Interactive Brokers Canada Review 2021

Interactive Brokers Canada is a leading brokerage platform in Canada, and one of many options for self-directed investors to directly access electronically traded securities.

In my opinion, Interactive Brokers Canada offers ‘active’ traders a good deal. If you are a beginner investor or you have a moderate trading account, there are better deals available to you.

For example, Wealthsimple Trade offers no-commission trades for thousands of stocks and Exchange-Traded Funds (ETFs).

Unless you are a resident of the United States and have access to Interactive Brokers (IBKR) Lite plan, no-fee trading is not available to its Canadian customers.

This review of Interactive Brokers Canada covers its fees, accounts offered, benefits, downsides, and alternatives.

What is Interactive Brokers Canada?

Interactive Brokers Canada was launched in 2000 and has its headquarters in Montreal. Its parent company, Interactive Brokers Group, Inc. was founded in 1978 and provides its brokerage services in 135+ markets worldwide.

As of this writing, Interactive Brokers has $9 billion in equity capital and 1.07 million client accounts. Its platform also facilitates over 2 million trades per day.

The Interactive Brokers Canada trading platform is available on multiple devices including mobile and desktop.

Interactive Brokers Canada Accounts

Interactive Brokers Canada offers several account options for individuals, businesses, and institutional investors.

You can use an individual account to invest in a taxable account, margin account, or registered account such as RRSP, spousal RRSP, or TFSA.

A liquid net worth and/or income minimum applies to many of the accounts available on this platform.

For example, to open an individual cash account and trade stocks, bonds, warrants, or mutual fund, you will need to have a net worth of at least $20,000 (some waivers applicable to clients aged 18-21).

To open a regular margin account, you must have a minimum net worth of $20,000 and income of at least $40,000.

Interactive Brokers Canada Investment Products

Interactive Brokers Canada has a wide selection of securities you can choose from including:

  • Stocks: Easily trade stocks in 135 international markets.
  • ETFs: Offers trading in equity and bond ETFs on 28 exchanges.
  • Bonds: Get access to over 1 million corporate, municipal, and government fixed-income securities.
  • Options
  • Futures: Offers trading in futures contracts in 35 financial markets.
  • Mutual Funds: With more than 40,000 mutual funds available.
  • Spot Currencies: Includes 23 trading currencies such as USD, CAD, EUR, GBP, AUD, CHF, and HKD.

Accredited investors can use Interactive Brokers to participate in hedge fund investments.

Also, if you prefer someone else to manage your investments, you can check out Interactive Advisors, its robo-advisory service.

Interactive Brokers Canada Fees

Is Interactive Brokers cheap? How much does it cost to place trades on the platform?

Unlike many of its Canadian counterparts, the trading commission schedule on Interactive Brokers Canada is not straightforward. Its pricing structure also varies depending on the security you are trading.

For example, for stocks, ETFs, and warrants, you either pay a tiered rate or fixed rate.

The fixed rate is $0.01 CAD per share for CAD stocks, and $0.005 USD per share for U.S. A minimum commission of $1 applies.

So, if you purchase 500 shares of a Canadian-listed stock, you pay $5 in trading commissions.

Active traders may benefit from the tiered pricing model by paying lower fees when they place large trades. For example, the following tiered fee model applies to Canadian stocks, ETFs, and warrants:

Volume/MonthCommission/ShareMinimum Per OrderMaximum Per Order
≤ 330,000 shares$0.008 CAD$1 CAD0.5% of trade value
300,001 – 3,000,000 shares$0.005 CAD$1 CAD0.5% of trade value
3,000,001 – 20,000,000 shares$0.004 CAD$1 CAD0.5% of trade value
20,000,001 – 100,000,000 shares$0.003 CAD$1 CAD0.5% of trade value
> 100,000,000 shares$0.003 CAD$1 CAD0.5% of trade value

Note that additional exchange, clearing, and regulatory fees may apply.

Similarly, fixed and tiered fee schedules apply to options and futures. Proprietary traders of these assets may be eligible for incentive programs available through the Chicago Mercantile Exchange.

Interactive Broker Account Minimum Fee

A big downside for everyday investors who use Interactive Brokers Canada is its monthly account maintenance fee if your account balance is less than $100,000 USD.

The monthly activity fee is up to $20 USD.

A portion of this fee may be waived if you have made some commissionable trades during the month or when your account has just been opened (i.e. within the first three full calendar months after your initial account funding).

