Does Wealthsimple offer bonds? Alternatives in 2024

Bonds currently provide appealing fixed-interest returns to investors due to a high-interest rate environment in many economies, making them a hot financial product.

Wealthsimple is a Canadian broker that offers customised investment portfolios, personal portfolios (made from stocks and ETFs), and financial advisory services. They also offer a high-yield savings account, options trading, and even crypto trading and staking for 50+ crypto coins on Canada’s first regulated crypto platform. In this article, we uncover the availability of Bonds on Wealthsimple and provide alternatives for investing in bonds. Keep reading!

Can you buy bonds on Wealthsimple?

Unfortunately, Wealthsimple does not offer the possibility to invest in individual bonds. However, users can still invest in bond ETFs. That means you can buy a passive fund (ETF) consisting of many bonds but not individual ones.

Each approach has pros and cons, with ETFs being an excellent risk diversifier but carrying a small management fee (contained in TER – Total Expense Ratio) and being sensitive to future interest rate changes.

Buying individual bonds gives you a stable and predictable income. Still, there is always the risk of the bond issuer defaulting and/or price drops if selling the bond before maturity.

If you are looking for an alternative platform in Canada that allows you to buy individual bonds, we have you covered. Below we will go through our top picks of brokers that offer individual bonds, among other products:

Best Wealthsimple alternatives for investing in bonds

Having been around since 1978 and surviving multiple financial crises, the Interactive Brokers’ major advantage is its reputation. It is also publicly listed on the NASDAQ exchange (ticker: IBKR), making it more regulated than some other platforms.

Bond selection is wide, with U.S., Canadian, U.K., European, and Hong Kong bonds. The bond trading fees range from $1 (corporate, municipal) to $5 (treasuries) minimum for U.S. bonds, although this number rises with larger trading volumes.

Other significant advantages of using Interactive Brokers are its wide selection of financial products from over 150 markets, solid trade execution (IB SmartRouting), and supporting 24 currencies in its account. There are also 100+ currency pairs available for exchange.

Some downsides of using Interactive Brokers are its complex fee structure, lengthier than average registration and fund deposit processes, and limited commission-free trading (only available for US investors). However, the last point is largely mitigated using narrower spreads and lower FX fees than most competitors. 

The Interactive Brokers Trader Workstation (TWS) platform offers many basic and advanced features, such as a demo account, watch lists, alerts and monitoring in real-time, advanced technical analysis tools, and more. One of the downsides of the platform is that the learning curve can be steep for beginners, even with the provided educational materials.

The IBKR GlobalTrader mobile app is a much more intuitive choice for beginner investors, offering stocks, ETFs, and options trading in a more user-friendly format. Other app features include automatic currency conversions, fractional shares (only for US stocks), and more.

Overall, Interactive Brokers is a good choice for beginners and advanced investors looking for a secure broker and access to various financial instruments, including bonds.

Offering an extensive range of financial products and low trading fees, Questrade is a popular choice among Canadian investors. The easy-to-navigate platform, commission-free ETF buying, and actively managed Questwealth Portfolios (0.20%-0.25% management fee) make the platform especially appealing to beginner investors.

Individual bond trading is commission-free for U.S. treasuries, but there is a hefty $5000 minimum per trade.

The Canadian IIROC also regulates the broker and is a member of CIPF, further boosting the safety of individual investors and their investments.

The platform offers other financial products besides ETFs, such as stocks, bonds, options, forex, mutual funds, and more. Each has its fee structure, which you can see in more detail here. Keep in mind that you could also incur some extra administrative or transaction fees and that the fees can be lower for active traders (activated when a client purchases their Advanced Data Package)

One of the possible hurdles with investing with Questrade could be a $1000 minimum deposit for regular customers. Still, that number goes down to $250 for self-directed investors aged 18-25 and First Home Savings Account investors of all ages.

Other cons of investing with Questrade include the lack of some advanced tools and poor customer service (as reported by many customers on sites such as Trustpilot).

