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Saturday, August 9, 2014

TFSA account with Questrade

My long term investing activity takes place with Questrade, a Canadian online discount broker. They offer cheap commissions for stock trading ($4.95 per trade regardless of number of shares) which is pretty good and they have a trading platform (IQ Edge) which is free to use and has all I need for the purposes of long term passive investing (I don't think it is competent enough for active options trading [specially the $9.99 fee per order fill], but for passive investments it is fine).

Questrade, for whatever reason doesn't open TFSA accounts for non-Canadian Citizens. (TFSA = Tax Free Savings Account which would be the equivalent to a Roth IRA in the United States). As a permanent Canadian Resident I did have the right to a TFSA but I always wanted to move it over to Questrade which was impossible as I was only a permanent resident....until this week. I finally became a Canadian Citizen after 5 brutal winters and lots of great experiences in this awesome land. I have $31332 as contribution room in this account and I will be maxing it out in Questrade during the next few months investing in Canadian dividend growers for the long term.

I immediately sent $20000 to Questrade and deployed almost $4500 of them this week. I purchased 45 shares of Emera at $33.78; 35 shares of Suncor Energy at $42.87 and 26 shares of TD Bank at $56.55. The TSX Index has been on a tear for the last few months and people have been fearing a correction for some weeks now. I know I didn't purchase these shares are optimal bargain like prices. Specially Suncor and TD. I'm very happy with the purchase of Emera at that level. If we finally get a 10% correction or whatever the final number is, I will average down on these positions by deploying new capital at those more attractive levels. In the mean time I will reap the rewards and will add these three positions to my little army of dividend payers. With these 3 additions, my yearly dividend income is now $767.60 (CAD) plus $381.68 (USD). That's around a hundred bucks each month without doing anything!

I'm now invested in 10 Canadian companies and 7 American ones. Inside this TFSA account I will only invest in Canadian stocks in order to avoid the 15% withholding tax charged to the dividend received from American companies. I would like to add Royal Bank of Canada, Enbridge and Canadian Imperial Bank of Commerce at some point.

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3 comments:

  1. Hi LT, I have all my accounts with RBC, I'm just wondering, what do you think about invest long term(passive mode) with their RBC Direct Investment tools?

    ReplyDelete
    Replies
    1. First off, note that I dont have experience with RBC Direct Investing.
      However, looking at their fees alone I would go with Questrade. Here's a link to RBC's Direct Investing fees
      http://www.rbcdirectinvesting.com/commissions-fees-schedule.html

      They charge you maintenance fees if you have less than 15000 in assets.
      Typical commission is $9.95 vs $4.95 with Questrade. They charge you for buying ETFs, which is free with Questrade.
      The only reason I would be with RBC Direct Investing is if you are not a Canadian Citizen, in which case Questrade will not be willing to open a TFSA account for you.

      Again, I have not used RBC Direct first hand. Just judging by the costs.
      My experience with Questrade has been really good.
      Cheers,
      LT

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