# Direct Investing: RBC vs TD vs Questrade, which one is better?



## cdnvato (Sep 25, 2020)

About me: I'm starting to dip my toes into investing. I'm looking to get onto the TD e series and I read that direct investing is the way to go with these. However, as I'm looking into the different options, I'm not sure where to go, especially because the fees somewhat vary with these three. I don't plan on trading much (at least for now), the most I will do is rebalance the funds when needed.

Ultimately I'd like to go with the one that's the least of a hassle. 

Any first hand users of these services out there?


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## Beaver101 (Nov 14, 2011)

^ Starting simplicity (and least hassle DIY) tells me that if you're interested in getting into TD e-series funds, then brokerage at TD is the way to go. Later on, you can also add other commission-based investments such as stocks, ETFs, etc to your TD brokerage account(s). 

As for holding TD e-series funds, I'm not certain that you would actually need a brokerage account for that so others can chime in on this.... are those auto D series funds? or are there A series (which you hold at the bank level (non brokerage)) like at RBC. 

Sorry, no experience with Questrade other than it may be a day-trader's favourite brokerage.


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## AltaRed (Jun 8, 2009)

For the novice investor, it is likely best to open a DIY discount brokerage account with the brokerage associated with your primary bank....to allow for seamless transfers and everything on one account page. However, depending on how much money you will have to put into the account, consider minimum account fees as well to avoid quarterly administrative charges. Some DIY discount brokerages still have minimum account sizes, e.g. $15k, to avoid administrative charges.

I believe TD e-series mutual funds can be bought at any DIY brokerage now, not just TD, but be sure to ask first....if you are set on starting with TD e-series mutual funds (a good way to start by the way with monthly or quarterly contributions).

Added: The joy of Questrade is the commission free purchase of ETFs, avoiding the ~$10 commission fee in most brokerages for most/all ETFs. Commissions add up if one is making small purchases or is a frequent trader and that makes Questrade popular. However, low cost also comes with constraints in other areas so beware of limitations before jumping in. For example, I don't know if one can buy TD e-series mutual funds at Questrade if that is important to you.


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## scorpion_ca (Nov 3, 2014)

I have TDDI and Questrade accounts. I bought e-series previously but now I only buy ETFs. If I were you, I would open an account with Questrade and buy all in one ETF such XGRO, XBAL or XEQT based on your risk tolerance.

Why would you buy e-series when you have an option to buy commission free ETF with lower MER?


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## cdnvato (Sep 25, 2020)

scorpion_ca said:


> I have TDDI and Questrade accounts. I bought e-series previously but now I only buy ETFs. If I were you, I would open an account with Questrade and buy all in one ETF such XGRO, XBAL or XEQT based on your risk tolerance.
> 
> Why would you buy e-series when you have an option to buy commission free ETF with lower MER?


I've actually been reading more on this, and it seems like ETFs are the more viable options (it was also included on the model portfolios provided by Canadian Couch Potato). As someone whose had both, what would you say are other advantages of having ETFs over the e series (aside from lower MER and free commission?) 

Also how long were you with the e series before you decided to switch to ETFs? Is it a question of time or $?

(I only ask because I'm still pretty new to all this but I'm also thinking what's best in the long run!)


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## AltaRed (Jun 8, 2009)

If commissions to make ETF purchases are $10, then I would suggest a minimum $1000 purchase to keep commission 1% or less. That will be made up in no time with market appreciation. For myself personally, I would use $5k as the minimum which makes the commission 0.2% and thus about as annoying as a gnat on an elephant's butt.

Keeping MER cost low is a key investing advantage but I would not get too fussed over 0.5% or so for a short time period of a few years. Longer term, it would be best to keep it less than 0.25%, such as that charged by Vanguard/Blackrock/BMO asset allocation ETFs...and if you really want to get pedantic about it, many investors want to keep MER <0.1% (10 bp). I would not be fussed about MERs up until about 0.25% and then it would gnaw at me.


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## STech (Jun 7, 2016)

I really like the TDDI interface so I've stuck with them long term. I hardly even make 10 trades a year, so $100 in commissions isn't a big deal. If I was a day trader, I'd look at the cheaper alternatives.


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## m3s (Apr 3, 2010)

cdnvato said:


> Also how long were you with the e series before you decided to switch to ETFs? Is it a question of time or $?
> 
> (I only ask because I'm still pretty new to all this but I'm also thinking what's best in the long run!)


People used to switch from e series to ETF once they were buying enough to not mind the $5 fee. With free ETF purchases at Questrade you might as well skip the e series. There is still a $5 fee to sell ETFs on Questrade

With Questrade you can also do a "pro gamer move" like Norbit's gambit to buy USD ETFs in an RRSP to avoid US withholding tax on your US allocation.


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## Spudd (Oct 11, 2011)

FYI, there's no commission to buy e-series in a discount brokerage account. Also, you don't need a brokerage account to buy them, you can use a TD mutual funds account that you would set up at the bank.


