Investing

Interactive Brokers is so good, why anyone still bothers to use bank’s trading platform?

  • Last Updated:
  • Jan 8th, 2021 3:49 pm

Poll: Which trading platform do you prefer?

  • Total votes: 45. You have voted on this poll.
IB
 
10
22%
Questrade
 
13
29%
RBC
 
4
9%
CIBC
 
4
9%
Scotiabank
 
3
7%
BMO
 
4
9%
Others
 
7
16%

Poll ended at Nov 23rd, 2018 6:56 pm

[OP]
Newbie
Jul 31, 2018
57 posts
97 upvotes

Interactive Brokers is so good, why anyone still bothers to use bank’s trading platform?

I switched from RBC DirectInvestment to Questrade, and recently switched again to IB. The only reason that I didn’t switch to IB sooner is that I never heard them before. When I was searching the lowest commission brokers in Canada (supporting TFSA of course), the best result I got was Questrade. Based on my experience, my average cost on Questrade is about 3% (I trade both equities and options). The primary hidden cost of Questrade is the currency conversion fee. It’s extremely hard to figure out the exact amount of conversion fee incurred as the currency value is so subtle and volatile. After switching to IB, I’m amazed by the fact that they treat FX transactions as part of your trading activities. They allow you to set your own price, just like trading every other assets. In general, IB has the following benefits over Questrade:

1) extremely low commissions. The minimum is $1, unlike $5 with Questrade. Option trading is also very cheap, especially they don’t charge option assignment fee. This means you can hold your options till expiration without worrying about the ding of $25 assignment fee per contract charged by Questrade.
2) low margin rate. They also have a “return enhancement” program you can opt in to lend out your stocks to short sellers, which gives you additional yield boost.
3) complex yet informative trading information.

There are also some downsides of IB. But to me they are negligible:

1) $10 per month account maintenance fee if account balance less than 100k, waivable if your trading cost is greater than $10. You don’t need to worry about this if you place at least two orders per month (or one order if you’re switching from RBC)
2) customer service is lacking. They feel somewhat cold when you call in, like they don’t care about your business. But I guess I can put up with this as There’s really no need to call in. Their Website and app functions are quite comprehensive.
3) no instant deposit method. Unlike Questrade which supports Interac, or RBC DI which you transfer funds directly from your checking account, the fastest way to deposit with IB takes 2-3 business days. If you are small traders who trade with their monthly salary like me, you will find this matters as Sometimes you probably will miss the best buying chances.

All in all, after switching to IB, I won’t look back.
307 replies
Deal Addict
User avatar
Dec 4, 2007
3961 posts
1628 upvotes
Quebec
IB is absolutely amazing for experienced active trader... Not so much for beginners with small amount of money. Fees can add up fast so make beginners lost their money in no time while learning.
Deal Addict
User avatar
Aug 4, 2014
3113 posts
3123 upvotes
Toronto, ON
My husband’s and mine accounts are at Questrade, moved there from TD DI and are quite satisfied (mostly buying ETFs) But when I started looking at options trading last year, I quickly came to conclusion that if I ever get serious about it - will need to open an IB account. Thank you for confirming that! :)
Deal Fanatic
User avatar
Oct 1, 2011
6337 posts
1501 upvotes
I use IB for most of my investing, but I keep my RRSP in my TDDI account...can't avoid the IB fees for RRSP if I were to move them there.

I'm a few years' noob, and you sound much more experienced than I am. You seem to know exactly what you like, and I don't use most of the features offered by IB. Where do you get your research, if any? I also like accessing TDDI's resources.
Sr. Member
Jan 6, 2015
836 posts
231 upvotes
freilona wrote: My husband’s and mine accounts are at Questrade, moved there from TD DI and are quite satisfied (mostly buying ETFs) But when I started looking at options trading last year, I quickly came to conclusion that if I ever get serious about it - will need to open an IB account. Thank you for confirming that! :)
hoping more information about Questrade for trade stocks, CIBC sucks, I need to switch. They have ECN fee, no clue at all. No options needed for now.
Deal Addict
User avatar
Aug 4, 2014
3113 posts
3123 upvotes
Toronto, ON
reps001 wrote: hoping more information about Questrade for trade stocks, CIBC sucks, I need to switch. They have ECN fee, no clue at all. No options needed for now.
Unless you trade penny stocks, it’s easy to avoid ECN fees at Questrade: 1) place Limit orders only, 2) Buy orders at Bid price or below and Sell orders at Ask price or above, 3) trade in multiple of 100 shares :)

That’s a practical “tried and true” explanation of what’s written on their website:
ECN Fees (removing liquidity)

ECN fees are only charged when a buy or sell order removes liquidity, meaning it's likely to be filled immediately. This includes all market orders, where the investor accepts the price without specifying a minimum or maximum.

