Getting into the stock market as a Canadian doesn’t have to be scary. If you’ve done your research on what types of things you want to invest in, and understand the risks involved, then the actual process of signing up and purchasing those stocks can be fairly straightforward. The following guide covers what the possible investment fees and account types are, as well as follow-along guides on how to buy stocks in Canada online using the discount brokerage Questrade.
What is Questrade?
Questrade is an online investment brokerage based in Canada and founded back in 1999. It has a simple to use interface that attracts both beginner “newbie” investors as well as more seasoned investors. Questrade allows users to purchase stocks, ETFs, mutual funds and other products directly without going through an investment broker
Questrade account fees and commissions to buy stocks
When learning how to buy stocks online in Canada, the first question everyone has is, how much will it cost to get started. Let’s take a look at the costs for possible accounts fees and commissions on trades. Questrade provides good options to keep your costs very low
To open or close one of the basic account types is FREE. There are no ongoing account fees with Questrade unless you have under $1,000 combined equity in your account, which you would then be charged $24.95 per quarter. But if you have more then $1,000 of assets in your Questrade account, then there are zero on-going account fees.
To see more information about account fees, and fees that may apply on more advanced account types, see the Questrade account fees page.
When buying stocks in Canada online, there can be commission fees, depending on the type of transaction you make.
It costs $0.01/share (minimum $4.95 commission fee, max $9.95 commission fee) to make a stock buy or sell transaction through Questrade. You can offset your first few purchases by getting $50 in free trades when you sign up using this link.
Buying ETFs (popular low cost funds) is FREE, which makes Questrade a great options for DIY index investors. It does cost to sell ETFs though, $0.01/share (minimum $4.95 commission fee, max $9.95 commission fee).
Buying/selling mutual funds
To buy or sell mutual funds in Questrade, you will incur a $9.95 commission fee per trade.
Others fees and commissions
While stock, ETF and mutual fund transactions covers the fee’s that most beginner or amateur investors might see, there are fees for additional types of trades such as for options trading, buying and selling precious metals, and international equities. See additional information about those fees on the Questrade Commissions section of their website.
How to sign up to buy stocks and other funds (and get $50 in free trade commissions)
I’ve created an extensive guide that shows step-by-step, with screen shots, on how to sign up for a Questrade account. The guide also includes links that provide you with $50 in free trades on your new account.
The guide is aimed at beginners, and covers:
- Choosing an account type to open
- Creating a user ID
- Which personal, employment, and financial information you need to provide
- Setting up the new investment account
- How to make an initial deposit and connect Questrade with your own bank
Questrade account types
Questrade offers a variety of self-directed investing accounts that Canadians can use to buy stocks online. I won’t cover them in extensive detail, but DIY investment beginners will likely want to stick with one of the Canadian registered accounts that are offered.
Tax Free Savings Account (TFSA)
The TFSA account isn’t just a savings account, it can be an investment account where you can invest your money and avoid paying taxes on dividends and gains. A great investment options for Canadians.
Registered Retirement Savings Plan (RRSP)
Invest and save long term with an RRSP account, and get tax deductions on your yearly investment contributions.
Registered Education Savings Plan (RESP)
Setup an investment account to build for your kids educational future! While contributions to an RESP are not tax-deductible, the main benefit is to have all earnings on the investment inside the RESP and accumulate tax-free until withdrawn.
For those looking to invest outside of a registered account, individual Margin accounts are available. A margin account allows a trader to trade other financial products, such as futures and options, as well as stocks. A margin account allows a someone to borrow funds from the broker, and not need to put up the entire value of a trade. Margin accounts tend to be for more advanced investors.
How to buy stocks with Questrade
Another extensive guide that I’ve previously posted is a step-by-step overview of buying ETFs with Questrade. This guide also applies to buying stocks with a registered account. Some process, just different assets.
Follow that guide, and instead of using the ETF stock symbols, search and find the stock symbol for the specific stock that you want to buy through Questrade.
For instance, if you were looking to buy Apple stock, just search it in the top bar, and the company, as well as the stock exchange that it is on, will show up:
Follow the rest of the guide to be able to complete the purchase of any stock listed with Questrade.
When learning how to buy stocks in Canada online through Questrade, you’ll see that there are different order types that you can choose from when making your transaction. This is where some people can get a little confused so let’s go over them.
Market orders are the easiest of the transaction types, and will work for most beginners. It allows you to buy stocks at the best available price in the market at the time that your order is sent.
I use “Day” for the duration option, but here’s what all of the options mean:
- Day – order will remain active until the end of the current trading day
- GTD – Good till date – will remain active until the date you specify.
- GTC – Good till cancelled – will remain active until the order is filled or cancelled
- GTEM – Good till extended market – The order remains open for the current trading day including both pre- and post-market hours until the order is filled.
- FOK – Fill or kill – The order will fill immediately and completely, or not at all.
- IOC – Immediate or cancel – All or part of the order will fill immediately. Anything that hasn’t been filled will be cancelled.
Limit orders give you the option to specify the maximum price that you’ll pay when buying a stock. The order will stay active until your specified price is met
Limit on Open Order (LOO)
For a Limit on Open order, you specify the maximum price you want to pay for the stock. Your order is only filled if the market price at open on the following trading day is at or below the limit you set.
Limit on Close Order (LOC)
Similar to above, you specify the maximum price you’re willing to spend for the stock. Your order is only filled if the market price at close on the current trading day is at or below the limit you set.
Stop Loss Order
Not recommended for beginners. A stop order is a type of order used to buy or sell securities when the market price reaches a specified value, known as the stop price. Stop orders are generally used to limit losses or to protect profits for a security that has been sold short.
Stop Limit Order
Not recommended for beginners. A stop-limit order combines a stop order with a limit order. With this order type, you enter two price points: a stop price and a limit price. If the market value of the security reaches your stop price, it automatically creates a limit order, as long as it happens within the specified duration time.
Trailing Stop Order
Not recommended for beginners. A trailing-stop order is a type of order that triggers a market order to buy or sell a security once the market price reaches a specified percentage or dollar trailing amount that is below the peak price for sells or above the lowest price for buys.
Trailing Stop Limit Order
Not recommended for beginners. A trailing stop-limit order triggers a limit order to buy or sell a security once the market price reaches a specified dollar trailing amount that is below the peak price for sells or above the lowest price for buys.
Ready to buy stocks online
If you’ve gotten this far, and clicked through the links, you’ve now learned:
- How much it costs to invest with Questrade
- The different investment accounts you can open
- How to sign up and receive $50 in free trade credits
- How to purchase stocks through Questrade
- What different order types you can make
You’ve now learned how to buy stocks in Canada online, and are ready to start building your wealth with Questrade!