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Hi. I was trying to look for a thread in regards to this but couldn't seem to find any. Last year, I put all $5k into an interest account (PC Financial), but due to lowered interest rates, was not satisfied at the end of this year with their rates for the TFSA, so decided to pull all my money out on Dec. 31. I would like to open an investing account to put all 10K (+interest) somewhere this year. I don't have 100k in any account and so probably have to pay higher fees for trading. Any suggestions for where to open a REPUTABLE TFSA account with minimal trading costs (and I'm not just talking cheapest trading possible, but cheapest trading for the least hassle)?

I would also like to do DRIPs, but have no experience in this. Do I just ask the trading account company I decide to go with?

Thanks for your time.
 

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Questrade is probably your best bet, as far as pricing goes.
A penny a share – for a commission as low as $4.95 per trade and never more than $9.95
No trade activity thresholds
No minimum balances to qualify.

As to the service you'd have to get that info from someone who uses their product, but they get good ratings generally.
As for the DRIP , as long as you own at least one share you just sign the company-specific enrolment form.
I don't use DRIPs myself, maybe someone else can give you more specific instructions.
 

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Discussion Starter #3
Questrade is probably your best bet, as far as pricing goes.
A penny a share – for a commission as low as $4.95 per trade and never more than $9.95
No trade activity thresholds
No minimum balances to qualify.

As to the service you'd have to get that info from someone who uses their product, but they get good ratings generally.
As for the DRIP , as long as you own at least one share you just sign the company-specific enrolment form.
Thanks for the quick reply Mario, but I guess I was looking for more than what I could see in the sticky at the top for choosing a broker. I had quite a few issues with Questrade including complications on even setting up my account properly. Are there other brokers out there that I can put $10k into a TFSA account and have low trading premiums? Anything special about TFSA that they may give lower premiums that people have found?

Thanks!
 

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For itrade you would need 50K (across accounts) to get 9.99 trades. I found setup easy. You would need to have about 40K in another account to get the 9.99 fee, otherwise it jumps to 19.99, which is no longer a 'discount' fee IMO.
 

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I would like to open an investing account to put all 10K (+interest)
If you are not tranferring your TFSA to other institution , how would you put interest as your limit is 10K and interest will make you cross your limit. Am I missing something here ?:confused:
 

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I'll vouch for Credential Direct if you are not planning to be an active trader. Although the trading fees are higher than some of the discount brokers ($19.99), there are no inactivity fees. Also, there is no commissions on mutual funds, and if you prefer, you can set up pre-authorized cash contributions and DRIPS for claymore/bmo etfs. (I understand from another thread that many of the other on-line brokers were refusing to set up PACCs for etfs, which is an easy and cheap way to dollar cost average. A monthly/quarterly PACC may be useful if you don't have the full amount for a TFSA as of January 1).
 

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Discussion Starter #8
If you are not tranferring your TFSA to other institution , how would you put interest as your limit is 10K and interest will make you cross your limit. Am I missing something here ?:confused:
My understanding of what I've read (unless I'm mistaken) is that ANY money withdrawn from the TFSA adds onto your contribution room for the next year. So if I build interest on $5k to say $5250 and withdraw it all, the next year I can contribute $10250 back into my TFSA.
 

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My understanding of what I've read (unless I'm mistaken) is that ANY money withdrawn from the TFSA adds onto your contribution room for the next year. So if I build interest on $5k to say $5250 and withdraw it all, the next year I can contribute $10250 back into my TFSA.
That is my understanding too.
 

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Thanks for the quick reply Mario, but I guess I was looking for more than what I could see in the sticky at the top for choosing a broker. I had quite a few issues with Questrade including complications on even setting up my account properly. Are there other brokers out there that I can put $10k into a TFSA account and have low trading premiums? Anything special about TFSA that they may give lower premiums that people have found?

Thanks!
CIBC does offer a special rate for TFSA accounts, $6.99 per trade, but it's
only until June 30/2010. If you make more than 50 trades they have a good pricing package.

With your low dollar amount and probable low trading volume it will be hard to
find low trading fees other than QT.
Also be careful, some places will hit you with low activity fees if you don't
have enough money or trade often.
If I were in your shoes I would try to work out my problems with QT, they
seem to be the best fit for your situation.

