this is a question for Canadians only - is 50 dollars annually a good deal for an online mutual funds account?

Question

i'm trying to decide between using an online account or using a conventional bank to purchase mutual funds... I know the online brokerage doesn't charge any commisions to buy or trade mutual funds.

I just wonder if buying them through a conventional bank branch is going to cost the same thru management fees, random bank charges etc.

I like the ease of online trading, and already have a stock trading account with the same brokerage company. I'm not an exceptionally savvy investor but am working at being one.

let me know your thoughts!

thanks

thank you for your answers so far. the 50 dollars is an annual fee they charge to hold a mutual funds account. they do not charge to buy mutual funds.

if your balance/holdings is over 15K, (which it won't be) then you are not charged.

the brokerage i deal with is Credential Direct (www.credentialdirect.com) in Vancouver although I live in Ontario...

I know one advantage is I can buy mutual funds from anyone not just bmo or td-sponsored rsps..

does this change anyone's ideas/opinions?

thanks again

Answer 1

crazy, i won't pay 50 dollars just to hold a mutual fund account.

Bank like RBC, their online banking can trade mutual fund like the 50$ account does. Purchase mutual fund thru a branch usually has no load. Except you are buying any 3rd party fund (ex. You went to RBC and buy AIM Trimark ).

Advantages to purchase from bank:
1) Usually free
2) Free advisor

Disadvantages:
1) Limited products selection

Answer 2

I can't believe they are going to charge you $50 per year for an online Mutual Funds account.

I deal with the TD, so this seems foreign to me - I have an RRSP account (for mutual funds) in addition to my discount brokerage RRSP and cash accounts, and I can view or make purchases at any time for no fees in the account for mutual funds. I can do it all online, set up pre-authorized purchases, and a number of other things as long as the mutual funds are sponsored by TD (i.e. not RBC mutual funds in my TD account). Selling, though, is another thing, as most funds have the minimum hold time, etc. I take it that you aren't talking about an RRSP, are you?

Once you have a high enough balance, regardless of what type of account you have, you can be sure that they will waive any or all fees related to your account.

To compare mutual fund accounts, check out these links:
TD (http://www.tdcanadatrust.com/mutualfunds/invest_tdfunds.jsp)
RBC (http://www.rbcroyalbank.com/RBC:RaucyI71A8UAA1BgbN0/products/rrsp/mutual-funds.html)
CIBC (http://www.cibc.com/ca/mutual-funds/index.html)
BMO (http://www4.bmo.com/personal/0,2273,35649_36892,00.html)
Scotiabank (http://www.scotiabank.com/cda/content/0,1608,CID9460_LIDen,00.html)

I hope this helps. I'd really call them on their fees, if I were you. Shop around - those fees are cutting into your profits.

Answer 3

Have you been to a few different banks (yes not just you current financial institute) and requested documentation with fees and schedules of trading options?? If you currently have an on-line trading account, you may be best to stick with them because you know them, your used to them, and hopefully you trust them (if not then why would you continue to use them). On-line services can offer more and better analysis for short term, but the people in the bank can be robots, passing on info to you that the branches investment team thinks would best suit them primarily, then you second.

Basically, if your happy with your on-line trading company, talk to them and ask them what they offer that other don't, and if your happy, stay with them.

Answer 4

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Answer 5

sounds good but shop around and $50 annunally is kinda weak if you ask me.

unless this is the fees they are charging (which doesn't make sense to do)

I would look around a bit more. but could you elaborate on the $50?