Putting your money in a savings account might seem a reasonable choice. But in reality, it earns next to nothing while inflation chips away at its value (in most cases).
Meanwhile, friends casually mention their stock portfolios growing, and you're left wondering how they figured it all out. It’s not that difficult. The truth is, buying stocks in Canada isn't complicated once you understand the system — but hidden currency conversion fees can wreck your returns before you even begin.
To help you out, we’ve prepped this comprehensive guide that teaches you how to:
- Preparing your finances and choosing the right account for stock investments
- Selecting a platform for buying stocks without overpaying on fees
- Simple strategies to get the most out of your stock investment
- Handling US stocks without losing money to conversion costs
- Placing your first trade stock step-by-step
Let’s explore a clear path and teach you how to buy stocks in Canada as a beginner.
TLDR — Quick skim: A roadmap for buying stocks in Canada
Getting started is straightforward once you know the steps.
- Build a starter emergency fund ($2,000) and pay off high-interest debt above 8%
- Open a TFSA at a low-cost brokerage (Questrade, Wealthsimple, or National Bank Direct Brokerage)
- Fund your account through e-Transfer (often within 30 minutes) or EFT (3-5 business days)
- Research broad-market ETFs like VFV (S&P 500) or XEQT (global stocks) for instant diversification
- Place a market order during trading hours (9:30 a.m. to 4:00 p.m. ET) and set up recurring deposits
However, an important note: Currency conversion fees when buying US stocks cost you 1.5% every time with some platforms — that's $150 on a $10,000 investment, compared to as little as $2 with the right approach.
What do you need before buying stocks in Canada?
Starting to invest requires financial stability first, as the stock market can drop 20% or more in any year, so rushing in without preparation is risky.
Getting your finances in order
The first step is to build an emergency fund before investing. While experts recommend three to six months of expenses, even $2,000 provides a cushion for unexpected costs. Keep this money in a high-interest savings account, not the market.
Moreover, pay down high-interest debt next. Credit card balances at 19% or personal loans above 8% should go first. The stock market historically returns around 8-10% annually (never guaranteed), so paying off 19% debt is an instant, guaranteed return.
Also, your timeline matters. Money you'll need within five years shouldn't go into stocks — market downturns happen, and you don't want to sell at a loss because you need cash immediately. Stock investing works best with at least a five to ten-year horizon.
Additionally, risk tolerance is personal. If watching your portfolio drop 20% makes you panic-sell, start smaller or mix in conservative investments like bonds or GICs.
Documentation and legal requirements
Opening a brokerage account requires standard documents:
- Social Insurance Number (SIN)
- Canadian bank account for transfers
- Proof of current address (utility bill or bank statement)
- Government-issued photo ID (driver's license or passport)
Identity verification often happens instantly, but deposit availability depends on your funding method. E-Transfers or instant deposits may be ready in minutes, while EFTs typically take three to seven business days before you can trade.
Which investment account should you open first?
Canada offers tax-advantaged accounts that can save you thousands over your investing lifetime. Account structure matters as much as what you buy inside it.
For most first-time investors, the TFSA makes the most sense. You avoid complexity, maintain flexibility, and keep all gains tax-free. Once you've maxed out your TFSA or if you're earning a higher income and want the immediate tax deduction, consider adding an RRSP.
Nevertheless, let’s look at each account type in detail so you’re in a better position to make the right choice:
TFSA (Tax-Free Savings Account)
The TFSA is usually the best starting point. You contribute after-tax dollars, and everything inside — capital gains, dividends, withdrawals — is completely tax-free forever.
Your contribution room accumulates every year, even if you don't open an account. For 2025, the annual limit is $7,000. If you've been a Canadian resident since 2009 and never contributed, you have $102,000 in total room available right now. Withdrawals are penalty-free anytime, and that room gets added back the following year. Flexibility is unmatched.
However, there is an important caveat. US stocks in a TFSA face a 15% withholding tax on dividends. The US government doesn't recognize TFSAs as retirement accounts, so they take their cut. You can't claim this back on your Canadian tax return either.