Non-marketable orders

You may also be charged an ECN fee if you trade a “non-marketable order,” which is a technical term for any order not in a multiple of 100 shares. If you put in an order to buy or sell 50 shares, this type of order is a non-marketable order and will be charged an ECN fee. An order of 100, 200, 300, etc. shares is a standard lot (also known as a board lot) and a “marketable order,” and will not inherently be charged with an ECN fee.
https://www.questrade.com/pricing/self- ... ransaction

But for regular orders of less than 1,000 shares, there’s too much fuss over a few pennies.. :)
Deal Addict
User avatar
Dec 4, 2007
3961 posts
1628 upvotes
Quebec
I hope the up coming wealth simple trade is going to change the broker market.
Deal Addict
Jul 3, 2006
1961 posts
584 upvotes
cheapest margin
pays good amount for cash compared to other investment accounts
Deal Addict
User avatar
Apr 23, 2009
1733 posts
701 upvotes
I use IB for everything except RESPs and RRSPs.

I have mix of IB, QT, VB, TD and CIBC also in our family. But most of our assets are in IB.

An example - IB charges in cents per contract for US options . Yesterday, bought 5 contracts of 3M options and paid 58 cents per contract. You can imagine what other brokers would charge for this.

A minimum of $9 per contract is a norm. And there is also an assignment fee of $24 with QT for example.

At IB, if you get assigned, there is a zero fee.

What’s not to like?
Deal Addict
Jul 27, 2017
2180 posts
940 upvotes
ruchir wrote: I use IB for everything except RESPs and RRSPs.

I have mix of IB, QT, VB, TD and CIBC also in our family. But most of our assets are in IB.

An example - IB charges in cents per contract for US options . Yesterday, bought 5 contracts of 3M options and paid 58 cents per contract. You can imagine what other brokers would charge for this.

A minimum of $9 per contract is a norm. And there is also an assignment fee of $24 with QT for example.

At IB, if you get assigned, there is a zero fee.

What’s not to like?
@ruchir, thanks for posting that.

what a start to some sound weekend advice.
Deal Addict
User avatar
Apr 23, 2009
1733 posts
701 upvotes
porticoman wrote: @ruchir, thanks for posting that.

what a start to some sound weekend advice.
Hardly any advice from me! The OP has already figured it out. Just confirming for the fence sitters that I am a happy customer.
Sr. Member
User avatar
May 7, 2017
929 posts
461 upvotes
IB is a brokerage geared towards professional traders or large portfolios. If you can’t work with them, move out. They keep themselves profitable by catering to the specific clientele.

Bank brokerages are full service brokerages. Their fees are high because they keep customer service and support staff to cater to people who well at times can’t trade on their own or they need someone to take care of their investments. Hence the high commissions and fees.

Besides if you hold your portfolio with a bank, you get benefits from it too (hsbc premier).

There are no one-fits-all solution in the world. So it’s alright to look for other brokers.

PS: I am a happy IB customer too and I also trade enough that IB fees don’t matter as much to me. I wasn’t happy with TD and Hsbc invest direct.
Member
Nov 18, 2008
308 posts
104 upvotes
Toronto
yughred wrote: I switched from RBC DirectInvestment to Questrade, and recently switched again to IB. The only reason that I didn’t switch to IB sooner is that I never heard them before. When I was searching the lowest commission brokers in Canada (supporting TFSA of course), the best result I got was Questrade. Based on my experience, my average cost on Questrade is about 3% (I trade both equities and options). The primary hidden cost of Questrade is the currency conversion fee. It’s extremely hard to figure out the exact amount of conversion fee incurred as the currency value is so subtle and volatile. After switching to IB, I’m amazed by the fact that they treat FX transactions as part of your trading activities. They allow you to set your own price, just like trading every other assets. In general, IB has the following benefits over Questrade:

1) extremely low commissions. The minimum is $1, unlike $5 with Questrade. Option trading is also very cheap, especially they don’t charge option assignment fee. This means you can hold your options till expiration without worrying about the ding of $25 assignment fee per contract charged by Questrade.
2) low margin rate. They also have a “return enhancement” program you can opt in to lend out your stocks to short sellers, which gives you additional yield boost.
3) complex yet informative trading information.

There are also some downsides of IB. But to me they are negligible:

1) $10 per month account maintenance fee if account balance less than 100k, waivable if your trading cost is greater than $10. You don’t need to worry about this if you place at least two orders per month (or one order if you’re switching from RBC)
2) customer service is lacking. They feel somewhat cold when you call in, like they don’t care about your business. But I guess I can put up with this as There’s really no need to call in. Their Website and app functions are quite comprehensive.
3) no instant deposit method. Unlike Questrade which supports Interac, or RBC DI which you transfer funds directly from your checking account, the fastest way to deposit with IB takes 2-3 business days. If you are small traders who trade with their monthly salary like me, you will find this matters as Sometimes you probably will miss the best buying chances.

