Questrade is one of the most popular online brokerages available to Canadian investors. In this post, we’ll cover the available Questrade non-registered accounts offering.
Have you maximized your registered account contribution rooms? Savings for short term financial goals? Or want to trade using more advanced strategies? It may be time to open a non-registered account.
Let’s start…
What are Non-Registered Investment Accounts?
Non-registered investment accounts are a type of investment account without the tax deferral or tax-free growth that comes with registered accounts.
They are also known as taxable accounts because any gains or income earned on the investments will be taxed in the year they are made.
Non-Registered vs Registered Accounts
The main difference between a registered and non-registered account is how the returns are taxed. But there are important differences between the two.
Contribution Room and limit: Due to their tax-advantages, there are limits to how much you can put in registered accounts. These could be lifetime limits like with RESP or annual limits like TFSA and RRSP. Non-registered accounts don’t have this restriction. You can contribute as much as you like
Portfolio Maintenance: Non-registered accounts generally require more effort and time to manage. For example, you’ll need to track all your purchases and sales to properly calculate your adjusted cost base (ACB) to determine your capital gains/loss
Qualified Investments: There are some restrictions on the type of investment you can hold in registered accounts, called qualified investments. But you can invest in any type of investment on any exchange with non-registered accounts.
Examples of registered accounts are Registered Education Savings Plan (RESP), Tax-Free Savings Account (TFSA), Registered Retirement Savings Plan (RRSP) and so on.
Related Post: Best Investments for Non-Registered accounts
Questrade Non-Registered Accounts Types
Questrade has several account types across both registered and non-registered accounts.
The available non-registered accounts include:
Questrade Margin Account
It is available as Individual Margin or Joint Margin that can be opened with a spouse, friend or trusted partner.
The Questrade Margin account provides more flexibility in the types of assets you can own or trade. Want to trade options, including more advanced option strategies like Straddle, Strangle etc? The Margin account lets you do just that.
Also, you’ll be able to use the investments in your other accounts to increase your buying power.
Questrade does not have a regular Cash trading account for self-directed accounts. So if you’re not comfortable with using margin to trade, simply use the account like a normal cash account by only investing with the cash you have in it. Or go with Questwealth Portfolio option
Questrade Cash Account
Cash accounts are only available for Questrade’s managed accounts – Questwealth. The available variants are Individual, Joint Cash or Corporate Cash.
For individuals, these can be used for both short or long-term goals or when you’ve maximized your registered accounts limits. The Corporate Cash is a smart way to earn some money on excess capital for a company.
Questrade Trust Accounts
There are 3 available trust accounts at Questrade – Individual informal trust, Joint informal trust and Formal Trust accounts.
With the informal trusts, formal agreements or documentations are not requirement. But trust agreements are required for a Formal Trust account.
A trust investment account allows you to invest for anyone including your children.
Questrade Forex & CFDs
For more experienced investors, the account lets you trade forex and contracts for difference. You get access to the global market and can trade 24/7.
Questrade Forex and CFDs account is also available as an Individual and Joint account.
Entity Accounts
These includes investment accounts for Corporate, Sole Proprietorship, Partnership and Investment Clubs.
How to Open Non-registered Accounts at Questrade
To get started, click here or the button below to open a new Questrade non-registered self-directed account. Or here for the managed Questwealth accounts.
You’ll get a $50 trade rebate using this Questrade offer code “WALLETBLISS”. Or $10,000 managed free for the first year if you open a managed account.
Then, select the account type you wish to open and complete the registration process.
Note that the required documents will vary depending on the type of account you’re opening.
For example, you’ll need to provide trust agreements for a Formal Trust in additional to the other basic documents like ID and proof of address.
If you’re transferring your account from another brokerage or financial institution, Questrade will cover the fees up to $150 per account.
Related Post: TFSA and RRSP Transfer Fees
Questrade Non-registered Account fees
The fees depend on whether you open a managed or self-directed account:
For managed accounts (Questwealth Portfolios), the management fees start at 0.25% for assets below $100,000 but drops to 0.20% for higher assets.
For self-directed, the applicable trading fees are:
- Stocks: 1 cents/ share; minimum of $4.95 to max of $9.95
- ETFs: Free to buy but min of $4.95 to buy and capped at $9.95
- Options: $9.95 + $1/contract
- FX & CFDs: spreads as low as 0.08pips
Related Post: Questrade Withdrawal Fees
Non-Registered Accounts Tax Implications
All the returns made on non-registered accounts are taxable in the same year they are earned. But the tax effect or how much you’ll pay depends on a number of factors such as:
- Your marginal tax rate which depends on your total income for the year and your province
- The type of investments and
- the returns you had
The first one is obvious. The higher your marginal tax rate, the higher the tax you’ll pay an each additional $1 income.
For the last 2, the type of returns you get will vary depending on the type of investments. Bonds and GICs will pay interest that are fully taxed at your marginal tax rate, while dividends from equities have better tax advantages.
And if you sell your equities or bonds at a profit, only 50% of the gains will be taxed.
Learn more about the tax effect of different investment types here.
Wealthsimple Non-registered Account
Wealthsimple also has a non-registered account that is available as personal or joint. There’s also a corporate account to manage your business’ excess funds.
Compared to Questrade, the account options are limited. For example, there are no Trust accounts or FX.
But there’s Wealthsimple Crypto for cryptocurrencies trading which isn’t available at Questrade.
What about non-registered accounts at Wealthsimple Trade?
Wealthsimple Trade’s personal account is a non-registered (taxable) account. It is a great option for both new and experienced investors that want to trade Canadian shares.
Both buys and sells are completely commission free. They only make money through currency conversion spreads when users buy/sell USD stocks.
FAQs: Questrade Non-Registered Accounts
Yes, Questrade offers a wide range of accounts for both registered and non-registered accounts.
You need a minimum of $1,000 before you can start investing in any of Questrade accounts. If you want to start with smaller amounts, you can consider brokerages like Wealthsimple Trade that let’s you start with as little as $1.