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## AltaRed (Jun 8, 2009)

Spudd said:


> FYI, there's no commission to buy e-series in a discount brokerage account. Also, you don't need a brokerage account to buy them, you can use a TD mutual funds account that you would set up at the bank.


True about no commissions, but I thought to get an e-series mutual fund account , it had to be done online, i.e. the bank's equivalent are not e-series funds?

If the OP is going to get a discount brokerage account at some point, might as well start now, no? Subject to there being no account minimums being charged of course


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## GreatLaker (Mar 23, 2014)

Canadian Couch Potato reported some time ago that eSeries funds are no longer available from TD Canada Trust (bank). They are available from TD Direct at no fee to buy or sell, and other discount brokers can choose to sell them too. It's in the comments here:








TD e-Series Funds: The Next Generation | Canadian Couch Potato


For almost 20 years, the TD e-Series mutual funds have been one of the cheapest and easiest ways to build a Couch Potato portfolio. For most of that time they’ve gone about their business without much…



canadiancouchpotato.com





IMO may as well just buy an asset allocation ETF unless you buy small amounts so ETF commissions become significant.


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## Beaver101 (Nov 14, 2011)

^ Not that it matters to the OP (not a complete newbee) considering her reply in post #5 (experience with both e-series funds & ETFs). 

But how many versions of "TD e-series" fund or post #9 (Spudd's at the bank level) versus post #11 (Great Laker's at the discount brokage level)? Spudd's version seem to be "all TD e-series" whereas Great Laker's from CouchPotato talks about the "index" e-series version. This is a 101 e-series lesson for me.


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## GreatLaker (Mar 23, 2014)

Beaver101 said:


> ^ Not that it matters to the OP (not a complete newbee) considering her reply in post #5 (experience with both e-series funds & ETFs).
> 
> But how many versions of "TD e-series" fund or post #9 (Spudd's at the bank level) versus post #11 (Great Laker's at the discount brokage level)? Spudd's version seem to be "all TD e-series" whereas Great Laker's from CouchPotato talks about the "index" e-series version.


There is one version of e-Series and they are all index mutual funds. They used to be available from TD Canada Trust in a special e-Series mutual fund account, and also in TDDI discount broker accounts. Last year TD stopped offering them through TD Canada Trust and started offering them through other discount brokers (at the broker's discretion).

TD Asset Management Inc offers the same index mutual funds in different series: eSeries (available only at discount brokers), F Series (available only through fee-based advisors) and Investor Series (what you would get if you walked into a TDCT bank branch and asked for index mutual funds ). You can see the different fund codes and MERs for the Canadian Index Fund here by selecting the series in the drop-down box:





TDAM | Mutual Fund Card


Mutual Fund Card




www.td.com





You can see a comparison of eSeries vs. Investor Series MERs here:





Management Expense Ratios (MER) | TD e-Series Funds


The difference between a management expense ratio for an online investment versus a regular investment can result in savings. See the difference!




www.tdcanadatrust.com







> This is a 101 e-series lesson for me.


Basically people that want to buy TD index mutual funds in a discount broker account should use eSeries. People that have a fee-based advisor should use F-Series. Investors that want to buy index funds at a TDCT bank branch get Investor Series. They are the same underlying funds available in different sales channels, at different MERs. This alphabet soup of different fees is a reason I generally avoid mutual funds.


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## Spudd (Oct 11, 2011)

Sorry, my bad, I wasn't aware they stopped offering it through the bank.


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## scorpion_ca (Nov 3, 2014)

cdnvato said:


> I've actually been reading more on this, and it seems like ETFs are the more viable options (it was also included on the model portfolios provided by Canadian Couch Potato). As someone whose had both, what would you say are other advantages of having ETFs over the e series (aside from lower MER and free commission?)
> 
> Also how long were you with the e series before you decided to switch to ETFs? Is it a question of time or $?
> 
> (I only ask because I'm still pretty new to all this but I'm also thinking what's best in the long run!)


One notable advantage is that you can use the limit price to buy ETFs whereas you don't know what you would be paying for e-series or other mutual funds since mutual funds determine the price at the end of the business day. 

It was dollar figure for me to switch to ETF. However, we didn't not have many ETFs in 2013. I am glad we have so many ETFs nowadays.


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## Beaver101 (Nov 14, 2011)

GreatLaker said:


> There is one version of e-Series and they are all index mutual funds. They used to be available from TD Canada Trust in a special e-Series mutual fund account, and also in TDDI discount broker accounts. Last year TD stopped offering them through TD Canada Trust and started offering them through other discount brokers (at the broker's discretion).
> ...


 ... ah, I see. This set up is similar to the other big banks, only different names. Thanks for the detailed explanation!


