Author Topic: Canadians: TD Bank - Direct Investing Question..  (Read 2682 times)

kfire20

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Canadians: TD Bank - Direct Investing Question..
« on: December 27, 2015, 06:40:15 AM »
I'm with TD, should I open a direct investing account with them to stash there or do you have another suggestion?
If so, what are the fees?

Obviously looking for low/no fee investing method.

sparkshooter

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Re: Canadians: TD Bank - Direct Investing Question..
« Reply #1 on: December 27, 2015, 08:58:22 AM »
TD Direct Investing is a solid, easy choice choice for implementing a couch potato/mustachian investing plan. I use them personally but have no affiliation.

They charge 9.95 (or 9.99???) per trade. This is pretty standard in Canada among discount brokerages offered by the big banks. The reason my SO and I went with TD Direct Investing, however, was their e-Series index mutual funds. Here in Canada, we don't have access to Vanguard mutual funds, and when I was setting up my account about a year ago, TD's e-series funds had the lowest MER's (fees) and a reasonably wide selection (Canada, US, international, bond, etc.). You can only purchase the e-series funds from a TD direct investing account.

I had a somewhat complicated account setup process. My SO and I are both US citizens (Canadian permanent residents), we have investments in both USD and CAD, and I wanted to have trading authorization for all accounts, including my SO's registered accounts that can only be in his name. Despite this complexity, the accounts were set up without too many complications. A lot of the setup is done over the phone (24 hour), and I actually found that to work very well. Limited/no wait times, and the people who picked up the phone actually knew what they were talking about.

It was relatively straightforward to setup automated money transfers from my chequing account to my unregistered and registered investment accounts. It was also straightforward to set up automatic investments.

Other fees I am aware of: If you don't have $25k in your RRSP, you'll theoretically be charge an annual $100 fee. I don't have close to $25k in my RRSP (haven't earned the contribution room in Canada yet...most of my earnings were in the US). However, I've had success two years in a row now having this fee waived with a simple phone call. This may have worked because the overall balance in my non-RRSP accounts is relatively high, or it may be easy for anyone to get the fee waived.

If you are looking to trade more actively and use ETFs instead of mutual funds, going with a lower cost brokerage like Questrade or Interactive Brokers may make sense. But then you'll lose out on the lower MER mutual funds.

kfire20

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Re: Canadians: TD Bank - Direct Investing Question..
« Reply #2 on: December 27, 2015, 09:36:44 AM »

TD Direct Investing is a solid, easy choice choice for implementing a couch potato/mustachian investing plan. TD's e-series funds had the lowest MER's (fees) and a reasonably wide selection (Canada, US, international, bond, etc.). You can only purchase the e-series funds from a TD direct investing account.

1. unregistered and registered investment accounts.

2. If you don't have $25k in your RRSP, you'll theoretically be charge an annual $100 fee. 


Thanks you SS this is exactly the advice I was looking for. Two things.

1. if you have a few minutes please clarify unregistered and registered accounts and what/why they are and how they are used with trading.
2. Currently my RRSP is with another investment firm, should I plan on transferring it to TD? And if so, why? (Something to do with number 1 perhaps)

KMMK

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Re: Canadians: TD Bank - Direct Investing Question..
« Reply #3 on: December 27, 2015, 10:01:55 AM »
I would use TD. I'm not a regular client but also signed up specifically for the e-series - it's really easy to use. I could get a bit lower fees with Questrade but not worth the hassle. And yes, I'd transfer other RRSPs depending on the MER for those.

sparkshooter

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Re: Canadians: TD Bank - Direct Investing Question..
« Reply #4 on: December 27, 2015, 12:47:31 PM »

1. if you have a few minutes please clarify unregistered and registered accounts and what/why they are and how they are used with trading.
2. Currently my RRSP is with another investment firm, should I plan on transferring it to TD? And if so, why? (Something to do with number 1 perhaps)

A "registered account" is the generic term used for any account that is "registered" with the government and has some sort of tax advantage. The common ones would be a RRSP, a TFSA, and a RESP. An "unregistered" account is another way of describing an account with no tax advantage (i.e. a "cash" account, although this is misleading since it's not like it's holding cash).

As far as whether or not you should transfer your RRSP - the answer is probably yes, but it will be some paperwork and a hassle. You'll want to figure out what fees you are currently paying on your investments at the brokerage where you are at and then compare to what you'd be paying at TD.

General information about the logistics of transfering is here: http://boomerandecho.com/breaking-isnt-hard-transferring-your-rrsp/. The brokerage currently holding your RRSP may charge you a fee to transfer the RRSP, typically around $100.

Some other thoughts that may be relevant: 1) You can have your RRSP funds in multiple places, split across institutions. All that matters is the total amount you contribute each year. For instance, because of the way my SO's RRSP is set up at work, we have to use the workplace provider (Sunlife) to hold some RRSP funds. We also contribute additional money to his RRSP at TD. Then, once a year, we can transfer money from the Sunlife RRSP (which has higher fees) to the TD RRSP (which has lower fees). Sunlife allows this transfer once a year free of charge.
« Last Edit: December 27, 2015, 12:55:48 PM by sparkshooter »

kfire20

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Re: Canadians: TD Bank - Direct Investing
« Reply #5 on: December 27, 2015, 02:48:00 PM »
1. if you have a few minutes please clarify unregistered and registered accounts and what/why they are and how they are used with trading.
2. Currently my RRSP is with another investment firm, should I plan on transferring it to TD? And if so, why? (Something to do with number 1 perhaps)

 TFSA


With regards to a tax free savings account. I have yet to open one. Would it be to my advantage, tax-year wise, to open one this coming week before year's end to take advantage of this calendar year and next April's tax return?

Thank you very much for all your suggestions! @ss @kmmk

Stasher

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Re: Canadians: TD Bank - Direct Investing
« Reply #6 on: December 27, 2015, 03:07:04 PM »

With regards to a tax free savings account. I have yet to open one. Would it be to my advantage, tax-year wise, to open one this coming week before year's end to take advantage of this calendar year and next April's tax return?


The TFSA is funded with after tax funds so there is no year to year advantage or repercussions on your federal taxation. The only thing that changes each calendar year is that you are allowed $5500 extra contribution room (was $10K last year but the new Liberal govt dropped back down) All unused TFSA contribution room is carried forward.

rae

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Re: Canadians: TD Bank - Direct Investing Question..
« Reply #7 on: December 27, 2015, 08:04:57 PM »


Other fees I am aware of: If you don't have $25k in your RRSP, you'll theoretically be charge an annual $100 fee. I don't have close to $25k in my RRSP (haven't earned the contribution room in Canada yet...most of my earnings were in the US). However, I've had success two years in a row now having this fee waived with a simple phone call. This may have worked because the overall balance in my non-RRSP accounts is relatively high, or it may be easy for anyone to get the fee waived.


I also like TD Direct Investing and their e-series. If you are looking to open up a TFSA, there is no $100 annual fee.