Questrade is an online discount brokerage where you can buy and sell financial securities on the stock market.
They offer one of the most robust trading platforms at the lowest cost to Canadian investors. This Questrade review shares all the benefits (and drawbacks) of this discount broker.
What is Questrade?
Questrade is Canada’s most affordable discount brokerage account. They stand out from the competition by offering both registered and unregistered accounts, low trading commissions, and a very user-friendly platform.
Questrade is an independent Canadian brokerage that is not owned by any other bank or financial institution. Because they’re not tied to one of the Big 5 Banks, some people are wary about whether or not Questrade is legitimate. They are! You can confirm Questrade is a recognized discount broker by looking them up on aretheyregistered.ca.
Questrade is one of the most affordable discount brokers available, but they do charge fees. Here are some of the costs you can expect:
Trading commissions. It is free to purchase ETFs on Questrade, but you will pay trading commissions to sell them. You’ll also pay trading commissions to buy and sell individual stocks and options. The fees range from $4.95 to $9.95 depending on the type of security and amount you are trading. Fees go up to $19.95 if you’re trading precious metals.
Questrade inactivity fee. Questrade used to charge account inactivity fees, but they’ve done away with them. Yay!
Electronic Communication Network (ECN) fees. ECN fees are charged whenever you remove liquidity from the market. These are usually only a fraction of a cent, so you will not notice them unless you are moving large number of shares around. There are ways to reduce, but not entirely eliminate ECN fees and because they are so small most investors should ignore them entirely.
Currency exchange fees. Questrade charges currency exchange fees if you are trading in currency other than that of your home country. Depending on the currency you’re trading in, you’ll pay a few percentage points of the trade value for the conversion of CAD to other dollars.
Interest on margin borrowing. If you’re trading on a margin, you’ll pay interest on the amount you borrow. The interest you’re charged on money you borrow in your Questrade margin account ranging from prime + 3.50% to prime + 8.35%.
Questrade Canada Review Pros & Cons
Questrade definitely stands out amongst competitors! But that doesn’t mean they’re flawless. Here’s what you need to know about investing with Questrade.
- get $50 in free trades when you open an account
- only need $1,000 to open an account
- both registered (RRSP, TFSA, RESP) and unregistered accounts available
- low trading commissions on stocks
- free to buy ETFs
- trade in both USD and CAD
- both self-directed investing or managed portfolios available
- works directly with Passiv to automate investing
- options trading and margin accounts available
- works with Passiv for an automated investing experience
- $24.95 quarterly inactivity fee for accounts less than $5,000
- technical support slightly slower than competitors
- need to understand the stock market to manage your portfolio
- Questwealth portfolios underperform compared to Wealthsimple
- Questrade is 100% online so need to fund the account by eTransfers
Questrade risk review
Questrade is no more or less risky than trading securities on another brokerage. Questrade is merely a platform, not an investment.
Your risk when investing comes from the choice of stocks and ETFs you put in your portfolio, not the brokerage you use.
Opening an account with Questrade Canada
You need at least $1,000 to open an account with Questrade. You will have the choice to open either registered accounts like the TFSA, RRSP, RESP, or LIRA, or an unregistered trading account. Questrade offers both self-directed accounts and robo-advisor portfolios depending on your needs and experience as an investor.
Best features of Questrade
Opening an account with Questrade is easy and affordable. You can do it entirely online, and it only takes $1,000 to start your account. Many other brokerages require $5,000 or even $10,000 to get started, so Questrade is a better choice for most young people who know they should be investing but haven’t saved up a ton of money yet to begin.
Low-cost stock trading and free ETF purchases
The best features of Questrade are low trading commissions. Buying and selling stocks on Questrade is only about $5 or $6 depending on the trade and ETFs are free to buy!
If you’re a new trader, or just an average person that’s not moving tens of thousands of dollars around each trade, keeping your fees low is super important. Questrades low fees let me grow my portfolio more quickly because I can buy small amounts of stock or only a few ETFs at a time.
Connect with Passiv for an automated investing experience
One of the coolest features of Questrade that sets them apart from other brokerages is they sync seamlessly with Passiv, an app that can automate your self-directed portfolio.
If you know passive investing is the best way to maximize your investment returns but you still want to be in charge of the asset allocations, Passiv is the answer. This app lets you choose how you want to invest, and then it will adjust your portfolio for you even as security prices change. You can read our full Passiv review here.
