TD Direct Investing Review 2020

TD Direct Investing is one of the brokerage platforms available to self-directed investors in Canada. You can use it to trade stocks, ETFs, mutual funds, and a variety of other investment securities.

While TD Directing Investing is popular, its trading fees are not competitive when compared to many of the trading platforms on our list of the best trading platforms in Canada.

Trading fees and commission are not the only factors to consider when opening a brokerage account. You should also take a look at the available investment products, types of accounts, trading platform features, customer support, and more.

This TD Direct Investing review covers its fees, benefits, downsides, and alternatives.

What’s TD Direct Investing?

TD Direct Investing was the first bank-owned self-directed brokerage in Canada when it was launched in 1984.

It introduced its online platform, Web Broker, in 1996 (a first), and launched its Active Trader and thinkorswim platforms in 2006 and 2009 respectively.

The TD investment app was launched in 2011 and is available on the App Store and Google Play.

TD Direct Investing Accounts

Self-directed (DIY) investors can use the TD Direct Investing platform to trade and invest using various accounts, including:

• Tax-Free Savings Account (TFSA)
• Registered Retirement Savings Plan (RRSP)
• Registered Education Savings Plan (RESP)
• Registered Retirement Income Fund (RRIF)
• Locked-in Retirement Accounts (LIRA)
• Life Income Funds (LIF)
• Registered Disability Savings Plan (RDSP)
• Margin and Cash accounts

TD Direct Investing Investment Types

You can choose from a variety of investments for your account:

Equities: These are stocks or shares of a company. When you purchase a stock, you become a part-owner in the company, and may earn dividends and capital gains.

Exchange Traded Funds (ETFs): These are baskets of stocks, bond, or commodities that track the performance of a benchmark index. ETFs are traded on a stock exchange.

Options: These financial derivatives have values that are dependent on the underlying asset (e.g. stock). An options contract gives an investor the right to buy or sell the underlying asset at a specific price within a specific time frame.

Mutual Funds: These are professionally managed portfolios of stocks, bonds, etc. They have built-in management fees.

Precious Metal Certificates: You can buy gold and silver certificates in order to diversify your portfolio or to hedge against inflation.

Fixed Income Assets: Includes Government of Canada, provincial, corporate, and municipal bonds; mortgage-backed securities, and money market instruments e.g. treasury bills, banker’s acceptances and commercial papers.

Term Deposits: Investors with a short term investment horizon or low risk tolerance can invest using term deposits and GICs.

TD Direct Investing Fees

TD Direct Investing fees are some of the highest in the industry.

Compared to low-cost trading platforms, TD’s standard flat rate pricing is not competitive.

Commissions for bonds, GICs, and term deposits are included in the quoted prices. A minimum purchase amount may apply.

There are no commissions to buy or sell mutual funds. If you hold the fund for less than 30 days, a short-term redemption fee equal to 1% of the redemption value or $45 (whichever is greater) plus mutual fund company fees apply.

Gold bullion trades cost $30 + $1/oz, and silver bullion cost $30 + $0.10/oz. These fees are quoted in USD.

TD Direct Investing Maintenance Fees

If your total account balance is less than $15,000, a $25 maintenance fee is paid per quarter.

You can waive this fee via TD’s Household Program if:

• The combined assets in your household accounts exceed $15,000
• You have made 3+ trades that incurred a commission in the last quarter
• Your account is new and not older than 6 months
• Your household has a Registered Disability Savings Plan account with TD
• One or more of the accounts in your household is signed up for pre-authorized contribution of at least $100 each month

Additional administrative fees that may apply to your account are:

• Full RRSP account withdrawal: $100
• Partial RRSP withdrawal: $25
• Mailed account statement: $2 each
• Duplicate statement: $5 each
• Account transfer (partial or full): $150

TD Direct Investing Trading Platforms

Clients of TD Direct Investing have access to four trading platforms.

Web Broker: This is TD’s most popular trading platform. It offers real-time level 1 market data, investment screeners, charting tools, advanced order types, automated alerts and more.

TD mobile app: Works on iOS and Android devices and available in English, French and Chinese.  It can be used to trade stocks, ETFs and options and integrated well with Web Broker.

Advanced Dashboard: Offers real-time streaming data with advanced charting and option analytics for experienced traders.

ThinkorSwim: For active U.S. options traders and requires a minimum of $25,000 USD balance to activate. Provides access to level II streaming data, customizable charting, live CNBC news feed, and more. This platform is powered by TD Ameritrade.

TD Direct Investing clients have access to market research, analysis, webinars, video lessons, and an introductory Master Class.

TD Direct Investing Pros and Cons

Below are some of the benefits and downsides of using TD Direct Investing for your trading.

Pros

• Access to feature-packed investing platforms with advanced trading tools.
• Access to multiple investment accounts and securities.
• Customer service support from 7am to 6pm ET on Monday to Friday.
• Canada’s largest online brokerage.
• Well rated mobile app by real users.
• Comprehensive and free investment education resources.
• If you transfer your account of $25,000 or more to TD Direct, your transfer fees may be reimbursed up to $150.
• You can easily set up dividend reinvestment plans (DRIP) and pre-authorized purchases for mutual funds.

Cons

• Standard trading fees for stocks are high at $9.99. There are many online brokerages with lower fees. e.g. Questrade starts at $4.95/trade, and Wealthsimple has no trading commissions.
• The $25 quarterly fees increases your investment costs if you don’t have more than $15,000 to invest.
• Self-directed investing platform with no access to professional management. Unlike robo-advisors, you don’t enjoy free portfolio advice or automatic rebalancing.
• There are no trading fee discount for students.

Is TD Direct Investing Safe and Legit?

TD Bank is a Big 5 bank in Canada and one of the largest banks in North America.

TD Direct Investing is also one of Canada’s largest online discount brokerages.

TD is a member of the Canadian Investor Protection Fund (CIPF) and the Investment Industry Regulatory Organization of Canada (IIROC). CIPF membership protects your account against insolvency by up to $1 million.

Lastly, TD offers an Online and Mobile Security Guarantee. If you experience a loss due to unauthorized transactions on your account, you will receive 100% reimbursement (subject to terms and conditions).

TD Direct Investing vs. Alternatives

The table below shows how TD Direct Investing compares to other brokerage platforms in Canada including CIBC Investor’s Edge, Wealthsimple Trade and Questrade.

TD Direct Investing FAQ

Are you a TD Direct Investing client? Let us know about your experiences with the platform in the comments.