TD, or Toronto-Dominion Bank, is one of Canada’s big five banks. TD Direct Investing is the brokerage division and platform for the bank. Formed in 1955 through the merger of the Bank of Toronto, founded in 1855, and The Dominion Bank, founded in 1869. Today, TD remains a strong and reliable banking institution in the country and around the world. This strength and reliability extends to TD Direct Investing, which is a very safe investing platform for investors to use. In this guide, we look at TD Direct Investing, with what they offer, the pros and cons of the services and for whom they are best suited.
What is TD Direct Investing?
TD Direct Investing is an online trading platform that allows you to buy and sell the following:
- Mutual funds
- Fixed Income Investments
They also offer research, tips and performance tracking tools allowing you to make informed decisions when investing. They have a flat trading fee, to simplify your spending, but it is high at $9.99. TD Direct Investing is aimed at seasoned investors, but they do offer a range of video lessons, master classes, webinars, and articles for the new investor. They offer the following types of accounts:
- Registered: Tax Free Savings Accounts (TFSA), Registered Retirement Savings Plan (RRSP), Registered Education Savings Plans (RESP), Registered Disability Savings Plan (RDSP), and Retirement Income Fund (RIF)
- Locked-in registered: Locked-In Retirement Account (LIRA), Locked-In Retirement Income Fund (LRIF), Life Income Fund (LIF), Prescribed Retirement Income Fund (PRIF), and Self-Directed Locked-in Retirement Savings Plan (LRRSP)
- Restricted registered: Restricted Locked-In Savings Plan (RLSP) and Restricted Locked-In Retirement Income Funds (RLIF)
- Non-registered: Cash Accounts and Margin Accounts
- Other: Individual/Personal Accounts, Joints Accounts, and Non-Personal/Corporate Accounts
Who is it for?
To open an account, you must be a Canadian resident, at least the age of majority and hold a valid Social Insurance Number (SIN). Although they advertise TD Direct Investing is for anyone, you really should not use this platform as a novice investor. It is better suited to someone with experience, ample funds available to spend and a person comfortable with the idea of self-directed investing.
TD Direct Investing Pros and Cons
There are many pros for using TD Direct Investing including:
- Advanced tools. Build, track and ensure investment goals.
- Curated learning opportunities. TD offers video lessons, master classes, webinars, and articles for expanding market know-how.
- Straightforward pricing. As mentioned, they offer a flat rate of $9.99 per trade, so costs are very transparent. With more than 150 trades per quarter the flat rate drops to $7.00 per trade.
- Household Program. Allows individuals to qualify for waived maintenance fees, free market data, and lower trading commissions.
- Free mutual funds trading. There is no cost to buy, sell and switch mutual funds.
- Free data. All account include a basic level of market data.
- Live phone support. You can speak to a real person beyond business hours between 7am and 6pm, Monday to Friday.
- Multilingual support. TD Direct Investing offers support in English, French, Cantonese, and Mandarin.
They also have various cons to consider including:
- High fees. The $9.99 is the highest flat rate of any big bank trading service. Also, trading options add an additional $1.25 per contract, on top of the flat fee.
- Fee for ETF purchases. The fee is also applied to ETFs which eats into your profits.
- Aimed at Seasoned Investors. Most of their trading benefits are for seasoned, active traders with existing equity. There are significantly more benefits for those who have more than $500,000 in assets.
- Pricey upper-level data. TD Direct Investing has fees for various level II market data and professional user fees. Most are free or discounted with 30 or more trades per month.
- Quarterly fee. You will also be charged a $25 maintenance fee each quarter if you have less than $15,000 invested. Again, not the right choice for lower earners.
- No practice accounts. With TD Direct Investing, you are expected to either know how to trade or learn as you trade. They do not offer risk-free, real-time learning opportunities.
- Transfer fees. They will only cover up to $150 in transfer fees, if you transfer over $25,000 into a new TD Direct Investing account
TD Security: Is TD Direct Investing Safe?
Yes, TD Direct Investing is a member of the Canadian Investor Protection Fund (CIPF), so your account is covered up to $1 million. They also use encryption to scramble your information during transactions for a completely secure exchange of information.
TD Direct Investing Platform and App
The TD Direct Investing platform offers the following features:
- Online, mobile, and desktop platforms; allow you to trade from anywhere
- View all your accounts, holdings, quotes, and dividend information
- Analysis tools to help you make informed decisions on investments
- Customizable investment monitoring, for optimized performance tracking
How does TD Direct Investing compare with the competition?
TD has fully integrated mobile and web platforms, with an Advanced Dashboard for active traders. The Advanced Dashboard is one of the best trading platforms in terms of stock information, users have access to many useful screeners. Unfortunately with TD, many of the things you can do online with other platforms, require you to call in and get customer service assistance. Customer service is always readily available but can be required for simple money transfers between accounts. TD Direct Investing is notorious for having the most expensive commission fees of all the big bank platforms. With complicated fees for level II market data where as, RBC Direct Investing offers account holders free level two data.
TD Direct Investing may have some of the best market information and metrics, but it has no risk-free practice account like Scotia iTrade or RBC Direct Investing. They also do not offer free ETF purchases like discount online brokers and Scotia iTrade. With overall higher prices and poor online functionally, TD has good customer service and information, but lack any real draw to new investors. They may be a comfortable home for seasoned investors but even then, Canada’s other big banks will have competitive offerings.
TD Direct Investing FAQs
Should I open a TFSA or RRSP?
TFSAs and RRSPs each have benefits and drawbacks to consider. Most Canadians begin their savings journey with a TFSA. Once the contribution limit is achieved, Canadians usually begin contributing to their RRSPs.
TFSAs are a lot more flexible than RRSPs. You can deposit and withdraw funds into a TFSA without tax consequences. In addition, investment earnings in a TFSA are tax-free. The main thing to consider is the contribution limits as penalties for going over can be expensive. With a RRSP, contributions are tax-deductible and investment earnings are tax-free, but you won’t be able to access those funds again without facing harsh tax consequences or until you’re in retirement.
How to open an Account?
It is a very simple online process. Simply visit TD’s website and navigate to the TD Direct Investing page. Begin your application there and a representative will be in touch with you soon.
How do I transfer cash and securities between TD accounts?
You can transfer funds to your TD Direct Investing account from a TD bank account or TD Direct Investing accounts by telephone and online. You will have to call the TD Contact Centre to transfer from registered to non-registered accounts.