RRSP (Registered Retirement Savings Plan)
RRSPs work differently. Contributions are tax-deductible, reducing your taxable income for the year. If you're in a 30% tax bracket and contribute $10,000, you'll get $3,000 back at tax time. Money grows tax-deferred until withdrawal (ideally in retirement when your income is lower).
The advantage with US stocks is that RRSPs are recognized by the US government thanks to the Canada-US tax treaty, so you won't face that 15% withholding tax on US dividends. For dividend-focused investors, this matters.
However, the downside is rigidity. You can't withdraw without paying taxes on that amount (exceptions exist for the Home Buyers' Plan and Lifelong Learning Plan). RRSPs work best when you're in a higher tax bracket now and expect a lower one in retirement.
FHSA and other accounts
The First Home Savings Account (FHSA) combines the best of both — tax-deductible contributions like an RRSP and tax-free withdrawals like a TFSA, but only for buying your first home. You can contribute up to $8,000 annually with a $40,000 lifetime limit.
Non-registered accounts have no contribution limits, but you'll pay taxes on investment income annually. Only 50% of capital gains are taxable, which is still better than regular income tax rates.
Choosing the right trading platform
Picking a brokerage feels overwhelming when comparing 10+ platforms with different fees and features. Fees matter far more than flashy interfaces (especially when starting out).
1. Understanding confusing fee structures
Most Canadian brokerages now offer commission-free trading on stocks and ETFs. Wealthsimple, Questrade, and National Bank Direct Brokerage all charge $0 to buy or sell Canadian stocks.
Big bank platforms like TD Direct Investing and RBC Direct Investing typically charge around $9.95 per trade, though active traders (150+ trades per quarter) get discounts to $4.95-$6.95.
Monthly account fees range from $0 at most discount brokers to $100 annually at bank platforms (usually waived with $25,000+ balance or regular trading activity). However, the real headache could be the foreign exchange conversion fees when buying US stocks.
2. Understanding the currency conversion trap
When you buy US stocks with Canadian dollars, you're making two transactions:
- Converting CAD to USD
- Buying the stock
Conversion is where platforms hide their biggest markups.
Interactive Brokers charges roughly $2 flat to convert $10,000 CAD to USD. Moomoo charges about $11 (0.09% + $2). Questrade and Wealthsimple both charge 1.5% without workarounds — that's $150 on the same $10,000. Big banks charge 1.6-2.5%, or $160-$250.
Converting $10,000 costs you $2 at Interactive Brokers versus $150 at Wealthsimple or Questrade. Over time, this compounds significantly.
Wealthsimple offers USD accounts for $10/month (waived if you hold $100,000+ in assets), eliminating the per-trade conversion fee. You'd still pay 1.5% once to convert your CAD to USD initially, but then trade US stocks freely.
Questrade and big banks let you hold USD cash in your account for free, serving the same purpose. You convert once (paying the fee), then keep US dollars ready for future trades.
3. Checking platforms on a feature-to-feature basis
Beyond fees, consider these features:
Asset availability
Asset availability determines what you can buy. Most platforms offer stocks, ETFs, options, mutual funds, bonds, and GICs. Interactive Brokers provides access to 150+ exchanges globally across 33 countries for international investors.
Fractional shares
Fractional shares let you buy partial shares instead of full ones. If Apple costs $180 USD per share but you only want to invest $50, fractional shares make that possible. Questrade launched fractional trading for US stocks in April 2025, while Wealthsimple has offered it for years.
Mobile experience
Mobile experience matters when managing investments on the go. QuestMobile and National Bank's app both receive high user ratings.
Regulatory protection
Regulatory protection is non-negotiable. Every platform mentioned is regulated by the Canadian Investment Regulatory Organization (CIRO) and protected by the Canadian Investor Protection Fund (CIPF), which generally covers up to $1,000,000 per separate account category.
4. Comparing the top platforms
We’ve broken down the top platforms from different perspectives of stock investment:
Best for beginners
Wealthsimple wins for Canadian stocks with $0 commission, no account minimums, and an intuitive mobile app. CIBC Investor's Edge offers a major bank trust with solid educational resources (though it charges $6.95 per trade).
