Free trading is finally here, and it’s not exclusive to one particular broker. Canadian fintech, Mogo, announced its partnership with CI Investment Services Inc. to offer Canadians zero-commission trades. It is the second app and fourth financial service in Canada to take the leap. Why did they do it? To make investing more accessible to Canadians.
Why should you care? Because if you want to grow your wealth and achieve financial independence, you need to invest. But until recently, pricey trading fees have prevented too many Canadians from entering the market.
Canadian fintechs, and even some of Canada’s big banks, are bridging the gap. Let’s take a look at who offers free trading in Canada, and things to consider before you hit that buy button.
1- Wealthsimple Trade: Best Free Trading Platform for ETFs & Canadian Stocks
Wealthsimple Trade was the first investing platform in Canada to offer zero-commission trades on stocks and ETFs when it launched its trading app in 2019. It quickly planted itself in the hearts of young Canadian self-directed investors and remains the #1 trading app in Canada.
They continue to offer unlimited, free trading for Canadian-listed equities and ETFs, and there are no investment minimums.However, US-listed stocks are subject to a currency exchange fee of 1.5% if you have less than $100,000 in assets under management.
Wealthsimple began as a low-fee robo-advisor but soon evolved into one of Canada’s most prolific fintech companies. They started with cutting-edge financial technology that used state-of-the-art software to craft a diversified ETF portfolio based on your risk appetite. But they didn’t stop there.
For the more experienced, hands-on investor, they launched Wealthsimple Trade. Soon after came Wealthsimple Crypto, the first federally regulated crypto trading platform in Canada. Today, they offer Wealthsimple Cash, a very high-interest money account and Canada’s answer to Venmo, as well as Wealthsimple Tax, an easy-to-use and low-cost tax filing service.
Furthermore, Wealthsimple is on a mission to empower Canadians to take total control of their money. On their website, you’ll find extensive financial education resources that demystify all things money from investing to budgeting. They even have an extensive video series, called Investing Masterclass, that deconstructs intimidating investing principles into bite-sized, easy-to-understand pieces. Wealthsimple doesn’t just make investing accessible with free trading, they make sure you know what you’re doing before you even get started.
2- Desjardins Online Brokerage (Disnat): Best Free Trading Platform for French Canadians
Non-bank fintechs aren’t the only ones fueling change. Desjardins Group is the largest group of credit unions in Canada, which are called caisse populaires in Quebec. The Desjardins Online Brokerage, called Disnat, is the only other financial institution-owned trading platform to offer zero-commission trades on equities and ETFs.
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Currently, free trading is offered through the Disnat Classic platform, designed especially for novice investors with a user-friendly interface and easy-to-use research tools. And since this broker is Quebec-based, you can deal with them entirely in French.
While equities and ETFs are free to trade, options are technically zero commission but do cost $1.25 per contract. Most mutual funds are free to trade as well but conditions apply. If you are between the ages of 18 and 30, certain costs like inactivity and administration fees are waived if other criteria are met. However, the minimum investment amount to get started is $1,000, which can be prohibitive if you are brand new and don’t have a lot of cash on hand.
Credit unions differ from banks because they are collectively owned by their membership rather than private shareholders and are regulated at the provincial level. When you open an account with a credit union, you become part-owner and share in the profits. Historically, credit unions have been the first to implement new financial technology and initiate change.
Credit unions are often ahead of the curve. They were the first to offer Canadians debit cards, online banking, and creative lending solutions like Home Equity Lines of Credit called the HELOC. They are also committed to social change, reinvesting their profits into the local community at five times the rate of traditional banks. And they were the first to lend to women without a male co-signer, a huge leap forward in women’s rights and their financial independence.
3- Mogo Trade: Best Free Trading Platform for Climate-Conscious Investors
Finally available to investors in every province, the Mogo Trade app is live and ready to go. Best known for private lending, money management, and crypto rewards, Mogo has since pivoted to focus on its lending and investing services. The new Mogo Trade platform is mobile-only, which means you can use it on a smart device and not a traditional desktop computer.
However, that’s a small price to pay for free trading of stocks and ETFs. There are virtually no fees since Mogo does not charge any commissions, foreign exchange fees, account fees, or premium subscription fees. Instead, they make their money by earning interest on the uninvested balance in your account.
But instead of pocketing all that interest for themselves and private shareholders, Mogo uses a portion of it to plant a tree for every trade executed on their platform. If environmental sustainability is important to you, this free trading app is the only one to offer zero-carbon investing.
This article is the shortened version of an article originally published on Hardbacon.ca by Heidi Unrau under the title "Free Trading: The 5 Best Zero-Commission Brokers in Canada".