All in all, after switching to IB, I won’t look back.
Want to do some read up, is this the site: https://www.interactivebrokers.ca/en/home.php
Newbie
Nov 10, 2018
25 posts
20 upvotes
For the IB users here - in what instrument(s) (ie. HISA fund, money market ETF, etc) do you park your extra cash?
Deal Fanatic
Jun 3, 2009
5007 posts
993 upvotes
Montreal
NinoSavatte wrote: For the IB users here - in what instrument(s) (ie. HISA fund, money market ETF, etc) do you park your extra cash?
https://financefeeds.com/interactive-br ... obile-app/

I try to stay invested in quality companies paying dividends and simply my tax reporting as much as possible so I never bothered with any HISA unless it's a registered account. IB is still a no brainer for any non reg accounts IMHO.
Sr. Member
Jun 28, 2018
800 posts
549 upvotes
Toronto
NinoSavatte wrote: For the IB users here - in what instrument(s) (ie. HISA fund, money market ETF, etc) do you park your extra cash?
I'm all debt so I don't need to worry about "loose change" and can enjoy their dirt cheap margin debt that is lower than my LoC (though one needs to be careful about margin). However, IB does pay you interest for idle cash balances based on a threshold calculation. Not a whole lot, but compared to other brokerages it's at least something.

Here are the current rates that would apply on the thresholds found on their site:

Currency Tier Rate Paid: IBKR PRO Rate Paid: IBKR LITE
USD 0 - 10,000 0% 0%
10,000.01 + 1.05% (BM - 0.5%) 0.05% (BM - 1.5%)
CAD 0 - 14,000 0% 0%
14,000.01 + 1.116% (BM - 0.5%) 0.116% (BM - 1.5%)

https://www.interactivebrokers.com/en/index.php?f=1595
Last edited by johnnychi on Nov 7th, 2019 7:56 pm, edited 1 time in total.
The Distracted Investor

Dividends through quality companies 😃 Though I usually lose money with trades :facepalm:
Sr. Member
Jun 28, 2018
800 posts
549 upvotes
Toronto
I'm not particularly active, but one thing to keep in mind they charge a true $0.01/share. So if you sell 100,000 shares you could be dinged for $10.00 for the trade or a maximum of 0.5% of trade value. So if your trade was 100,000 shares worth $10,000 @ $0.10, the most you would be charged is $50 (not $1,000 commission).

I buy a little bit at a time and build up a position, but if I were to ever unwind the commission will be eaten up.
The Distracted Investor

Dividends through quality companies 😃 Though I usually lose money with trades :facepalm:
Deal Fanatic
Oct 1, 2004
6203 posts
620 upvotes
Toronto
Does IB offer sign up bonuses such as open account with $250K get $1000 sort of thing like BMO has right now?
Banned
Aug 23, 2019
897 posts
450 upvotes
yughred wrote: I switched from RBC DirectInvestment to Questrade, and recently switched again to IB. The only reason that I didn’t switch to IB sooner is that I never heard them before. When I was searching the lowest commission brokers in Canada (supporting TFSA of course), the best result I got was Questrade. Based on my experience, my average cost on Questrade is about 3% (I trade both equities and options). The primary hidden cost of Questrade is the currency conversion fee. It’s extremely hard to figure out the exact amount of conversion fee incurred as the currency value is so subtle and volatile. After switching to IB, I’m amazed by the fact that they treat FX transactions as part of your trading activities. They allow you to set your own price, just like trading every other assets. In general, IB has the following benefits over Questrade:

1) extremely low commissions. The minimum is $1, unlike $5 with Questrade. Option trading is also very cheap, especially they don’t charge option assignment fee. This means you can hold your options till expiration without worrying about the ding of $25 assignment fee per contract charged by Questrade.
2) low margin rate. They also have a “return enhancement” program you can opt in to lend out your stocks to short sellers, which gives you additional yield boost.
3) complex yet informative trading information.

There are also some downsides of IB. But to me they are negligible:

1) $10 per month account maintenance fee if account balance less than 100k, waivable if your trading cost is greater than $10. You don’t need to worry about this if you place at least two orders per month (or one order if you’re switching from RBC)
2) customer service is lacking. They feel somewhat cold when you call in, like they don’t care about your business. But I guess I can put up with this as There’s really no need to call in. Their Website and app functions are quite comprehensive.
3) no instant deposit method. Unlike Questrade which supports Interac, or RBC DI which you transfer funds directly from your checking account, the fastest way to deposit with IB takes 2-3 business days. If you are small traders who trade with their monthly salary like me, you will find this matters as Sometimes you probably will miss the best buying chances.

All in all, after switching to IB, I won’t look back.
yes I moved my day trading stuff to IB.. left my core stuff that doesn't trade often at the big 5.

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