Best for overall value
Questrade ranks as Canada's top overall brokerage with $0 commissions on stocks and ETFs and the lowest options trading fees ($0 + $0.99/contract). National Bank Direct Brokerage stands out among bank platforms for offering $0 commissions — rare for a Big Six bank.
Best for US stock investing
Interactive Brokers dominates with the lowest FX fees ($2 flat) and access to global markets, though its interface is complex. Moomoo offers competitive conversion fees (0.09% + $2) with a simpler platform.
How do you buy your first stock?
Once you've chosen a platform, the buying process takes just minutes. Modern brokerages have streamlined everything.
1. Opening and funding your account
Visit your chosen platform's website or download their app. The signup process asks for personal information (name, address, SIN), employment details, and investment knowledge level. Answer questions about your risk tolerance and investment goals honestly.
Identity verification happens instantly in most cases. The platform checks your information against government databases for immediate approval.
Link your bank account next. Most platforms use Flinks or similar services to connect securely. Select your bank, log in through their system, and grant permission for transfers. Funding methods and timelines vary:
Wealthsimple
Linked transfers take 3-5 business days; e-Transfer often arrives within 30 minutes.
Questrade
Instant deposit via Interac or Visa Debit (up to limits); EFT typically takes up to 5 days to fully clear
Wire transfer
Fastest but usually costs $15-$50
Most beginners start with e-Transfer for speed or EFT for convenience.
2. Finding stocks to buy
Before placing a trade, know what you're buying. New investors should start with broad-market ETFs rather than individual stocks. An ETF is a basket of many stocks bundled together, giving you instant diversification.
Popular beginner ETFs:
- VFV or XSP: track the S&P 500 (top 500 US companies)
- VCN or XIC: track the TSX Composite (Canadian market)
- XEQT or VEQT: all-equity ETFs holding thousands of stocks globally
Search for your chosen ETF by typing the ticker symbol (like "VFV" or "XEQT"). The platform displays a quote showing the current price, bid (what buyers will pay), ask (what sellers want), and trading volume.
3. Placing your trade
Click "Buy" and you'll see an order screen.
Order type
A market order executes immediately at the current price. You'll get your shares right away, but the exact price might vary slightly. A limit order lets you set a maximum price you're willing to pay — the trade only happens if the stock reaches that price or lower. For long-term investing, market orders work fine.
Quantity
Enter how many shares you want. With fractional shares (if available), you can enter a dollar amount instead ($500 worth, for example).
Account
Select which account the money comes from (your TFSA, RRSP, or non-registered account). Review everything, then click "Submit." Within seconds (for market orders), you own the stock. You'll receive a confirmation email with trade details.
Trading hours for Canadian and US markets are 9:30 a.m. to 4:00 p.m. Eastern Time, Monday through Friday. Wealthsimple offers 24/5 trading for select US stocks and ETFs (Sunday 8:00 p.m. to Friday 8:00 p.m. ET) at no extra cost.
4. Automating your investments
Consistency builds wealth. Wealthsimple offers recurring purchases to automatically buy your chosen ETF every payday. Questrade offers recurring deposits (pre-authorized debits) that move money into your account regularly, though you'll need to place buy orders manually.
Dividend Reinvestment Plans (DRIPs) automatically use cash dividends to buy more shares of the same stock, often commission-free. Your dividends compound over time instead of sitting as cash.
Also read: Best trading platform in Canada
Should you invest in US stocks?
Canadian investors often debate whether to venture into the US markets. The answer is almost always yes — but how you buy them determines whether you keep your gains or lose them to fees.
How big is the US market
The US stock market is roughly 10 times larger than Canada's by market capitalization. The Toronto Stock Exchange (TSX) is heavily weighted toward financials (around 31-32%) and energy (around 15-16%), while the US offers far more diversity across technology, healthcare, consumer goods, and other sectors.
Canada has roughly 3,400 publicly traded companies (TSX + TSXV). The US has around 4,000. If you want exposure to global leaders like Apple, Microsoft, Amazon, or Nvidia (the "Magnificent Seven" that drove most market gains recently), you need US stocks.
