Questrade vs Interactive Brokers

When it comes to the showdown between Questrade and Interactive Brokers my analysis and answer might surprise you! Canadian DIY investors are spoiled for choice these days, and while both of these brokerages rank amongst Canada’s best online brokers, I personally have decided to go in another direction all together.

Questrade has been a favorite among Canadian DIY investors for years due to its competitive pricing.

Interactive Brokers on the other hand brings to the table its global trading reach and sophisticated tools that cater to the more experienced investors among us. Think of it as your passport to international markets.

Choosing between Interactive Brokers and Questrade isn’t just about fees or access. It’s about aligning with a platform that mirrors your investment style and goals. Check out my Questrade vs Interactive Brokers quick comparison chart below to see how the two companies stack up relative to my personal choice.

Questrade vs Interactive Brokers Comparison Chart

Canadian ETFs	$1 CAD minimum, maximum of .5% of total purchase or sell value	Free buying of ETFs, BUT does charge the normal trading fee to sell ETFs.
User Experience	Mediocre at best. Aimed at professional stock traders. Good value if you need day trading platforms, and rarely need questions answered.	Has made big gains over the last three years, rated just behind Qtrade by most publications.
Option Trading Fees	$2 + $0.80/contract	$4.95 + $0.75 contract
Foreign Exchange Capability	#1 in World	None (other than CAD to USD).
RESP Accounts	Not Available	Available
Safety	CIPF Member	CIPF Member
promotion	None	$50 in Free Trades
Sign Up	Visit Interactive	Visit Questrade

Questrade vs Interactive Brokers Trading Fees

Interactive brokers has earned a reputation worldwide as one of the cheapest international brokerages to trade with. It also has low margin rates if you want to buy and sell with money that you borrow from IBKR (just watch out for margin calls that can force you to sell your investments at the worst times).

The lack of free ETF trades and having no RESP or RRIF options kills any trading fee advantage in the Interactive Brokers Canada vs Questrade battle for your investing dollars.

The Better Choice for You

In looking at the Interactive Brokers vs Questrade discount brokerage comparison, the key takeaway should be to apply the differences to your specific situation and trading needs.

Here are the key differentiation points as I see them:

1) Check out our Interactive Brokers Canada review and make sure that you’re ok with possible American inheritance tax laws being applied. For me, this along with the RESP + RRIF advantage, makes it pretty easy to choose Questrade over IBKR Canada.

2) Options trading is definitely a highlight for IBKR. Their lower options trading fees and access to niche markets give them an advantage in this area.

3) Do you want to open an RESP or RRIF account – now or in the future?  These are two of the most popular investing accounts for Canadians, and pretty much every Canada-based broker offers them. The thing is, IBKR isn’t Canada-based, and consequently, doesn’t offer these brokerage accounts.

4) Do you like to borrow money in order to invest? Most Canadians don’t “trade on the margin” with money that they are lent by their brokerage. If you do, you might want to consider the lower interest rates on loaned money that IBKR brings to the table. If you’re not sure about using “leverage” though, I wouldn’t factor this in.

5) Are currency conversion rates important to you? Norbert’s Gambit is the preferred way to exchange CAD for USD (for almost no money), but if you’re trying to trade on the London or Hong Kong stock exchanges then you’re going to need to first turn your Canadian Dollars into other currencies. Interactive Brokers has built their whole company around having the best foreign exchange services in the business.

Questrade has come a long way over the years, and their streamlined desktop/mobile upgrades have really given the company a much more user-friendly platform than Interactive Brokers. This is especially important for new investors, or folks who just want to keep life simple.

Questrade vs Interactive Brokers FAQ

The Bottom Line

For the average Canadian investor who wants to keep things simple with an online brokerage that offers the account types you are looking for at a low cost, Questrade is more likely to give you exactly what you want.

With Questrade you’ll have access to all Canadian account types such as RESP and RRIF, and that alone can save you from paying a high tax on your earnings later down the line. Plus, you’ll save money in the short run too, especially if you plan to purchase mainly ETFs, which won’t cost you a thing.

If you do happen to need more complex trading tools and options, and you want to save money on currency conversions, IBKR could be the right choice. For most Canadian investors, IBKR just won’t give you what you need at the price you want. To see how Questrade compares to another top Canadian Brokerage, Qtrade, check out our full Questrade vs Qtrade Comparison.