I'm currently with both CIBC and Itrade, and previously with BMO.
I've had plenty of issues with all 3 , you'll probably have some issue
no matter who you chose.
 

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For the DRIP, just tellthe broker afer the trade has been processed, that you would like to set up a synthetic drip. Then assuming that you have enough shares of the stock, and the dividend (monthly/quarterly) is enough to purchase 1 whole share, they will use the dividends to purchase whole shares only. Extra dividend $ will be kept in the account as cash as a broker will only get you whole shares.

www.dripinvesting.org for more on dripping
 

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I too am conidering Credential Direct for a TFSA account starting off with a Pre-Authorized Cash Contribution (PACC) for the Claymore CDZ ETF. If i sign up with this will I be able to avoid Credential commissions? Would others recommend Credential Direct for a TFSA brokerage account?
 

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I too am conidering Credential Direct for a TFSA account starting off with a Pre-Authorized Cash Contribution (PACC) for the Claymore CDZ ETF. If i sign up with this will I be able to avoid Credential commissions? Would others recommend Credential Direct for a TFSA brokerage account?
You would still need to pay the $19 commission to purchase at least one share cdz. However, there won't be any additional trading charges once you register for the PACC.
 

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1ab. I would like to open an investing account to put all 10K (+interest) somewhere this year. I don't have 100k in any account and so probably have to pay higher fees for trading. Any suggestions for where to open a REPUTABLE TFSA account with minimal trading costs (and I'm not just talking cheapest trading possible, but cheapest trading for the least hassle)?

2.I would also like to do DRIPs, but have no experience in this. Do I just ask the trading account company I decide to go with? Thanks for your time.
Hello dauphin:

1a. as Mario said, CIBC charges $6.95 per trade until June 30/10 for registered TFSA trading, so for example, if you just wanted to buy & hold a few stocks long term, this would be a good option, say you bought 5 stocks, it would cost you $34.75. To my knowledge, no charges or minimum balances apply to this account as remember it is considered a government account. Please someone correct me if I am wrong.

1b. CIBC's Investor's Edge Advantage Account gives you 50 trades for $395/year, ie: $7.90 per trade & if you exceed your 50 trades in the same year, additional trades are just $6.95, I believe the lowest in the industry. They do charge a $60 yearly administration fee for balances under $10K.

I'm not sure what problems Mario has had, but I bank with CIBC and I have had no problems with the system itself, except with CSR's.:rolleyes:

From their website:

"Value. Pay from $7.90 down to as low as $6.95 per online equity trade when you purchase the annual trade package. (Option trades are an additional $1.25 per contract.)

Simplicity. All fees are in Canadian dollars, even if you trade U.S. equities or options.

Convenience. No monthly or quarterly quota to meet. Just one low price for an annual package of 50 online equity and option trades executed anytime during the calendar year. (The initial fee of $395 and trade count are pro-rated depending on the date of enrolment. After you exceed your annual trade count, your price per trade drops to $6.95.)"

2. With respect to your 2nd question, there are 2 types of DRIP programs: i) the one offered directly by the companies you're purchasing stock from and ii) the one offered by your broker. The 2nd one is initially more convenient, but the 1st one is a much better option and I'll explain why, it may seem complicated at first, but it isn't.

The one offered by the broker (referred to as a synthetic drip) is only available in whole numbers, meaning that they won't reinvest partial shares for you. For example if your dividend payment for a Royal Bank stock was $30/quarter, but a Royal Bank share costs $60, the bank would not reinvest your dividend as it would not have enough funds to buy a whole share, so the $30 would just sit in your account.

But if you deal with the companies directly, then they would reinvest your partial shares. For example, using the same example above, they would buy 1/2 a Royal Bank share for you with your $30 dividend. If your quarterly dividend was $90, the broker would reinvest 1 share, ie: $60, whereas the company would reinvest your full dividends and purchase 1.5 shares on your behalf - 1 share at $60 and 1/2 share at $30 for a total of $90.

