No minimum amount is required to open a brokerage account in Canada. However, if the balance is less than $20,000, you will be charged $100 annually as an account fee.
Let's figure out the total expenditure and how much you actually need for opening a brokerage account in Canada.
Depending on the platform you select and the fees and commissions that apply to your account, the cost of signing up for an online trading platform will vary:
A monthly or annual account fee is typically not associated with online or mobile stock trading accounts. Higher-end trading platforms may require you to pay a maintenance fee, which is often set as a percentage of the value of your account.
Additionally, some platforms impose an inactivity fee if you don't make a specific number of trades or a minimum balance cost if your account balance is below a certain level.
Many stock trading platforms charge you a commission every time you execute a trade. However, numerous commission-free sites have started to appear in Canada in recent years.
Other sites charge commissions that are below average. If you intend to purchase and sell a lot of stocks, you should keep this in mind.
With an average commission price of $6.95 per trade, the majority of large Canadian brokerages charge between $4.95 and $9.99 for each stock trade.
Here is why it's important:
Say you wish to put $500 into a well-known stock. You have $493.05 available for investments after your trading platform deducts its $6.95 charge. That represents a loss of 1.4% right away.
Although seven dollars may not seem like much, flat-rate commissions can significantly reduce your profits, especially if you invest lesser sums of money.
The typical Canadian stock commission fee, which is $6.95 per trade, would have snatched up 6.9% of your initial investment if you had only invested $100. To break even, your investment would need to increase by at least that amount.
If your broker supports fractional investing, you can start buying stocks with as little as $1 because many Canadian brokerages don't have account minimums.
Investors can purchase portions of individual shares through fractional investment. This feature is helpful for those who desire to invest in well-known stocks but cannot afford to buy a complete share altogether.
Have you opened a brokerage account with any of the stock brokers in Canada? Feel free to share your reviews and experiences thereon.