General & Getting Started
The first step is to define your financial goals and risk tolerance. Once you understand what you want to achieve, you can choose the right type of investment account (e.g., TFSA, RRSP) and then use our guides to select a broker that aligns with your needs.
You can start with a very small amount. Many Canadian discount brokers have no minimum deposit requirements, and with the availability of fractional shares, you can invest with as little as $1. The key is to start early and invest consistently.
A stock represents ownership in a single company. An Exchange-Traded Fund (ETF) is a collection of many different stocks or bonds bundled together, offering instant diversification. For beginners, ETFs are often a recommended starting point.
Brokers & Accounts
The CIPF is a non-profit organization that protects your assets in the event your investment dealer becomes insolvent. If your broker is an IIROC member, your account is typically protected for up to $1 million for different categories of assets. It's a crucial layer of security for Canadian investors.
A trading commission is a fee charged by a broker for executing a trade (buying or selling a stock or ETF). Some brokers charge a flat fee per trade (e.g., $4.95), while others now offer commission-free trading on certain securities. It's essential to check a broker's fee schedule before opening an account.
US Markets & Regulations
The W-8BEN is an IRS form used by non-US residents to certify their foreign status and claim any applicable tax treaty benefits. For Canadians investing in US stocks, filling out this form can reduce the withholding tax on dividends from 30% to 15%.
Currency conversion fees can be high at many brokers. One popular method to minimize them is Norbert's Gambit, which involves buying an inter-listed stock on a Canadian exchange, journaling it to a US exchange, and then selling it for US dollars. Some brokers also offer US dollar accounts to help manage currency.