TD Direct is one of the leading Canadian brokers regulated by IIROC, offering the CIPF investor protection scheme. It is perhaps best known for its multiple trading platforms that offer tools, resources, and analyst insights that can be tailored for investors with different levels of experience. Their educational materials are also regarded as one of the best on the market.

There is a wide range of fixed-income investments to choose from, including Canadian and U.S. bonds, money market securities, GICs, and more. Remember that their fees may vary wildly, with Canadian bonds, strip coupons, GICs, T-Bills, and other fixed-income and money market securities fees being included in the quoted price. Other fixed-income securities have high fees, starting with a $40 minimum plus an additional fee depending on the trading volume.

The TD Easy Trade™ mobile app is a simple way for beginners to start investing using an easy-to-use platform. There are no account minimums or account fees, and you also get unlimited TD ETF trades and 50 commission-free stock trades each year.

If you wish to use their TD Direct Investing account, you will get access to different account types (cash, margin, TFSA, or RSP accounts) and more financial products, including bonds and other fixed-income securities, options, mutual funds, IPOs, and gold and silver bullions. They also offer professional advisor support with their Personal Investing service.

There is no minimum deposit, but remember there is a $25 quarterly account maintenance fee if your balance exceeds $15,000. Also, keep in mind that many other banking and account fees may or may not apply to you, so be sure to check out their detailed fee structure here.

The fee structure for stocks and options differs for standard and active traders (at least 150 trades per month), with the former stock fees being $9.99 per trade and the latter being $7.00 per trade. Higher than average fees for these products and additional fees are the most significant cons of using this broker.

Founded in 2001, Qtrade is one of the leading Canadian brokers. It is regulated by the IROC and offers an investor protection scheme (CIPF). Their customer service is among the best ones on the market, according to Surviscor’s annual brokerage reviews.

Their fees are a little bit on the high side. Fees for stocks trading are set at $8.75 (or $6.95 for investors with larger accounts or who trade more frequently). Bond trading fees are set at $1 per $1,000 face values but carry a $24.99 minimum or $250 maximum.

They offer Canadian and U.S. government and corporate bonds and related products such as commercial paper, strip coupons, and treasury bills. You can also choose between 100+ commission-free ETFs, which you can find listed here.

Many users also praise the minimalistic and easy-to-use platform’s interface, the easy account opening process, and the wide choice of available research tools. However, you may find that some of the more advanced financial products are missing (compared to their competitors).

Be aware of additional fees, such as the quarterly $25 administration fee. This fee is waived, however, if you either hold $25,000, or recurrently contribute $100 or more per month, or if you make a minimum number of commissionable trades (8 in the last 12 months). 

Young investors under the age of 30 are also waived from this fee and will have access to slightly lower fees in general. You can see Qtrade’s full fee structure here.

Overall, Qtrade looks like a broker suitable for beginners, especially ones looking for ETF commission-free trading, but mostly has higher fees than most of its competitors in other areas.

What to look for in a broker that’s offering bond trading?

There are several key factors that go into the decision to choose a brokerage platform that offers bond trading:

• Platform’s overall experience and user interface: You want to ensure you are confident using the platform from start to finish. Factors like account opening, minimum deposit, user experience, available tools, etc., all come into play.
• The range of available bonds: Not all brokers offer bonds from a wide range of global markets. Make sure that the broker you choose has access to the bond markets that you’re interested in.
• Commissions: They say fees are the only 100% certain thing in investing. Needless to say, they can eat away at a large portion of our profits and it is important to keep them under control.
• Currency exchange fees: Bonds on different markets are denominated in different (most often local currencies). If you are not buying bonds in your domestic currency, you are exposing yourself to currency risk and currency exchange fees.

The bottom line

Bonds have become a more popular asset class with high-interest rates in the current market environment. Current bond yields make them attractive as an asset class with relatively limited risk and stable returns.

However, not all brokers (including Wealthsimple) offer access to individual bonds. In this article, we have highlighted some of the best alternatives available on the Canadian market. Each platform has pros and cons, so choosing the one that best suits our needs is important.

Hopefully, we helped you with your choice.