Investing 101: A newcomer's guide to investing in Canada

When you’re new to Canada, learning how to make your money grow can help you feel more confident and secure about your future.

While keeping your savings in a regular bank account may seem safer, you can miss out on opportunities to grow your money over time and help achieve your financial goals.

Investing gives your money the chance to grow, which can help you reach bigger goals in the future.

You don’t need a lot of money to start investing. Even small, consistent investments can grow into something meaningful. Starting early — even with just $100 a month — can make a big difference in the long run.

Investing can help you:

• Save for retirement
• Grow a down payment for a home
• Help fund your children’s education
• Create long-term financial stability
  

What newcomers need to start investing

Before you open an investment account, you’ll need the following:

• A valid Social Insurance Number (SIN)
• A Canadian address
• To be the age of majority in your province or territory
• Canadian tax residency (for registered plans like RRSPs and TFSAs)
  
  

Most people also link a Canadian bank account to fund their investments. You don’t need to be a Canadian citizen to invest, but you do need to meet residency and tax requirements.

Get started with the TD New to Canada Banking package with perks and bonuses
 

Before investing

Before you invest, it helps to get your money in order. This means making sure you can cover your daily costs, have some savings for emergencies, and know what level of risk feels right for you.

Make sure you have:

• A steady source of income: Know what you need to cover the costs of living
• A clear monthly budget: Know how much you can set aside regularly.
• An emergency fund: Money in an account covering 3 to 6 months of expenses
• A timeline: Short-term savings are often placed in more stable options, while long-term goals may allow for more ups and downs depending on your personal risk tolerance.
• Goals: Are you saving for a home, retirement, or your child’s education?
• An understanding of the associated risks: Some investments can change in value day to day. Think about what feels right for you.

People often think about investments in layers of risk. 

Here are some examples, from low risk to higher risk:

• High-interest savings accounts are types of accounts that hold your money with a better interest rate than a chequing account, and you can withdraw your money whenever you need it.
• Guaranteed Investment Certificates (GICs) are considered lower risk because your principal is protected and your interest rate is guaranteed — as long as you leave the money invested for the full term.
• Exchange-Traded Funds (ETFs) spread money across many investments, which can reduce risk compared to buying just one stock, helping to manage the ups and downs of any one stock.
• Mutual funds pool money across many investments and are professionally managed. They often include built-in advice and ongoing support, which may result in higher fees than do-it-yourself investment options.
• Buying a single company’s stock is generally considered riskier because its value can vary greatly from day to day.
  
  

Where to invest money in Canada | Accounts

Canada offers accounts with tax advantages as well as non-registered accounts.

Registered plans (like TFSA, RRSP, RESP, and FHSA) are government-approved and come with tax advantages. They often have rules on how much you can put in and when you can take money out.

Non-registered accounts don’t have these tax advantages or limits. You can invest as much as you want and take money out anytime, but you’ll need to pay tax on any growth.

Below are summaries of each:
 

Tax-Free Savings Account (TFSA)

• What it is: A government-registered account that lets you save or invest money for short- or long-term goals, with tax-free growth.
• Who it’s for: Canadian residents 18 or older with a valid SIN who want to save or invest for short- or long-term goals.
• Why it’s helpful: Investments inside the account — such as interest, dividends or capital gains — can grow tax-free, even when you withdraw the money.
  

Learn more about opening and investing in a TFSA

Open account
 

Registered Retirement Savings Plan (RRSP)

• What it is: A government-registered account designed to help you save for retirement
• Who it’s for: Canadian residents for tax purposes who are the age of majority in their province and have earned income in Canada to build RRSP contribution room.
• Why it’s helpful: Contributions lower your taxable income today, and investments inside the account — such as interest, dividends or capital gains — grow tax-deferred until you withdraw them. In some cases, you may also be able to withdraw funds from your RRSP through programs like the Home Buyers’ Plan or Lifelong Learning Plan, subject to eligibility and repayment rules.

Learn more about investing in an RRSP. We also offer a video that gives a quick comparison of the TFSA and RRSP to help you choose the best option for yourself.

Apply for an RRSP online
 

Registered Education Savings Plan (RESP)

• What it is: A government-registered account that helps families save for a child’s post-secondary education.
• Who it’s for: Anyone — including parents, guardians, relatives or friends — who wants to save for a child’s future post-secondary education.
• Why it’s helpful: The government adds grants, and investments inside the account can grow tax-deferred until the funds are withdrawn for education expenses.
  

Read more about investing in a RESP

Book an appointment to open a RESP today
 

First Home Savings Account (FHSA)

• What it is: A government-registered account created to help you save for your first home in Canada.
• Why it’s helpful: Contributions are tax-deductible (like an RRSP), and investments inside the account can grow tax-free when withdrawn to buy your first home (like a TFSA).
• Who it’s for: Canadian residents for tax purposes who are the age of majority in their province, have a valid SIN, and are first-time homebuyers saving for their first home in Canada.

Read more about investing in a FHSA

Apply for a FHSA online
 

How to manage your investments in Canada

• Robo-advisors: For a small percentage-based fee, you can automate your investments and build a portfolio based on your goals with TD Automated Investing.
• Self-directed investing: You choose and manage everything yourself - what accounts you’ll use and what stocks, ETFs, or mutual funds to buy. TD offers two trading platforms: TD Easy Trade for beginners and TD Direct Investing for more experienced traders.
• Personal bankers: Offer guidance for a fee, usually a percentage of your investments.
  • You can speak with a personal banker at your local TD branch for everyday investing needs.
  • For more personalized support — including retirement planning, tax strategies and managing larger portfolios — TD Wealth advisors can help build a long-term plan that fits your goals.