Other fees you should watch out for include:

  • Quarterly RSP maintenance fee: $12.50 CAD
  • RSP withdrawal or de-registration: $50
  • Cash withdrawal (1 free per month): $12 CAD (wire); $2 CAD (ACH/EFT/SEPA)
  • Telephone orders for closing positions: $40 CAD per order

Interactive Brokers Canada Trading Platforms

Interactive Brokers has a suite of robust trading platforms that make it easy to get started regardless of your level of experience.

Web Application: This portal is accessible on all devices using a web browser.

IBKR Mobile App: This is available for both iOS and Android devices.

Trader Workstation: Active traders can use this platform to place complete trades and track multiple products.

IBKR APIs: You use Interactive Brokers API to build custom trading applications.

All the platforms provide access to live or delayed market data and scanners. Traders can also access research, news, and technical analytical tools.

Market Data: Delayed market data is available free of charge. You can also subscribe to real-time streaming market data or a fee.

Level 1 and level 2 market data is available for the TSX Venture Market, Toronto Market, and Montreal Exchange.

Pros and Cons of Interactive Brokers Canada

Some of the benefits and downsides of Interactive Brokers Canada are listed below:

Pros

  • Multiple platforms for both beginner and experienced investors
  • Outstanding number of order types
  • Competitive per share pricing
  • Wide range of investment products
  • Multiple account types available

Cons

  • Website is not user-friendly
  • Poorly rated mobile app
  • High inactivity fee for small or inactive accounts. A platform like Wealthsimple Trade does not have account minimums or inactivity fees.
  • Does not offer zero-commission trades in Canada.

Is Interactive Brokers Canada Safe?

This broker is a member of the Investment Industry Regulatory Organization of Canada (IIROC) and Canadian Investor Protection Fund (CIPF).

CIPF–membership means that your investment account is insured up to $1 million against bankruptcy of the firm.

Interactive Brokers Canada’s parent company, IBKR, holds broker/dealer licenses in several countries and has been operating for over four decades.

It has also won “best broker” awards in many categories over the years.

Interactive Brokers Canada vs. Questrade vs. Wealthsimple Trade

Questrade: This is a top independent online brokerage service in Canada with $25 billion in assets under management. It offers free ETF purchases and low fees when you buy and sell stocks ($4.95 to $9.95 per trade).

New customers get a $50 in free trades when they open an account and fund it with at least $1,000 (use SAVVY50 offer code).

You can also learn more about the platform in this review.

Wealthsimiple Trade: This brokerage platform is Canada’s only no-commission broker for stocks and ETFs trades as of this writing. It is a subsidiary of Wealthsimple, the most popular robo-advisor in Canada.

Self-directed investors can buy and sell thousands of stocks and ETFs and pay zero commissions. It also doesn’t have account minimums and account transfer fees are covered up to $150.

New clients who open an account and trade at least $100 in stocks, get a $25 cash bonus.

Get more details in this Wealthsimple Trade review.

Interactive Brokers Canada Review
4.5

Summary

Interactive Brokers Canada is a popular online brokerage platform. This interactive Brokers Canada review covers its fees, pros, cons, alternatives, and whether it is safe.

Pros

  • Platforms for both beginner and experienced investors
  • Variety of order types
  • Competitive per share pricing
  • Wide range of investment products
  • Offers multiple accounts

Cons

  • Outdated website look and feel
  • Poorly rated mobile app
  • High inactivity fee 
  • No zero-commission trades in Canada
Interactive Brokers Canada Review 2021
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Author

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Enoch Omololu

Enoch Omololu is a personal finance expert and a veterinarian. He has a master’s degree in Finance and Investment Management from the University of Aberdeen Business School (Scotland) and has completed several courses and certificates in finance, including the Canadian Securities Course. He also has an MSc. in Agricultural Economics from the University of Manitoba and a Doctor of Veterinary Medicine degree from the University of Ibadan. Enoch has a passion for helping others win with their personal finances and has been writing about money matters for over a decade. His writing has been featured or quoted in the Toronto Star, The Globe and Mail, MSN Money, Financial Post, Winnipeg Free Press, CPA Canada, Credit Canada, Wealthsimple, and many other personal finance publications.

His top investment tools include Wealthsimple and Questrade. He earns cash back on purchases using KOHO and monitors his credit score for free using Borrowell.

3 thoughts on “Interactive Brokers Canada Review 2021”

  1. Am i correct in saying that if I purchase 500 shares of a Canadian stock and the charge is $0.001 CAD per share, then the commission would be $0.5 CAD and not $5 as stated in your article? Apologies if I’ve misunderstood anything.

    Reply
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