Best Bank in Canada for Investing [2024]

Summary: Choosing the best bank for investing in Canada is a crucial step in any investor’s financial journey. Among dozens of financial institutions, the Royal Bank of Canada sets itself apart as a solid choice due to its various investment options. However, if you’re looking for low-cost investing and a vast product offering, online brokerages like Interactive Brokers might be the right choice.

Best bank in Canada for investing: Royal Bank of Canada

Royal Bank of Canada (RBC) is one of Canada’s most prominent and established financial institutions. With a history spanning over a century, RBC has earned its reputation as a reliable and innovative bank. Furthermore, the bank provides a wide range of financial services, including banking, insurance, mortgages, and investment solutions.

Besides its rich history and reputation, the Royal Bank of Canada might be the best bank in Canada for investing in various markets, and here’s why:

• Diverse investment options: RBC offers a wide range of investment products, including stocks, bonds, mutual funds, exchange-traded funds (ETFs), and more;

• Research and analysis: The bank provides research reports, market insights, and economic analysis to help investors make informed decisions;

• Online and mobile tools: RBC offers online and mobile platforms that allow you to manage your investments conveniently and access real-time information;

• Global investment opportunities: RBC’s global presence and partnerships allow you to access international investment opportunities, helping you diversify your portfolio beyond the Canadian market;

• Financial stability: RBC is one of the largest and most established banks in Canada, with a long history of financial stability. This stability can be reassuring for investors concerned about the security of their investments.

Investing through RBC

One of the standout features of RBC Royal Bank is its robust investment offerings. RBC offers various investment options tailored to different risk appetites and financial goals. So, whether you’re a conservative investor looking for steady returns or a more adventurous one seeking higher potential gains, RBC has investment products to match your preferences.

RBC’s investment services include:

• Mutual funds: RBC offers a diverse selection of mutual funds managed by experienced professionals. These funds pool money from multiple investors to invest in a diversified portfolio of assets, such as stocks, bonds, and real estate;

• GICs (Guaranteed Investment Certificates): If you’re risk-averse and seek stability, GICs might be a solid option. They offer fixed interest rates and are considered low-risk investments;

• Stocks and ETFs (Exchange-Traded Funds): For those looking to directly invest in individual companies or a broad range of assets, RBC provides access to the stock market and ETFs;

Alternative to investing in Canada with RBC

Although RBC offers various investment options, it might not be the most convenient option for investors. Instead, investors with an RBC bank account can deposit their funds to standalone online brokerages for an even fitter investing experience.

Our go-to platform for investing in Canada is Interactive Brokers. Notably, IBKR is a fully licensed and regulated brokerage, and a member of the Investment Industry Regulatory Organization of Canada (IIROC) and Canadian Investor Protection Fund (CIPF).

IBKR presents itself as a convenient way of investing due to:

• Low commissions and financing rates to maximize returns;
• Global access to stocks, futures, bonds, and funds;
• No account minimum;
• Trading efficiency with advanced technology;
• Secure trading experience.

How to start investing in Canada with RBC: Step-by-step

For those interested in buying stocks in Canada or any other form of investing with an RBC bank account, this step-by-step guide will help you navigate the process with ease:

Step 1: Selecting a brokerage

RBC offers its own brokerage platform known as Direct Investing. However, it’s important to note that this platform might not be suitable for all types of investors. Some investors may find better options with standalone brokerages, which often come with advantages such as lower transaction fees and advanced trading features.

If you fall into this category, your initial task is to identify a reputable brokerage that permits deposits from an RBC bank account. Keep in mind that various options are available, each with its own pros and cons. So, take your time to evaluate these choices and choose the one that aligns with your needs.

Step 2: Opening a brokerage account

Once you’ve settled on a brokerage platform, the next step is to register and establish an account. The process for this step is generally straightforward, though it may vary slightly among different platforms. Some commonly required information includes your name, address, and Social Insurance Number (SIN).

Step 3: Funding your account

With an approved brokerage account, the next logical step is to fund it. This can be done by transferring funds from your existing RBC bank account, often accomplished with just a few clicks. Various funding options are typically provided by brokerages, including electronic funds transfer, wire transfer, and even check deposits. So, opt for the funding method that suits your preferences.

Step 4: Research and stock selection

Before making any investments, conducting thorough research is crucial. Only after comprehensive research should you proceed to select companies that you wish to invest in. The encouraging news is that most brokerages offer research tools and resources to facilitate informed decision-making.

Note that when researching, factors like the company’s financial performance, industry trends, and growth potential should all be carefully considered. After conducting your research, prepare a list of companies that catch your interest, which will allow you to monitor their performance over time.

Step 5: Placing your order

With your sights set on a company to invest in, the following step is to place an order. So, once you log into your brokerage account, navigate the trading platform and enter the ticker symbol for the desired company.

You’ll have the option to choose between various order types:

• Market order: This involves buying at the prevailing market price;
• Limit order: Specify a particular price at which you’re willing to purchase the stock.

What to avoid when investing in Canada

While RBC Royal Bank offers a solid platform for investing, there are common mistakes that all investors should avoid:

• Overlooking fees: Every investment comes with associated fees. You should, therefore, be sure to understand these fees and how they can impact your returns;

• Ignoring diversification: Putting all your eggs in one basket is risky. Instead, it’s key to diversify your investments across different assets to reduce potential losses;

• Making emotional decisions: Investing based on emotions can lead to poor decisions. So, stick to your strategy and avoid reacting impulsively to market fluctuations;

• Chasing fads: Don’t fall for investment trends without proper research. The thing is—what’s popular today might not yield long-term gains;

• Neglecting research: Always do your homework before investing, as understanding the assets you’re investing in can lead to better decisions.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

FAQs

Is there a minimum amount required to start investing with RBC Royal Bank?

The minimum investment amount varies depending on the type of investment you choose. Some mutual funds may have minimum initial investment requirements, while GICs might have lower entry points.

Can I access my investments online?

Yes, RBC offers online access to your investments through its digital banking platform. You can monitor your portfolio, make adjustments, and track performance conveniently.

Are there tax implications for my investments?

Yes, investments can have tax implications. Some gains may be taxable, while certain accounts, like Registered Retirement Savings Plans (RRSPs) and Tax-Free Savings Accounts (TFSAs), offer tax advantages.