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How to Invest Online in Canada?

If you are Canadian and new to investing, you may not know how to find the best online investment platforms. The days of going to a bank or meeting an investment broker in person are over. As the world turns to digital platforms, you should consider investing online as well.

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 have to be complicated. Online investing is easy to understand and with the right platform, you can start growing your wealth!

What is an online broker?

An online broker acts as an intermediary between you and the stock market. If you use an online broker to buy and sell stocks, they transmit your orders to a market center and then you receive the shares. All your shares that are held until you sell them are in your brokerage account.

Online investment platforms are also known as “robo-advisors” or wealth management platforms.

How to choose an online brokerage 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 are charged on your online account. By keeping fees to a minimum, you will improve your returns over the long term. Questions to ask:

  • Is there a quarterly fee if you are inactive?
  • Is ETF trading commission-free?
  • Are fees waived if the account has a certain balance?

Types of investments proposed

Do online investment platforms offer various investment assets, such as ETFs and stocks? What types of accounts do they offer? Are different trading tools available, and do they have different order types (e.g., trade bans)?

Ease of use

The online investment platform must be user-friendly. Points to watch for are:

  • The trading interface must be streamlined and easy to navigate.
  • Is it too complicated to understand?
  • Does it come with a free demo that you can test before you commit?
  • Read reviews and ratings and see what other users are saying.

Mobile application

Not all brokers in Canada offer a mobile application to their users. This includes major Canadian banks such as National Bank and HSBC.

Customer Service

Support should be available to you when you need it. Customer support should be easily accessible via online chat, email or phone.

Safety and security

Online safety and security are paramount when choosing an online investment platform. Check to see ifIIROC and CIPF regulate them so that you are protected in the event of an investment platform failure or fraud. Some platforms will also include two-factor authentication for added security.

Additional features

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

Which online investment platform should you use?

If you are a beginner in investing, you may feel overwhelmed by the various investment platforms available online. How do you know which one is best for you? The only way to know what best suits your preferences is to do some research.

Online investment platforms are also known as wealth management platforms or robo-advisors. Robo-advisors streamline the investment process by doing everything for you. They can recommend investment portfolios that meet your needs, automatically rebalance your portfolio if necessary and reinvest dividends while providing free financial advice.

Here is a list of some of the online platforms available to Canadians, especially beginners:

#1 : Questrade

The best online broker for beginners is Questrade. Questrade is available to all Canadian residents and has been around since 1999. This platform is user-friendly, with low fees, perfect for traders and experienced investors, and offers a variety of investment options, such as:

  • ETF
  • Forex
  • Options
  • Other investment income

Transaction Fee: 1 cent per share, with a minimum of $4.95 per transaction and a maximum of $9.95 per transaction.

Minimum investment: $1,000

#2: Wealthsimple Trade

Wealthsimple Trade is the only commission-free stock trading platform in Canada and is perfect for beginners.

Transaction 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 freely with their new mobile app.

Transaction Fee: 1 cent per share, with a minimum of $1.99 per transaction and a maximum of $7.99 per transaction. Active traders only pay a flat fee of $3.99 per trade.

#4: Qtrade Investor

As an independent brokerage platform, Qtrade Investor offers the ability to trade stocks, options, ETFs, bonds, etc. They offer investors between the ages of 18 and 30 the opportunity to trade at $7.75 per share, with a minimum contribution of $50 per month to qualify.

Transaction fee: $8.75 per transaction minimum, $6.95 for active investors.

How to start investing online

Now that you’ve researched your options and decided which wealth management platform to use, it’s time to start investing.

Here are the next steps to take to start your online investing journey.

Open an account online

After choosing the platform to use, it’s time to open an account. You’ll need to research what you want to invest in, what stocks to buy, and how you’ll diversify your portfolio.

You’ll notice that Canadian online brokerage platforms differ from independent executing brokers, as well as from large 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 is granted tax-deferred or tax-sheltered status by the government. Tax is not payable on income prior to withdrawal.

Non-registered account: A non-registered account is a general investment account that requires you to pay taxes each year on the income in the account. You will be able to invest in a wide range of assets.

The commonly used registered accounts are as follows:

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

Shares may also be placed in a non-registered account for business or personal use.

Funding your investment account

If you use an online broker, you will find that it is easy to fund your account. Funds can be transferred to your online investment account in seconds with the click of a mouse. In other cases, it may take a few days to transfer funds to your investment account.

You have three options for funding your account:

  1. Funding as needed – You can fund your account by transferring money via services such as Interac e-Transfer.
  2. Automated Scheduled Payments – You can schedule weekly, bi-weekly or monthly deposits from your personal account to your online investment account. This payment method will allow you to maintain the consistency of your investments.
  3. Deposits by cheque or bank draft – You can make deposits by cheque or bank draft, but it may take longer to clear the funds in your investment account.

Whatever payment method you prefer, check with the wealth management platform you choose to use to see if they accept your form of deposit.

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 buy individual shares, you will only need enough money to make the purchase.

Start investing online today

There’s no better time than the present to begin your journey into the world of investing. Online investing may seem complicated, but these platforms are designed for the non-tech-savvy, and you don’t need a lot of money to start investing. Every dollar counts when you’re considering long-term investing.

Robo-advisors are your alternative brokers and help you with all your investment needs. By automating your account, your investments will maintain a balance that you will be happy with.

Don’t be afraid to take the first step to invest online. Canadian investment platforms have everything you need to achieve all your investment goals.

Start investing today!

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Jean-Maximilien is an expert in Canada and France about Loyalty programs, Credit cards and Travel. He is the Founding President of Milesopedia.

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