NEW TO INVESTING
Signing up with Questrade
So you’ve finally decided on a broker – great! The next step is to open an account with that broker. For purposes of this tutorial, I will walk you through the steps of opening an account with Questrade. As mentioned previously, Questrade offers free ETF trading and a competitively-priced, flat commission fee of $4.95 per trade otherwise. Combined with an intuitive user interface and helpful online tools, Questrade is a great option for those new to investing. If you have decided on Questrade, head on over to their website to begin.
Start by clicking the “Open an Account” at the top of the webpage.
At this point you will be prompted to enter your name, email and phone number.
You will then be prompted to create a username which will be used as your main login information. This username can be changed at a later date – no need to stress over this!
To keep your account safe, select security questions that would be tough to crack. Just remember – this account will contain your hard-earned money!
You’ve successfully signed up with Questrade! You will receive a confirmation page stating that you have successfully signed up.
Opening a Questrade Account
The next step involves you entering what your country of residence is and then selecting what account you would like to open. This step confuses most new investors as you are hit with options that may not be familiar to you. Here you are presented with the option to open a “Self-directed” account or a “Managed” account. A self-directed account is an account solely managed by you. You will decide what holdings (companies) are in your portfolio and you will have complete control over the account. A managed account is one that is professionally managed by Questrade staff. This option comes at a cost (minimum $99/year management fee) but removes essentially all of the decision-making work from the end-user (you). In my personal opinion, the “Self-directed” option gives you the best bang for your buck & provides you the most control over your money.
One important thing to remember is: once you open an account, you have no obligation to continue using that account. If you find you are uncomfortable trading under a self-directed account, you can at any time either close an existing account or open a new account (a managed account, perhaps!). Don’t feel like once you decide on one account or the other that you can’t go back.
Below you will see that when you select “Self-directed” you are prompted with different types of self-directed accounts. Margin accounts are non-registered accounts. This means that all applicable tax laws to capital gains and dividends apply to your investments. There is no maximum contribution limit to a non-registered account. Registered & TFSA accounts are tax-deferred or tax-free accounts. The two most common registered accounts are the RRSP (Registered Retirement Savings Plan) and TFSA (Tax Free Savings Account). It is important to note that each of these registered accounts has yearly contribution limits. Before opening a non-registered account, it is generally recommended that you max out both your TFSA & RRSP (if possible).
Once you have selected the type of account you would like to open, there is a prompt asking you whether you want to trade options or not. Options are essentially an agreement between two investors (a buyer and a seller) to buy or sell an asset for an agreed upon price on or before a pre-determined date. Options can be risky if you do not understand what you are buying or selling, but they are a very popular investing strategy for many investors. Regardless of what you select right now, this decision can always be changed later in your account settings.
Before you open your account, ensure you use the following offer / promo code to get $50 when joining! This money will be available for you to trade with once you get around to it. Confirm you have read the terms and conditions before hitting Save & Continue.
The ‘Participants’ screen allows you to add other authorized traders to your account, along with a guarantor. These are optional requirements – again, these can be updated at any time later on once your account has been created.
The ‘My Profile’ and ‘Job/Affiliation’ screens contains the bulk of personal information that is required to open a brokerage account. Whether you decide to open a brokerage account with Questrade or not, this information will be required regardless. I would recommend using your SIN for identification purposes. If you decide otherwise, you will need to attach photo ID of some sort, whether it be your driver’s license, passport, etc.
The ‘Financials’ screen contains questions pertaining to your annual salary, assets and liabilities. This is used to calculate a vague net worth value for each client to comply with government laws and regulations.
The ‘Agreements’ screen, as you can imagine, has a number of agreements that you should read through. These are not too long, and it is a good idea to actually read through them (or skim through them at least). See below for the selections I made to the shareholder communications. For Part 1: Disclosure of beneficial ownership, I would recommend not objecting to any disclosure as this can end up costing you money if you object. For Part 2: Security holder materials, I personally do not want to receive materials in the mail. I typically do all my research on the companies I invest in online and therefore I see no need to receive duplication in the mail as hard copies. This selection would ultimately depend on your personal preference.
Additional Documents & Funding your Account
After you have reviewed that all of the information you have included in your application is correct, you can move into the final stages of completing your application. You will be prompted to provide two separate identification requirements – Valid photo ID and bank verification. Both of these steps can be completed in the matter of a few minutes. Before you can do this, be sure to e-sign the two documents regarding the terms and conditions around your account. I would highly recommend reading through the Statement of Acceptance. Once you have initialed & signed off on the documents, click Finish at the bottom. You will be logged out. Log back in and you will see that ‘Statement of acceptance’ has been completed and that ‘Bank Verification’ and ‘Provide Valid ID’ are now outstanding.
To provide bank verification, I found Option 2 – Bank Statement, to be the easiest method of verification. As I bank with TD, I can easily pull a statement from any month I choose via their e-Services. The same would go for any of the big banks in Canada. To provide verification, I downloaded one of my recent bank statements and uploaded it to Questrade.
To provide valid ID, I took a picture of my driver’s license with my phone and uploaded the picture to my computer. Once the file was on my computer, I uploaded it to Questrade – it is that simple.
Lastly, you need to fund your account to fully activate it. This requires a minimum transfer of $1000 to your Questrade account. You can do this through a number of ways, as seen below.
I found it easiest to transfer money from TD directly to Questrade. To do this, you need to log in to your online banking services. There will be an option to make a bill payment. Here, click ‘Add Payee’ and enter ‘Questrade’ as the payee. From the drop-down menu, select ‘Questrade Online Brokerage’. You will then be prompted to enter an account number. Use the account number that was just recently created for your new Questrade account. Once you have decided the size of your initial investment / transfer, complete the transaction.
Once you have uploaded bank verification, provided photo ID and funded your account, you must wait for all of this information to be verified. This usually takes a few days to be completed. Outside of waiting for verification, you have successfully completed your application and have now open a brokerage account! It is just a matter of time before you can finally put your money to work. To do that, let’s explore how to trade (buy and sell) stocks!
