Interactive Brokers now offering RRSP/TFSA Accounts
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This is great news.
Especially for those that are frequent traders, who can take advantage of IB's low-fee commission structure.
Especially for those that are frequent traders, who can take advantage of IB's low-fee commission structure.
I have an unregistered account at IB. I’d transfer my registered accounts there if they linked the accounts when calculating the monthly activity fee.
As it’s currently structured $50/year for registered plus $120/year in additional activity fees is a bit too steep.
As it’s currently structured $50/year for registered plus $120/year in additional activity fees is a bit too steep.
IB has some of the best shortable inventory in the world and not sure about CAD and USD. i assume both.
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Essentially this: http://www.questrade.com/trading/services/margin_power
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I started a thread 1.5 years ago (wow time flies) about how IB Canada severed its ties with IB US. Wouldn't that make IB Canada's inventory significantly smaller?
I was considering moving my IB Canada account to Questrade for the "margin power" and new user friendly platform. IB's is probably better but I'm not a day trader
Just waiting for the dust to settle but I will help digging for facts when I can.
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and pay $12.50 a quarter plus commissions for the privilege. Other brokers provide this service free of charge plus commission free ETFs. Why so excited?
Cheaper commission. . . bu if its buy and hold and only etfs, then you are right it doesnt make sense. Unless they can sell alot on doing covered calls or whatever.
I think the introduction of RRSP and TFSA accounts were to promote their institutional side for Mutual funds and Hedge funds. Not too much competition in Canada for that.
While $50/year/account may appear a bit steep I have looked at my current annual statements. For my RRSP I am paying well over $300 per year in commissions with TD Waterhouse and I consider myself rather an investor than trader. I mean - sure, I would probably trade a bit more if it was cheaper. Look, a simple purchase of some stock plus selling covered call on that position is $9.99+$9.99+$1.25/contract with TDW. So, it is at least $21.23. I have a margin account with IB and this sort of transaction may cost somewhere around $5 or more - but would rarely reach $20. Not to mention the $43 exercise commission with TDW that kills many deals. Think about it - $21 + $43 = $64 just to exercise a very simple trade that makes you some money over 1-2 months on a covered call in one of the good scenarios. RSPs are usually relatively small - a large RRSP can be around few hundred thousands at most and TFSA - we are talking about dozens of thousands. Not talking about small number of investment gurus here 
So, transactions like this, buying few hundred shares of a company and selling the covered call to make few hundred dollars may be quite typical.
Checked the annual commissions for TFSA - same story, way over $100. And this is, again, considering that I could not do some trades in that TFSA because it was not practical.
I think that even with $50/year I may be saving money on commissions with IB. Will seriously consider to switch. Big bank's brokerage commissions are way too high.
Also I think IB will readjust their strategy for RSPs in the future. I think they are doing it not so much to make tons of money, but rather as additional benefits for existing customers. I may be wrong but personally I do see the value of keeping the investment accounts with as few firms as possible.
So, transactions like this, buying few hundred shares of a company and selling the covered call to make few hundred dollars may be quite typical.Checked the annual commissions for TFSA - same story, way over $100. And this is, again, considering that I could not do some trades in that TFSA because it was not practical.
I think that even with $50/year I may be saving money on commissions with IB. Will seriously consider to switch. Big bank's brokerage commissions are way too high.
Also I think IB will readjust their strategy for RSPs in the future. I think they are doing it not so much to make tons of money, but rather as additional benefits for existing customers. I may be wrong but personally I do see the value of keeping the investment accounts with as few firms as possible.
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congratulations to IB! a valuable by-product will start accruing to this innovative broker with the debut of its 2 registered plans.
IB will become eligible to appear among the discount broker ratings that once omitted it because it didn't offer RRSP & TFSA.
take the globe & mail broker survey, for example. This rating is widely read, so one might even say that the historic omission of IB has been a disservice to globe readers all these years.
but the globe survey weights heavily in favour of low commissions. With its ultra-low commish, it will be interesting to see how high interactive brokers will be able to power in the globe ratings, now that it satisfies all the globe's criteria for inclusion.
all clients at all brokers can't help but benefit in the end, since increased competition is good for clients across the entire sector.
IB will become eligible to appear among the discount broker ratings that once omitted it because it didn't offer RRSP & TFSA.
take the globe & mail broker survey, for example. This rating is widely read, so one might even say that the historic omission of IB has been a disservice to globe readers all these years.
but the globe survey weights heavily in favour of low commissions. With its ultra-low commish, it will be interesting to see how high interactive brokers will be able to power in the globe ratings, now that it satisfies all the globe's criteria for inclusion.
all clients at all brokers can't help but benefit in the end, since increased competition is good for clients across the entire sector.
Just explored this new account situation with IB a bit and found a little "devil in details".
They assess each account value and if you do not do transactions for $10/month, then they will charge you the rest. Thinking about a typical family with 2 non-registered accounts, 2 TFSAs and 3 RRSPs (say, two RRSPs and one spousal RRSP) - that makes total of 7 accounts. Including 5 registered ones. Even if we ignore the RSP fees (assuming they are offset by savings on commissions) you still need to do transactions for at least $70/month. They waive it for $100K + accounts, so, assuming 2-3 of these accounts are over $100K that will probably reduce the requirement to something like $40. So the "formula of savings" becomes a bit more tricky.
I feel a need to put all numbers in Excel for the past year with my broker and do the math
They assess each account value and if you do not do transactions for $10/month, then they will charge you the rest. Thinking about a typical family with 2 non-registered accounts, 2 TFSAs and 3 RRSPs (say, two RRSPs and one spousal RRSP) - that makes total of 7 accounts. Including 5 registered ones. Even if we ignore the RSP fees (assuming they are offset by savings on commissions) you still need to do transactions for at least $70/month. They waive it for $100K + accounts, so, assuming 2-3 of these accounts are over $100K that will probably reduce the requirement to something like $40. So the "formula of savings" becomes a bit more tricky.
I feel a need to put all numbers in Excel for the past year with my broker and do the math
A strength of IB is foreign investing, which is allowed in 28 countries in an RRSP or TFSA. See below:
http://www.fin.gc.ca/act/fim-imf/dse-bvd-eng.asp
I was disappointed when I found out that IB would only allow trading in Canada/USA in RRSPs/TFSAs.
http://www.fin.gc.ca/act/fim-imf/dse-bvd-eng.asp
I was disappointed when I found out that IB would only allow trading in Canada/USA in RRSPs/TFSAs.
Since Globe and Mail put out its 17th annual ranking and didn't even mention IB, I'm wondering if someone has experience using them for RRSPs/TFSAs. I've been with IB for my margin account for almost 10 years so there is a comfort level there and I like the lower fees. Our RRSPs/TFSAs are with Scotia iTrade (I liked it better when it was eTrade before Scotia took them over) and I know just how much of a pain it is to move from one broker to another.
Any one with experience on what works well and doesn't at IB with respect to RRSPs and TFSAs?
Any one with experience on what works well and doesn't at IB with respect to RRSPs and TFSAs?
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