Questrade TFSA, RRSP, RESP, and more
You can have multiple investing accounts with Questrade. They offer all registered accounts such as the Tax-Free Savings Account (TFSA), Registered Retirement Savings Plan (RRSP), and Registered Education Savings Plan (RESP). They also offer unregistered accounts for trading, as well as margin accounts.
You cannot trade on a margin in the RRSP, TFSA, or RESP, but Questrade does let you leverage the power of your TFSA for margin trading.
Questrade margin account
A margin account is a brokerage account that lets you make trades using borrowed money. While this is a risky investment strategy, it can help magnify gains for experienced traders.
For example, say there is a stock you want to buy for because you think it will go up in price. You have $1,000 but you borrow $4,000 in your margin account to purchase $5,000 of the stock. Your investment rapidly grows to $6,000! You sell the security, return the borrowed $4,000, and keep $2,000 for yourself. Even though you only had $1,000 of your own money to start with, you now have earned an additional $1,000!
Note that margin trading typically has higher fees, and you pay interest on the amount you borrow to trade.
Questrade TFSA Margin Power
One of the best features of Questrade is you can leverage the cash in your Questrade TFSA to trade in your margin account. This is called Questrade Margin Power.
Margin Power gives you more margin buying power in your margin account, based on the cash in your TFSA. You do not need to transfer any money or securities from your TFSA to your margin account. Instead, Margin Power simply reads the balance of your Questrade TFSA and gives you trading power in your margin account based on that balance.
Margin power is like a form of overdraft protection. It lets Questrade know you’re good for the trades you make in your margin account because you have money set aside in your TFSA. If you make any withdrawals from your TFSA, your Questrade margin power will decrease. Continue to contribute to your TFSA, and your Questrade margin power will go up!
Your TFSA must be with Questrade in order to use Margin Power. It will not connect to a TFSA at another bank or brokerage.
Questrade Review: portfolio performance tracking and tools
Questrade will track your portfolio performance for you, whether you choose the Portfolio IQ option or you invest totally on your own. They’ll give you a summary of your accounts on your dashboard, as well as more detailed analysis of your performance over time in each portfolio.
The website and the trading platform are very easy to navigate. You can readily pull reports to show your contribution history, dividends earned from stocks, and more. Your T5 forms for unregistered will be available in your Questrade account at tax time, too.
When it comes to buying and selling securities, it is very easy to look them up and view key statistics before you make a purchase. Questrade will also let you create a watch list, where you can place stocks you have your eye on but aren’t ready to purchase yet!
Questrade trading tools
One of the things Questrade does really well is their trading dashboard. You can easily add stocks to your watch list, view historical performance charts, and do multiple analyses on securities.
You can even get access to current news articles and analyst recommendations directly in Questrade’s trading platform. In other words, you can do ALL your research as well as your trading all in one place!
Questrade offers the most functionality in terms of security research and analyses, which is why I love it so much. Everything I need is all in one place!
Drawbacks & Downsides of Questrade
It’s not a real Questrade review if we don’t also review the downsides. Questrade’s low fees come from its low overhead costs.
One of the things that is often criticized with Questrade, though I have had no personal issues with, is their support team. They are often flagged as taking a few minutes longer than industry competitors. I personally have found it very easy to connect with someone from Questrade on the phone and have my issues resolved.
The Questwealth portfolios
Questrade also offers managed portfolios, if you don’t want to manage your portfolio yourself. Their Questwealth portfolios are their robo-advisor arm that will automatically invest for you.
There are 5 different Questwealth portfolios, based on your risk tolerance and investment goals. You’ll answer a few questions to determine which is best for you, and they’ll take care of the rest.
While it’s nice that Questrade offers a robo-advising service, it underperforms compared to competitors. The Wealthsimple portfolios still beat Questwealth by a long shot, and are a better choice for investors that want a hands-off investing experience.
You can get $50 in free trades by signing up for Questrade through this link.
How to make the most out of Questrade
My Questrade review can be summarized simply: Questrade is an awesome low-commission trading brokerage that is perfect for your investments. This is a great option for people that want to manage their own portfolios or have a robo-advisor do it for them.
Questrade is an awesome place to keep long-term investments like your retirement nest egg or your child’s college fund. This is where you want to keep money you’re using to grow your lifetime wealth. Questrade, and investing in the stock market in general, is not the right place for your emergency fund or other cash you may need to spend on something else.
I hope you enjoy Questrade as much as I do! Leave a comment below letting me know what you’re investing for, and if there are any other financial reviews you’d like me to do next!