RBC Direct Investing: Is It The Best Canadian Discount Brokerage?

Last updated on June 13th, 2020 at 05:06 pm

Royal Bank of Canada (RBC) in 1864 formed its Direct Investing division. RBC Direct Investing is a Canadian discount stockbroker serving millions of Canadians with top-notch services. The regulation of direct investing is done by the Investment Industry Regulatory Organization of Canada (IIROC). It is also a member of the Canadian Investor Protection Fund (CIPF).

The RBC Direct Investing division is considered to be one of the safest investment schemes because it is one of the longest surviving stockbrokers. It is listed on the stock exchange, has a bank backing, and regularly reveals its financials. All these combined with its long-lasting nature and continuous monitoring by a top-notch regulator makes it very safe for investment.

So what exactly does RBC Direct Investing has to offer? What about the fees? What are the features and benefits? How does it compare to the likes of other similar discount brokerage platforms such as Questrade (with $0 ETF buy/sell fees), BMO’s InvestorLine, CIBC Investors Edge or TD Direct Investing? There are a ton of factors you need to consider before switching or opening an investment account. Let’s get to details here. 

Let’s get started with What Is RBC Direct Investing? 

RBC Direct Investing

What Is RBC Direct Investing?

RBC Direct Investing is yet another Canadian Investment platform from the Royal Bank Of Canada (RBC), which is one of the premium banks or The Big 5 banks in Canada. Now, that’s the advantage you get with opening an account with RBC and Direct Investing. You’re dealing with RBC and the bank’s been there for several decades and your money is so much safer and leaves you with peace of mind.

Apart from the above-said reason, there’s nothing unique as is with RBC Direct Investing, we’ll talk about the fees and charges a little later.

With RBC Direct Investing there are no delays in real-time quotes, no string attached or charges, but that’s all there, it’s with every other platform out there. So I won’t buy that. The main reasons I would like to see before making the switch or opening the account is – how stable the platform is – which is a yes here, what are the fees involved for buying ETFs or stocks, next will be – what are the annual maintenance fees if any, and how much is it for TFSA and RRSP accounts maintenance fees.

My next question probably will be If I want to invest in the US Stocks, how does the currency exchange work with the RBC Direct Investing?

RBC Direct Investing

Pros Of RBC Direct Investing

There are quite a number of reasons for you to use RBC Direct Investing, I will be pointing out a few of the benefits of investing with them below.

RBC Direct Investing with its banking background has devised a way to ensure its customers’ accounts are opened as quickly as possible. They have excellent customer service.

Customer’s questions and problems are answered and solved in as little time as possible. RBC Direct Investing also takes great care to educate its investors. Their tutorial and demo accounts are as close to the real thing as possible. They make a lot of tools available for new customers to learn with.

With RBC Direct Investing, you can be sure that you will get the hang of things as quickly as possible. If you ever have any issues, you can always reach out to their excellent customer service. Your issues will be solved as quickly as possible.

Cons Of RBC Direct Investing

As you know, there are no positives without a few drawbacks.

RBC Direct Investing is not without its flaws. The most obvious flaw would be in its outdated mobile trading app.

The mobile app is not keeping with the times and navigation is not as smooth as can be. Another very strong limitation is in its market coverage. RBC Direct Investing covers only US and Canadian markets.

This means other markets are not available to their customers. You might also find an issue with deposit and withdrawal options. RBC Direct Investing has limited options when it comes to both. They have no options to allow deposit with credit cards or electronic wallets.

RBC Direct Investing TFSA

RBC Direct Investing Fees

RBC Direct Investing operates without mutual fund fees.

What this means is that you can trade without fear of incurring additional charges on your trading. They also operate with very low non-trading fees; you can leave your account inactive for a while without your charges building up to a very huge amount. There is also no withdrawal fee, even if your account has been inactive. If you are an RBC client, you also don’t have to worry about withdrawal fees too. There are no charges attached to withdrawals as long as you a client.

RBC does have a couple of fees that are on the high side. The first to take note of is that they charge very high option fees. There is also an account fee that you can be charged if your balance is below CAD 15000.

The charges on accounts below CAD 15000 can be as high as $25, which is pretty high when compared with the charges of other brokers.

RBC Direct Investing

RBC Direct Investing Maintenance Fees

RBC’s Direct Investing Maintenance Fees is applicable under two scenarios:

If you are an RBC Direct Investing Client with combined assets of $15,000 or more across all of your RBC Direct Investing accounts then you’ll end up paying no fees

If you are an RBC Direct Investing Client with combined assets of $15,000 or under across all of your RBC Direct Investing accounts then you’ll end up paying a fee of $25 per quarter or $100 per year (that’s huge)

Your RBC Direct Investing Maintenance fees are waived if you fall into any one of the below criteria:

If you have signed up for a pre-authorized contribution to your RBC Direct Investing Account which should at least be $100 per month or $300 per quarter.

Opening An account with RBC Direct Investing

You can open an account with RBC Direct Investing easily. It is a fully digital procedure.

This means you can open an account from anywhere in the world. Another thing to note is the lack of minimum deposit. This means you can open an account with just about any amount of money. There are also different kinds of individual accounts to choose from.

You might find things a bit complex if you do not own an RBC account prior to this.

The kinds of individual accounts you can choose from include:

1. Individual or Personal Account: this is an account opened and owned by just one individual. You can open this account if you are planning on trading alone.

2. Joint Account: this is an account opened and jointly owned by two or more persons. You can open this account with friends or partners.

3. Non-personal accounts: These accounts are opened by legal entities rather than individuals. This could be a company or business.

Accounts are classified based on ownership.

