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How to Invest Online in Canada?

If you’re Canadian and new to investing, you might not know how to go about finding the best online investing platforms. Gone are the times where we would need to walk into a bank or have a face-to-face meeting with an investment broker. With the whole world moving over to digitized platforms for everything, you should consider investing online, too. Online investing in Canada has become easier to manage, and all you need is a goal and as little as $100 to get started. Your investment journey doesn’t need to be complicated. Online investing is easy to understand, and with the right platform, you can begin to grow your wealth!

What is an online broker?

An online broker serves as an intermediary linking you to the stock market. When using an online broker to buy and sell stock shares, they will direct your orders to a market center, and then you get the shares. All your shares that get held until you sell are in your brokerage account. Online investment platforms are also known as robo advisors or wealth management platforms.

How to Choose an Online Broker Platform

Minimum deposit amount

Find out what is the minimum amount you need to start investing online.

Commissions and fees

Analyze the fees and commissions that get charged to your online account. By keeping fees to a minimum, you will improve your returns over the long term. Questions to ask:

  • Are there quarterly fees if you’re inactive?
  • Is commission-free ETF trading offered?
  • Do fees get waived if there’s a specific account balance?

Types of Investments on Offer

Do online investment platforms offer various investment assets, such as ETFs and stocks? What type of accounts are provided by them? Are there various trading tools available, and do they have order types (e.g., stop orders)?

Ease of use

The online investment platform must be user-friendly. Things to look out for include:

  • The trading interface needs to be streamlined and easy to navigate.
  • Is it too complicated to understand?
  • Does it come with a free demo for you to test before committing to them specifically?
  • Read the reviews and ratings and see what other users are saying.

Mobile app

Not every broker in Canada offers a mobile app to their users. This includes major Canadian banks such as National Bank and HSBC.

Customer service

There should be support available for you when you need it. Customer support should be easily reachable through either online chat, email, or phone.

Safety and security

Online safety and security are paramount when choosing an online investment platform. Check if IIROC and CIPF regulate them so that you’re protected should the investment platform go bankrupt or if there’s a fraud. Some platforms will also include two-factor authentication for added security.

Additional features

It can be convenient if you have all your investments together in one place. Look for an online platform that provides all your investment needs, such as high-interest savings, portfolio management, and investing.

Which Online Investing Platform Should You Use?

If you’re a beginner at investing, you might be feeling overwhelmed with all the various investment platforms available online. How do you know which one is best for you? The only way you will know which is best for your preferences is by researching them. Online investing platforms are also known as wealth management platforms or robo advisors. Robo advisors streamline investment processes by doing everything for you. They can recommend investment portfolios that meet your needs, rebalances your portfolio automatically when necessary and reinvest dividends while providing financial advice for free. Here’s a list of a few online platforms available to Canadians, especially beginners:

#1: Questrade

The best online broker for newbies has to be Questrade. Questrade gets offered to all Canadian residents and has been around since 1999. They’re user-friendly with low fees, perfect for seasoned traders and investors, with a variety of investment options, such as:

  • ETFs
  • Forex
  • Options
  • Other investment products

Trading fees: 1 cent per stock, with a minimum of $4.95 per trade and a maximum of $9.95 per trade. Minimum investment: $1,000

#2: Wealthsimple Trade

Wealthsimple Trade is the only commission-free stock trading platform in Canada and is perfect for beginners. Trading fees: Zero ($0) Minimum investment: None

#3: Virtual Brokers

A division of CI Investment Services, Inc (formerly BBS Securities, Inc), Virtual Brokers offers trading in ETFs, bonds, and stocks on various other trading platforms. Trade on the go with their new mobile app. Trading fees: 1 cent per share, with a minimum of $1.99 per trade and a maximum of $7.99 per trade. Active traders only pay a flat fee of $3.99 per trade.

#4: Qtrade Investor

As an independent brokerage platform, Qtrade Investor offers trading in stocks, options, ETFs, bonds, etc. They offer investors between 18 and 30 years old the opportunity to trade at $7.75 per stock, with a minimum of $50 a month contribution to qualify. Trading fees: $8.75 per trade minimum, $6.95 for active investors

How to Start Investing Online

Now that you’ve researched the options available to you and you’ve decided which wealth management platform to use, it’s time to start investing. Here are the next steps to take to begin your journey of online investing.

Open an online account

After selecting which platform to use, it’s time to open an account. You’ll need to do your research on what you want to invest in, which stocks to buy, and how you’re going to diversify your portfolio. You’ll notice that Canadian online brokerage platforms differ from independent discount brokers, as well as major banks that own brokerage firms.

Choose your investments

As a Canadian, you can invest in registered or non-registered accounts. Registered account: A registered account is an investment account that the government gives tax-deferred or tax-sheltered status. Tax is not payable on earned income until withdrawal. Non-registered account: A non-registered account is general investment accounts that require you to pay taxes yearly on the account’s income. You will be able to invest in a broad range of assets. Commonly used registered accounts include:

  • Registered Retirement Savings Plan (RRSP)
  • Tax-Free Savings Account (TFSA)
  • Registered Education Savings Plan (RESP)

Stocks can also get invested into a non-registered account for business or personal purposes.

Fund your investment account

When using an online broker, you’ll find that it’s easy to fund your account. Funds can be transferred to your online investment account within seconds at the click of a mouse. In other instances, transferring funds to your investment account can take a few days to reflect. There are three options when funding your account:

  1. Funding as you need the funds – You can fund your account by transferring money via services such as Interac e-Transfer.
  2. Automated scheduled payments – You can schedule deposits weekly, bi-weekly, or monthly from your personal account to your online investment account. This payment method will keep your investing consistent.
  3. Deposits via cheque or bank draft – You can make deposits using cheques or bank drafts, but it could take longer for the funds to clear into your investment account.

Whichever payment method you prefer, check with the wealth management platform you have chosen to use to determine if they accept your form of deposits.

You can start small

There are investment platforms and robo advisors that require minimum balances of up to $5,000 before you can start investing money. If you’re buying single stocks, you’ll only need enough money to make the purchase.

Start Investing Online Today

There’s no moment like the present to start your investment journey. Online investing may seem complicated, but these platforms get designed for those who aren’t tech-savvy, and you don’t need lots of money to start investing. Every dollar counts when you look at investing for the long-term. Robo advisors are your broker alternatives and help you with all your investment needs. Due to automating your account, your investments will maintain a balance you’ll be excited about. Don’t be scared to take the first step in investing online. Canadian investment platforms have everything you need to reach all your investing goals. Start investing today!

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