Historical returns tell the story. As of early October 2025, 10-year total returns were roughly 15% (S&P 500) versus 12% (S&P/TSX Composite) annualized. Diversifying globally reduces your risk if Canada's economy slows down.
How to navigate currency conversion?
Every time you buy US stocks with Canadian dollars, you're charged a conversion fee. As shown earlier, this ranges from $2 at Interactive Brokers to $150+ at Wealthsimple (without a USD account) or big banks.
That $150 fee on a $10,000 purchase is already a 1.5% loss before you start investing. If you make multiple small purchases over time ($1,000 monthly), you're paying 1.5% every month. That's $180 annually just in conversion fees.
So the smart strategy is to convert a larger lump sum once, pay the fee once, and hold US dollars in your brokerage account for future trades. Platforms like Questrade, Interactive Brokers, National Bank Direct Brokerage, and RBC Direct Investing let you hold USD cash for free in registered and non-registered accounts.
Even better, convert your CAD to USD through a low-cost service before transferring to your brokerage. You'd move the USD directly into your brokerage's USD account, then trade without additional conversion fees.
Norbert's Gambit is another workaround. You buy a security listed in both CAD and USD (like DLR.TO/DLR.U.TO), ask your broker to "journal" it from the CAD side to the USD side, then sell it in USD. Questrade charges $9.95 for journaling (free with Questrade Plus). The process takes 3-5 business days and works best for conversions above $8,000.
Tax paperwork for US stocks
Complete IRS Form W-8BEN with your brokerage to reduce US withholding tax on dividends from 30% to the treaty rate of 15%. Most platforms guide you through this during setup. The form is valid until December 31 of the third calendar year after signing, then it needs renewal.
Withholding tax varies by account:
RRSP/RRIF
US stocks are exempt from the 15% withholding tax thanks to the Canada-U.S. tax treaty.
TFSA/RESP
Subject to 15% withholding tax (unrecoverable)
Non-registered
Subject to 15% withholding tax, but you can claim a foreign tax credit on your Canadian return.
If your total foreign investment property exceeds $100,000 CAD at any point during the year, you must file CRA Form T1135 (Foreign Income Verification Statement) with your tax return. This is a reporting requirement, not a tax.
Canadian alternatives to US stocks
Canadian Depositary Receipts (CDRs) offer a workaround. CDRs represent shares of US companies but trade on the TSX in Canadian dollars with a built-in currency hedge. CIBC offers CDRs for popular stocks like Apple, Amazon, and Tesla.
Alternatively, buy Canadian-listed ETFs that track US indices. VFV, for example, tracks the S&P 500 but trades on the TSX in CAD. You still face currency exposure (the ETF holds US stocks), but you avoid the conversion fee on every purchase.
What stock investment strategy should beginners follow?
The investment world is full of noise: hot stock tips, day trading gurus, crypto hype. The strategy that works best for most people is also the simplest.
1. Index investing through ETFs
Instead of picking individual stocks (which requires hours of research and carries higher risk), buy a low-cost index ETF that holds hundreds or thousands of stocks. You instantly own a slice of the entire market. The benefits include:
- No need to research individual companies
- Instant diversification across sectors and companies
- Index funds outperform most actively managed funds over time
Lower fees than mutual funds (ETFs typically charge 0.05-0.25% annually versus 2%+ for mutual funds)
Popular all-in-one ETFs for Canadian investors include XEQT (100% stocks globally), XGRO (80% stocks, 20% bonds), and XBAL (60% stocks, 40% bonds). Pick one based on your risk tolerance, buy it regularly, and let it compound for decades.
2. Make sure you diversify
Don't put all your money into one stock, one sector, or even one country. Diversification means spreading risk so that if one investment tanks, your entire portfolio doesn't collapse. We can look at diversification from two angles — sector diversification and geographic diversification.
Sector diversification means owning stocks across technology, healthcare, financials, energy, and consumer goods. Geographic diversification means holding Canadian, US, and international stocks. Asset class diversification means mixing stocks with bonds or other assets. Broad-market ETFs handle this automatically.
3. Look at it from a long-term mindset
The stock market will drop 10-20% occasionally. Investors who hold a diversified portfolio for 20+ years have historically always seen positive returns, despite multiple crashes along the way.