You can choose which kind of account suits you the most, depending on what your plans are for the account. Once you have decided on which account you are opening, it is time to actually open the account.

Things are much easier if you already have an RBC bank account. You can do it online and your account should be opened within two (2) business days.

If you do not have and RBC bank account and are opening Joint or Personal accounts you have two options. You may either decide to use a fully digital application process or a print-and-mail application. The digital application will be rated based on credit scores from a third party company. If there is a need for further information, RBC will reach out to you personally.

If you are going with the non-personal account option, you have to download, print and then mail your application form to them.

RBC Real Time AdvantageDeposits and Withdrawals With RBC Direct Investing

As I already mentioned, there are no fees attached to deposits and withdrawals, a very big plus that works in favour of both you and RBC.

The only downsides are you can’t use credit/debit cards or electronic wallets with RBC Direct Investing, and your withdrawals may also end up being charged if you aren’t a bank customer prior to trading.

There are two currencies to trade with when using RBC’s services; Canadian dollars or US dollars. These are the two base currencies available. This might not seem to matter to you at first, but you should note that there are currency conversion fees. If you decide on a USD account, depositing CAD will attract a fee and vice versa.

Also take note, that you can avoid being charged currency conversion fees if you trade in your base currency.

RBC Direct Investing Vs. Others

Here’s the complete in-depth comparison of the RBC Direct Investing Vs. Others

Brokerage FirmCost/Stock Purchase$/ETF Purchase$/Mutual Fund PurchaseOptions Purchase (Single Option)RRSP/TFSA – Maintenance Fees
Questrade

1 cent/share 

Minimum $4.95 and Max $9.95

Buy For FREE and Sell for 1¢/share; min. $4.95 to max $9.95$9.95/Trade$9.95 + $1/contract

$0 account opening or closing fees

$0 annual RRSP or TFSA account fees

CIBC Investor’s Edge$6.95 Per Trade | Buy Or Sell – Flat Price$6.95 Per Trade | Buy Or Sell – Flat PriceNo Additional Commission

$6.95 + $1.25

per contract

$0 Annual Fee for TFSA and RRSP Accounts
BMO InvestorLine$9.95 Per Trade | Buy Or Sell – Flat Price

$9.95 Per trade|Buy Or Sell | Flat Price

No Fee $9.95 + $1.25 per contractNo fee is charged when your account value is greater than or equal to $25,000. An annual administration fee of $50 is charged for RESP accounts less than $25,000. For all other registered accounts, $100 is charged for accounts of less than $25,000
RBC Direct Investing$9.95 flat per transaction$9.95 flat per transactionNo Fee$9.95 + $1.25/contractNo maintenance fee when you hold combined assets of $15,000 or more across all of your RBC Direct Investing accounts
Scotia iTradeMinimum $24.99 per trade to a maximum of $250 Minimum $24.99 per trade to a maximum of $250 No Fee$9.99 + $1.25/contract

TFSA – No Account Fees

RRSP – $100 if aggregate account is less than $25K and < than 12 trades/year

TD Direct Investing$9.99 Flat Fee/Per Trade$9.99 Flat Fee/Per TradeNo Fee$9.99 + $1.25 per contractIf the Investing account balance is less than $15,000, you will be charged a maintenance fee of $25 per quarter or $100 CAD annually

RBC Direct Investing and RY Stock

RBC (RY) stock has a history of great performance in the market. Despite a fall in the stock of about 2.4%, the bank has reported an increase in revenue by about 14%. RBC retains its financial positions despite the initial fall. The bank’s common equity tier 1 capital ratio retains its strength at 11.8%, which puts it at up 40 basis points year over year.

The stock is known to outperform the market with limited and lower risk compared to other stocks. It also offers the chance of a safe and continuously growing dividend.

If you are a conservative investor, you should consider buying the RY stock through RBC Direct Investing. The bank is a leading financial institution in Canada. In fact, it is one of the top two in the country. Their trades are done at reasonable prices and give good long-term returns on investments. If you are looking for a low-risk investment, buying RBC stock might be the stock for you.
The above reason is why I will be educating you on how to access RBC stock using RBC Direct Investing.

Conclusion 

There you go, that was my honest review of the RBC Direct Investing Platform. 

Like I said, if you bank with RBC for your day to day banking needs, then opening an RBC Direct Investing has its perks in terms of account maintenance fees and having everything on one platform. If you do not bank with RBC or you are still thinking of which one to choose – I’ll highly recommend checking out Questrade. They are one of Canada’s leading online discount brokerage house. 

If you really liked the RBC Direct Investing platform as such, then go ahead they are one of the most reputed banks in Canada and millions of Canadians deal with them every single day. 

If you like the content of this article and find it helpful, please share it on social media and help spread the word. Also, let me know your thoughts and comments in the comment box below. 

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RBC Direct Investing

4.1

Value For Money

4.3/5

Features & Benefits

4.0/5

Rewards

4.0/5

Pros

  • From the house of RBC, a huge brand in Canada already
  • Good Features for Online Trading
  • As a RBC user, you can avoid account fees

Cons

  • High Maintenance Fees
  • RBC Direct Investing covers only US and Canadian markets
  • Pricing is high compared to Questrade/Wealthsimple

Sagar Sridhar

Sagar Sridhar is a personal finance blogger from Canada. His genuine passion for personal finance coupled with his unique style of writing is what stands out. Professionally, he is a computer engineer, agile certified and has a master's degree in Project Management. His writing has been featured or quoted in the leading Canadian publications such as Credit Canada and many other personal finance publications. While he is juggling between his day job and blogging, he is the main author on this blog and has miles to go before making the final pit stop.

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