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## simarbhalla (Oct 22, 2020)

cdnvato said:


> About me: I'm starting to dip my toes into investing. I'm looking to get onto the TD e series and I read that direct investing is the way to go with these. However, as I'm looking into the different options, I'm not sure where to go, especially because the fees somewhat vary with these three. I don't plan on trading much (at least for now), the most I will do is rebalance the funds when needed.
> 
> Ultimately I'd like to go with the one that's the least of a hassle.
> 
> Any first hand users of these services out there?


I have a direct investment account with RBC and it is better than TD. I don't have any experience with Questrade, thus no comments.


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## AltaRed (Jun 8, 2009)

Without context, that comment is pretty useless. It depends on what aspects of investing are most important. The 2 advantages I know RBC DI has are:
1) can buy GICs online. TD keeps promising that but has not yet delivered
2) Norbert's Gambit is a breeze at RBC DI (and BMO IL which uses the same concept)

The most popular DIY discount brokerage (number of clients) has been TDDI, perhaps because they were out of the gate first with a good offering.

Questrade appears to have the fastest growth in new clients, perhaps because of low fees, and no commission to purchase ETFs. It, however, is privately owned and I'd thus never go over the $1M in CIPF coverage with Questrade.

The OP should be checking out the Rob Carrick annual comparisons, and the MoneySense ones for pluses and minuses.


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## agent99 (Sep 11, 2013)

I have used RBC DI and BMO Investorline. - I had both at one time, but found BMO to be far better. Maybe slightly more expensive for trades ($9.95) and unlike the bargain basement sites, you have to pay to trade ETFs. Don't trade much, so no problem. Easy to buy GICs, bonds and exchange currency. 

Just happened to get this from MDJ today. Seems like new customers can get a substantial bonus if they switch to BMOIL.









BMO Investorline Review 2023


Is BMO Investorline Safe and Trusted? In a word, YES. As one of Canada’s oldest and most trusted companies (founded in 1817) the Bank of Montreal is as safe, trusted, and legit as you can get. InvestorLine has been around longer than the internet - BMO introduced self-directed trading way back...




milliondollarjourney.com





You don't have to go through MDJ to get the rebate: InvestorLine Self-Directed: Easy Online Trading Platform – BMO


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## AltaRed (Jun 8, 2009)

The MDJ review of BMO IL is focused on stocks. Another plus is online purchases of GICs One big downside is bond purchases....their commissions are atrocious.


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## dotnet_nerd (Jul 1, 2009)

scorpion_ca said:


> Why would you buy e-series when you have an option to buy commission free ETF with lower MER?


Well, one reason would be to eliminate cash drag. With TD e-series you can buy an exact dollar amount and have dividends reinvested.

I use Questrade for my ETF's. I hold VTI in my RRSP. VTI trades around $184 so I have a lot of US cash kicking around until I can buy an integral # of shares.


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## agent99 (Sep 11, 2013)

AltaRed said:


> One big downside is bond purchases....their commissions are atrocious.


I think we discussed this once before and some of us compared the actual yield of specific bonds after commissions. We found that the end result was about the same. The bond prices were higher at brokerages that showed lower commissions. This might not always be true, but it was when we checked.

BMOIL (and I hope others) do now show the commission on bond transactions. The commissions are high. But I have not heard of any brokerage offering discount commissions for retail investors. When buying a bond we know what the yield is after all costs. If we don't like it, we don't have to buy.


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## MrBlackhill (Jun 10, 2020)

AltaRed said:


> Questrade appears to have the fastest growth in new clients, perhaps because of low fees, and no commission to purchase ETFs. It, however, is privately owned and I'd thus never go over the $1M in CIPF coverage with Questrade.


What would make you nervous over $1M?

Questrade is regulated by IIROC like the big banks and yes it's member of CIPF. It's insured up to $10M.





__





Investor Protection | What We Stand For | Questrade


See the safety steps Questrade takes to protect your money, your account, and your personal information.




www.questrade.com


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## AltaRed (Jun 8, 2009)

CIPF is only $1M. I don't trust any private insurance above that amount. It is relatively meaningless. Regulation by IIROC doesn't protect one against internal fraud. By the time IIROC sees it, the principals are long gone.


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## MrBlackhill (Jun 10, 2020)

AltaRed said:


> CIPF is only $1M. I don't trust any private insurance above that amount. It is relatively meaningless. Regulation by IIROC doesn't protect one against internal fraud. By the time IIROC sees it, the principals are long gone.


I'll take a note about this. I'll see once I get near that amount, haha. I'll ask Questrade about the $10M they claim vs the $1M mentioned in the CIPF.


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## AltaRed (Jun 8, 2009)

MrBlackhill said:


> I'll take a note about this. I'll see once I get near that amount, haha. I'll ask Questrade about the $10M they claim vs the $1M mentioned in the CIPF.


They say private insurance to take it to $10M. If they can't provide full disclosure right on their website, I move on. Not knocking Questrade in and of itself, but as a black box owned privately with no disclosures necessary, I'd stick to the $1M. There are too many other viable options out there to take unnecessary risks.


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