Use dollar-cost averaging — that’s investing a fixed amount regularly (every payday, for example) regardless of whether the market is up or down. You buy more shares when prices are low and fewer when prices are high, averaging out your cost over time.
Also, stay the course. Don't check your portfolio daily and resist the urge to sell when headlines scream about crashes. Investing is boring, and that's exactly why it works.
Managing your money across borders with RemitBee
RemitBee offers a straightforward solution for currency exchange without the hidden markups that banks and some brokerages charge. Converting CAD to USD for US stock investing or transferring money internationally shouldn't cost you hundreds in fees.
Key features:
- Zero fees on transfers over $500 CAD
- Real-time rate alerts so you can convert at the best times
- Bank-level 256-bit encryption and FINTRAC regulation for security
- Transparent exchange rates with competitive margins (no hidden surprises)
- Easy integration with major Canadian banks through EFT, e-Transfer, and Bill Payment
Whether you're funding your brokerage's USD account for stock purchases or managing international obligations, transparent FX rates let you keep more of your hard-earned money working for you.
See how much you can save on every dollar exchanged.
Frequently asked questions
Here are some commonly asked questions about buying stocks in Canada:
Can I buy stocks without a broker in Canada?
No, you need a licensed brokerage to access stock exchanges. While some companies offer Direct Stock Purchase Plans (DSPPs), these are rare in Canada and limited to specific companies. Modern discount brokerages charge $0 commission anyway, so there's no advantage to avoiding them.
How much money do I need to start investing in stocks?
You can start with as little as $100-$500 at most platforms. Wealthsimple, Questrade, and National Bank Direct Brokerage have no minimum deposit requirements. Fractional shares let you invest any dollar amount, so you don't need thousands to buy expensive stocks.
What's the difference between stocks and ETFs?
A stock represents partial ownership in a single company. An ETF (exchange-traded fund) is a basket of many stocks bundled together. If you buy Apple, you own a tiny piece of Apple. If you buy an S&P 500 ETF, you own tiny pieces of 500 different companies. ETFs provide instant diversification with less risk.
Do I pay taxes on stocks in a TFSA?
No. All investment income inside a TFSA (capital gains, dividends, interest) grows completely tax-free, and you pay no taxes when you withdraw. The exception is the 15% US withholding tax on US stock dividends, which the US government takes before the dividend reaches your account.
Can I transfer stocks between brokerages?
Yes, through an "in-kind transfer." Your new brokerage initiates the transfer by requesting your holdings from the old brokerage. The process typically takes 5-10 business days. The losing brokerage often charges a transfer-out fee ($50-$150), though many receiving brokerages reimburse this for large accounts. You cannot transfer fractional shares.
How long does it take to buy stocks in Canada?
Once your account is funded, buying stocks takes seconds. During market hours (9:30 a.m. to 4:00 p.m. ET), a market order executes almost instantly. The delay comes from account setup (usually same-day verification) and funding (minutes to 5 business days depending on your transfer method). From decision to ownership, expect 3-7 days for your very first purchase.
References
- BlackRock. (2024). iShares Core S&P/TSX Capped Composite Index ETF (XIC). BlackRock Asset Management Canada Limited.
- Canada Revenue Agency. (2024). Tax-Free Savings Account (TFSA), Guide for Individuals. Government of Canada.
- Canada Revenue Agency. (2024). Specified Foreign Property (Form T1135). Government of Canada.
- Canadian Investment Regulatory Organization. (2024). Investor Protection.
- Canadian Investor Protection Fund. (2024). Coverage Policy.
- Canadian Securities Administrators. (2024). Getting Started with Investing.
- Financial Consumer Agency of Canada. (2024). Investing Basics. Government of Canada
- Interactive Brokers Canada Inc. (2024). Currency Conversion.
- Internal Revenue Service. (2023). Form W-8BEN: Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals). U.S. Department of the Treasury.
Moomoo Financial Canada Inc. (2024). Pricing and Fees.
National Bank Direct Brokerage. (2024). Fees and Commissions.
Ontario Securities Commission. (2024). GetSmarterAboutMoney.ca: Investing Basics.
