Where to Invest Money in Canada [2024] | 5 Investment Options 

If you’re new to n the market, the world of investing can seem intimidating, complex, and even dangerous. However, if you follow some basic guidelines and learn how to approach your investments from the right angle, investing can prove to be a solid way to make additional income and meet your financial goals. In this guide, we’ll lay down some basic info on investing and offer you our top five picks on where to invest money in Canada, no matter your experience level and the size of your capital. 

Where to Invest Money in Canada

Below, we have a list of the top five assets you can invest in in Canada. Each of them has its respective advantages and disadvantages, and each comes with varying levels of risk and potential returns. 

The five best ways to invest money in Canada are:

1. Stock market;
2. Index funds and exchange-traded funds (ETFs);
3. Bonds;
4. Commodities;
5. Crypto.

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1. Stock market

When you invest in stocks, you invest in ownership stakes in publicly traded companies listed on the Toronto Stock Exchange (TSE). By becoming a shareholder and owning stocks, you become entitled to voting rights proportionate to the number of shares you bought. Moreover, you have a chance to receive dividends, i.e., profits the company distributes to shareholders over time, which is a nice way to earn some extra passive income.

The best Canadian stocks to buy in 2024

Some of the most sought-after stocks in Canada to buy in 2024 include:

1. TELUS (TSX: T): One of the largest internet providers in the country, worth $26.45 billion;
2. Royal Bank of Canada (TSX: RY): The largest Canadian bank worth over $2 trillion as of 2023;
3. Alimentation Couche-Tard (TSX: ATD): A convenience store chain with over 12,000 physical stores across the country;
4. Canadian Natural Resources (TSX: CNQ): An oil and natural gas company;
5. TMX Group (TSX: X): The financial services company responsible for the machinery used by the Toronto Stock Exchange itself.

Other popular options include:

1. Tim Hortons (TSX: QSR);
2. Lululemon (NASDAQ: LULU);
3. Enbridge (NYSE: ENB);
4. Dollarama (TSE: DOL);
5. WestJet (TSX: ONEX).

Where to buy stocks

Our recommended broker is Interactive Brokers (IB), a regulated and convenient online exchange with over 2 million registered users trading every day. IB holds licenses issued by the US Securities and Exchange Commission (SEC), National Futures Association (NFA), and Commodity Futures Trading Commission (CFTC). In addition, IB offers features such as:

• Commission-free stock trading;
• Global stock-trading on 90+ market centers;
• Fractional shares;
• No minimum deposits;
• Additional income on fully paid shares;
• Lowest financing rates for margin accounts.

Pros and cons of investing in the Canadian stock market

2. Index funds and ETFs

If buying individual stocks is not appealing, you have the option of investing in various types of funds and ETFs. In essence, funds are a collection of stocks and bonds, a diversified basket of assets, if you will. When you invest in a fund, you gain exposure to a portion of that basket as one of its owners.

Funds can suit both active and passive investors relying on a buy-and-hold strategy. Passive funds are typically projected to track an external index or benchmark and make a profit by mirroring its performance. On the other hand, active funds strive to outperform the market.

Pros and cons of investing in index funds and ETFs in Canada

3. Bonds

Bonds are debt securities issued by corporations or the government itself. When you invest in a bond, you are essentially lending money to those who issued it. In return, they pay you periodic interest, usually semi-annually. Naturally, you receive the initial investment amount back as well.

Compared to stocks, bonds generally are less volatile. Moreover, some bonds show a negative correlation with stocks. In other words, when stock prices go down, bonds sometimes go up. Consequently, bonds are often used as a portfolio diversification. 

Pros and cons of investing in bonds in Canada

4. Commodities

Commodities are a broad asset category that comprises a wide range of goods considered vital to the economy at large, including products such as coffee, cocoa, rice, oil and natural gas, as well as precious metals like gold and silver, etc.

While commodities are a good way to diversify your portfolio, they can be quite volatile, so they are usually not a great short-term solution. A positive side, however, is that they do not depend on stocks or bonds, so you can often rely on them as a hedge against inflation, too.

Pros and cons of investing in commodities in Canada

5. Crypto

Cryptocurrencies are digital tokens built on decentralized networks called blockchains. Although a very popular investment option, cryptocurrencies are known for their high volatility, so they usually appeal to investors with a higher risk tolerance.

Even though it is relatively new, the cryptocurrency market numbers thousands of different digital currencies and tokens. Some of the most popular and widely recognized coins and tokens include Bitcoin (BTC) and Ethereum (ETH). 

Some less-known coins are often referred to as “altcoins”. There are also “stablecoins”, whose aim it is to maintain a stable value by being tied to another asset.

Pros and cons of investing in crypto in Canada

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Where to invest money in Canada safely 

Never invest without a clear plan in mind, and, more importantly, never invest if you are not in the position to do so. To make sure you are ready to venture into the world of investing, make sure you:

• Create an emergency fund: No matter how large your capital, it is always wise to put a portion of your funds aside as an emergency fund;
• Pay off all your debts: Investing is a terrific way to make a profit, but the general rule is that you should only invest what you can afford to lose. If you have any debts, pay them off before purchasing stocks, bonds, and other assets. Relying on highly volatile markets for quick gains and a way out of debt is not wise;
• Figure out your risk levels: Investments are risky by definition. No matter how much money you are working with and what kind of asset you are investing in, always know how much risk you are willing to take to avoid any surprises down the line;
• Do research: Some markets, for example, crypto, can be highly unregulated, so be sure you do your research. 

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

FAQs about where to invest money in Canada

Where to invest money in Canada for maximum returns?

Where to invest money in Canada will depend on your financial goals. You can invest in stocks, bonds, funds, and other assets available on online exchanges such as Interactive Brokers.

Should I invest money in Canada?

Whether you should invest money will depend on several factors. Those include your risk tolerance, financial situations, financial goals, etc.

Is investing money in Canada safe?

Investing is relatively safe if you do it through a regulated broker such as Interactive Brokers. Note that profits are never guaranteed, so only invest what you can afford to lose, especially if you are investing in volatile markets, such as crypto.

How much money do I need to start investing in Canada?

You can start investing with smaller and larger sums. The precise amount can vary widely depending on the type of investment you are considering and your financial goals.