However, in order to DRIP directly with the companies you'll invest in, you must first purchase a certificate, which cost $50 + tax, but this is a one time fee, this certificate essentially transfers the shares to YOUR name & after this, you don't have to pay commissions again, so for example, if in addition to reinvesting your dividends, you wanted to buy additional Royal Bank stock 4 times in a year, at $7.95 per trade, you would be paying $31.80 a year in commissions, but with the certificate, you would bypass such costs & could continue purchasing additional stocks every year without any commission fee (of course this could be subject to change in the future I suppose, but I don't think anytime soon). Banks/brokers won't advertise this fact because obviously they don't want to miss out on commissions & want you to keep buying from them rather than directly from the company. Your broker will issue this certificate to you, but only at your request & it takes about 2 weeks to get (not the 6 weeks they will tell you over the phone).

Another advantage is that companies offer a discount on the dividend reinvestments, most are 3%, but I believe some pay as high as 5%, this discount however, does not apply to ASP or SPP purchases (additional stock purchase), which you can also do without paying commissions by buying directly from the company. For example, in addition to reinvesting my dividends, I also purchase BMO shares monthly directly though the company, if I did this through my CIBC broker, I would be paying $7.95 x 12 months for a total commission of $95.40 & if you wanted to do this with 10 of your companies, the commission would be a whopping $954, so as you can see, the $50 certificate/per company is well worth the money!.

One other advantage is the dollar cost averaging. There are disadvantages too, and that would be the real time factor.

One last thing, as you're interested in Drip's, make sure you buy a stock that pays dividends as NOT all do.

Here are some links that might be useful:

http://cdndrips.blogspot.com/
http://sites.google.com/site/cdndrips/canadiandriplist
http://dripinvesting.org/

I hope I have not confused you!

Good luck & happy investing, but remember to do your homework & be cautious. Rule of thumb: don't invest in something you don't understand.
 

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I have an orange key for ING accounts in case anyone is interested.

Basically if the key is used then the new account holder gets $25 and I get $25. Once you have an account then you can sign up for an orange key of your own.
 

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Thought I would mention Credential will syntheticaly drip CDN companies only at this time.

Don't pay 50 bucks for a certificate. Drip. Org has people buying/selling/trading certificates all the time.

You can even enter group buys which cost share price/ commision divided by number of peopl + 10 dollar courtesy fee.
 

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>> Quoting Toronto.gal:
>> CIBC's non-registered Investor's Edge
>> Advantage account gives you 50 trades for $395/year

My understanding is that because of the way this is structured, you can also write off the $395 when it comes to tax time; it can be considered an adviser fee. So it makes it even more cost effective. You need to plan on doing 50 trades in the year though. ;)
 

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Why wouldn't people use Questrade for their Tax Free Trading Account? Are there mixed reviews on them?

I am considering using Questrade for my TFSA for 2010.

I know that their webtrader screen is a bit "budget" looking, but you really can't go wrong with $4.95 trades..

Does the CIBC Trading account cost 395 for an 50 trades of unlimited value?
For example, if I was interested in buying 8000 shares of a venture stock, will I be paying the $7, or is it $7 per 1000 shares like what Questrade does?

If it's the former, then it would really be a good deal!
 

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Why wouldn't people use Questrade for their Tax Free Trading Account? Are there mixed reviews on them?

I am considering using Questrade for my TFSA for 2010.

I know that their webtrader screen is a bit "budget" looking, but you really can't go wrong with $4.95 trades..
Exactly. I've had no complications signing up and trading but I'm the kind of person who reads and learns a few things when it comes to something like trading stocks

But I can see why people are used to the expensive big banks and their gimmicks


Does the CIBC Trading account cost 395 for an 50 trades of unlimited value?
For example, if I was interested in buying 8000 shares of a venture stock, will I be paying the $7, or is it $7 per 1000 shares like what Questrade does?

If it's the former, then it would really be a good deal!
Where do you get Questrade charges $7 per 1000 shares?? It's 1 penny/share min $4.95 max $9.95

So CIBC is cheaper is you buy 700 or more shares, and trade over 50 times a year
 

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Though the $7.90 trading fee is for up to 1,000 shares, I don't think the $395 annual fee limits you to 50,000 shares a year, in fact, I think you can buy a million shares with the same price.

Not sure what other institutions do, but with the CIBC structure, you can also purchase the same stock as often as you like within the same day, but only get charged for 1 trade & the same applies to selling a stock.

I believe CIBC has the lowest trading fee of all brokerages, but it only benefits active traders, if you're not doing the 50, you can't carry over to the next year.

You can also pro-rate, so for example, if you were to join in October, you would get 10 shares for $79 or thereabouts.
 
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