TD direct investing

TD Direct Investing Review

TD Direct Investing offers a wide range of trading instruments…at a much higher cost. But, it comes with the backing of a reputable financial organization, which makes it a good option for self-directed investors as you’re guaranteed the safety of your money.

Overview 

People go in search of cheaper ways to make investments every day. This has led to an increase in the number of discount brokers across Canada, and more banking institutions have begun to offer online brokerages to rival non-banking platforms.

TD Direct Investing is one of Canada’s first online trading platforms. It was founded in 1984 as TD Waterhouse Discount Brokerage and is now one of the most powerful discount brokers in the country, thanks to the Toronto-Dominion Bank’s support. TD Direct Investing gives you the security of working with a brokerage from one of the country’s biggest financial institutions. Despite the great leap over the years, TD Direct Investing still comes behind the non-bank brokerages.

In this review, we’ll take you through everything you need to know about TD Direct Investing, but before that, let’s take a look at some of the things to put into consideration when selecting a discount broker.

Things to Consider when Choosing a Discount Broker

Fees

Of course, this has to be the most important factor to consider because you’re looking for a brokerage firm that gives you a commission on the transactions you make. It has to be relatively inexpensive.

Platform

The ease of operation of the platform is another thing to consider when selecting a discount broker. Even if the service is cheap, it is pertinent that it is quite easy to understand and operate.

Features

What do you desire from a discount brokerage firm? What are your investment needs? You should ensure that your discount broker offers the services you need. 

Customer service

You should also consider how much support you can get if you need anything. You can contact them before buying or read online reviews like this one.

ETF and Mutual Fund Commissions

TD Direct Investing does not offer any special prices or discounted rates for buying ETFs. This means that they must be purchased at the standardized flat rate of $9.99 per trade. 

No matter the size of the trade, clients will have the standard commission. This makes it pleasing to purchase bigger ETFs through the platform as you get to pay the same rate irrespective of the trade size. 

While the standard rate puts TD Direct Investing in line with most of the bank-based brokerages, it is still expensive and at a disadvantage, compared to most of the non-bank based platforms like Questrade that allows you to make free ETF purchases. Scotiabank’s iTrade is the only bank-based online broker that offers free Exchange-Traded Fund (ETF) purchases.

On the other hand, mutual funds are free to buy, sell, and switch on the TD Direct Investing platform. You are not charged any commissions here. However, this comes at the cost of limited options relative to other platforms. 

TD Direct Investing does not allow you to trade with F series mutual funds. This means that they get to take the fee meant for advisors even though they do not offer any advice. You can only trade with A-series mutual funds, which has a management fee of 2.25%, more than double the price of F series funds with a management fee of 1.11%. This makes it more expensive to go through TD Direct Investing as against other discount brokers.

Stock Commissions

The trading of equities like stocks with TD Direct Investing is also set at the flat rate of $9.99 per trade, which is just too expensive for most investors. However, if you’re an active trader with more than 150 trades per quarter, TD reduces the commission to a flat rate of $7 per trade. But, this is still expensive when you compare with most non-bank discount brokers.

Stock Quotes and Research

One of the major advantages that come with TD Direct Investing is their research section and screeners. Despite the uncompetitive and expensive commission structure, research is one thing that TD Direct Investing does well. 

There is a lot of helpful information from their stock quotes, with a wonderful web design layout and exceptional screeners. The screeners can be saved and shared, making it very easy for clients to inspect suggested screens and the best community-created screens. Having an unfunded account for the sole purpose of the research is well worth it.

Customer Service 

Customer service is another major strong point of TD Direct Investing. Its service agents are always on hand to attend to new and experienced investors. They are always available and ready to answer all questions and assist with all investment needs. 

Customer service agents can be reached through telephone, in various languages. You can also request a booking form if you desire to visit a local branch for a face to face dialogue.

However, there is currently no provision for live online chat support, which is the only drawback. 

Deposit and Withdrawal

Unlike some online discount brokers that provide convenient payment processors like Pay and Neteller, the funding options in the TD Direct Investing platform are quite limited. You can only carry out wire transfers, which may not be cleared until after a few days. 

You may decide to open your account in either USD or CAD, and you’re not affected by currency conversion fees when you operate an account in your own currency. 

Account Opening 

It is straightforward to apply online for a TD Direct Investing account. You’ll only be required to enter your personal information, the type of account you want, as well as upload some documents. 

The verification process may take a few days, after which you can start funding your account and using the service. If you encounter any problems, you can always reach out to the customer service team for a quick solution.

Issues and Problems

1. One of the main drawbacks of the TD Direct Investing platform is that even while the customer service agents are always available to provide any help, it’s difficult to carry out certain tasks from the website. This gives you no option but to reach out to service agents even for the simplest of tasks. 

It is impossible to transfer money from a registered account to an unregistered one online – you can only do it over the phone. Trading some mutual funds may also cause your account to be kept on hold, and you can’t complete the trade unless you make a phone call.

One can easily carry out these simple tasks online with most online brokerages. Still, with the TD Direct Investing platform, it is necessary to contact their customer service agents even for tasks that should otherwise be very easy to perform.

2. Alongside the problem of only high fee mutual bonds being available, TD Direct Investing employs two different types of RSP accounts. The self-directed account has an annual fee of $100, and the basic account, which has an annual fee of $25. 

With the basic account, you can only purchase mutual funds, which means you have to spend extra if you want to get ETFs. This is poor compared to virtual brokers who do not charge any fees for RSP accounts and have no limitations on what a client can purchase.

3. There is some difficulty for people that use TD Direct Investing without a regular TD bank account. Unlike other online brokerages, it is not easy to enter banking information that will link a chequing account to your TD Direct Investing account for withdrawals. This leaves you with the option of mailing the cheque, which may take weeks to process and require processing fees.

TD Direct Investing is a separate company from TD Bank, and visiting a local TD branch to inquire about your TD Direct Investing account will be fruitless. Branch staff cannot link a recently created TD bank account to a TD Direct Investing account, which means that you have to, again, put a call through to a customer service agent.

Editor’s Opinion

TD Direct Investing offers a wide range of trading instruments and several educational materials. It does not offer Forex, CFD, or cryptocurrency trading, and compared to non-banking firms like Questrade and Wealthsimple, it comes at a much higher cost. It also does not offer the popular MetaTrader trading platform, and there are limited funding options. 

But, the fact that it comes with the backing of a reputable financial organization makes it a good option for self-directed investors as you’re guaranteed the safety of your money. It also allows you to learn and be secure with self-directed investing.

In general, TD Directing Investing is not a very good choice if you’re a buy and hold investor or an active trader. The absence of basic tools on their website makes it difficult to carry out seemingly easy tasks, so you constantly need to reach out to their customer service agents. They have a wonderful research section, but it is not worth the amount you have to pay in commission and account fees.

You can explore the TD Direct Investing platform.

TD Direct Investing FAQs

Is there a TD Direct Investing app?

You can download the TD app on Google Play Store and on App store to help you monitor your account and stay on top of market events, learn, and trade on the go. The app is available in English, French, and Traditional or Simplified Chinese. It would be best to have a device of IOS version 9 or higher or Android version 4.4 or higher to get the app.

How much does TD Direct Investing cost?

TD Direct Investing has a standard rate of $9.99 per trade for any Canadian or US stock, irrespective of the size of the purchase.

How can I get a TD Direct Investing contact number?

You can reach out to an investment representative from Monday to Friday, from 7 am to 6 pm at 1-800-465-5463.

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