think that you're going to need any help in placing your trades, Questrade is not for you. Their customer service is average on a good day.


Not sure what you mean investing vs trading but I think $30 trades vs $5 in a TFSA-size account is a substantial difference. I would say Questrade is good for those of us who make a few trades per month.

I've had no issue with their customer service when I was confused, and I don't think you should be trading if you can't figure it out without better service

There is a lot of dirt when you google them, but you should look at the dates. A lot of the complaints are also people who never traded before, wondering how the bought on margin etc


----------



## Jungle (Feb 17, 2010)

Questrade is fine. You can search anything and find people complaining about something. Their on-line chat and support email is great. Within a minute or so, you get CS on-line and email is responded to fast (within the next business day).


----------



## the-royal-mail (Dec 11, 2009)

That's fine but there is a difference between simply answering questions and providing solutions to the problems raised by clients. The issues that concern me deal with this. Why should a manager have to be involved with escalations to resolve what seem like minor procedural issues? I dunno guys. It's just a feeling.

BTW FP, I thought you were a bigger fan of td e-series. Your last couple of posts seem supportive to questrade. Have you converted from one to the other?


----------



## Four Pillars (Apr 5, 2009)

the-royal-mail said:


> BTW FP, I thought you were a bigger fan of td e-series. Your last couple of posts seem supportive to questrade. Have you converted from one to the other?


I'm a big fan of both, because they are both low cost solutions.

However, e-series and Questrade are two different animals.


----------



## Jayde (Oct 4, 2010)

mode3sour said:


> *Not sure what you mean investing vs trading *but I think $30 trades vs $5 in a TFSA-size account is a substantial difference. I would say Questrade is good for those of us who make a few trades per month.
> 
> I've had no issue with their customer service when I was confused, and I don't think you should be trading if you can't figure it out without better service
> 
> There is a lot of dirt when you google them, but you should look at the dates. A lot of the complaints are also people who never traded before, wondering how the bought on margin etc


My definition is that investing is long term - buy and hold for capital growth. Trading is short term plays - in addition to stocks, it likely involves options, futures strategies and the like.

Sweeping generalization here - it's my experience that investors are less educated about the markets and placing trades and generally require more assistance from their brokers. 

I agree with your comments about the complaints that turn up in Google. However, the few experiences I did have with them when I first signed up were less than helpful. Although to be fair I haven't used any customer service features on Questrade in a couple of years, so they have quite probably improved since then.

Bottom line: Overall I'm satisfied with them, despite my bad customer service experiences.


----------

