Where To Invest Money In Canada: Best Investment Options in the Country

where to invest money in canada

To invest successfully you need to make smart choices. The secret to that is in knowing where to invest money in Canada, so that your investment works just as hard as you. No matter where you live in Canada, you need to know where to invest your money. This article offers some insight to the various investing options for you. 

Where to Invest Money In Canada

The first step is deciding where to invest money amongst the options provided. 

Discount Broker

With the same job as a stockbroker, a discounted broker enables trading of stocks but they do not offer direct investment advice. In addition to that, the fees you pay to discount brokerages are low compared to stockbrokers because you make your own investment decisions with little to no help.

Discount brokerage accounts can be found through online platforms that provides a self-service option for investors.

Robo Advisor

Robo advisors are online platforms that use computer algorithms to manage your investment portfolio. With a hands-off approach to investing, they tend to do things like select investments or investment classes for you, build a portfolio based on predefined risk tolerance, and automatically rebalance that portfolio for you. You don’t need to be a stock broker in Toronto’s business district to be able to invest.

The basics of robo advisor is to evaluate financial data, discover emerging trends, and factor in external threats to chalk out a financial path. Computer algorithms should help to predict the movement of prices of different stocks and thereby provide insightful information on when to buy and sell stocks. 

Discover robo advisors in the form of apps or online platforms. Robo advisors come in various forms of fees. Some have high one-time fees where others are a combination of fixed and commission-based fees on each transaction.


Stocks are certain shares of a company listed on the stock market for people to buy. Your stocks represent your ownership in a company bringing voting rights and a portion of the profits earned by the company. A majority of stocks are available as common stocks, today.

Common stocks enable the holder the right to vote and elect the board members of a company, (i.e. the individuals in charge of major decision-making). Common stocks also indicate a portion of profits distributed by the company in the form of dividends. Payment of these dividends takes place annually or semi-annually, depending on every company’s policy.

When you look at long term yield, common stocks bring a higher return when compared to other financial securities in terms of capital gains (the increased returns of an investor caused by an increase in stock price).

There is no higher limit to the price ceiling of a stock price as it depends on:

  1. The company’s financial health, and
  2. Market speculation

So if the company’s financial health reaches bankruptcy, the stock price could hit zero, resulting in almost no returns for the investor. Over the years, stock markets generally have historically provided the most favourable returns making them relatively liquid and regulated which ensures that companies can’t (legally) offer misleading financial statements.

To invest money in the stock market is an excellent opportunity for those individuals looking to build wealth over time and save their money from moderate inflation. If you are a  conservative investor who doesn’t like altering their principal amount (number of shares), then consistent dividend-paying stocks are the best options for you. 

All in all, the stock market is a level playing field for all investors. The sooner you start, the better it is, as you can stock up on wealth. 


Bonds are issued mainly by companies and government municipalities of cities to raise cash in exchange for timely payment of interest on a fixed rate. It works by primarily looking to raise some money through debt. Just like a loan agreement, in exchange for raising money, they pay interest payments and finally the principal amount after the period. 

Bonds have varying durations, While some bonds are issued for six months, some issued for five years, other Canadian bonds are even issued for greater than ten years. The larger the length of the bond, the larger the interest rate. The timeline of bond expiry is called maturity date, and on the maturity date, the issuer repays the full amount to bondholders.

How to get a return by investing in bonds?

Hold the bonds till maturity date while collecting the interest payments and then eventually collect the principal amount on the maturity date. The timing of interest payments on bonds depends on the issuer, but typically, it is twice a year.

Secondly, you can sell them at a cost higher than what you paid for.

When it comes to finance and investment, a higher risk bears a higher reward and vice versa. Bonds are seen as a lower risk investment when compared to the stock market because you’ll get your interest payment until the company defaults.

The best indicator for a bond’s worth is to use the standards set by bond rating agencies. Higher-rated bonds earn less interest rates and sell for higher prices, whereas lower-rated bonds offer more interest rates as they’ve got a risk by default.

Bonds are typically thought to be a safer option than the stock market. As they’re considered less risky, bonds offer significantly lower returns than the stock market. People who don’t want be risky or have heavily invested in the stock market can think of diversifying their portfolio with the purchase of bonds. 


An option gives the holder the right, but not the obligation, to buy (call) or sell (put) shares of a company at a stated price (strike price) at a specific date. 2 kinds of options exist: the American and European. European options typically allow the option to be exercised at a particular date, whereas the American option may get exercised at any time between purchase and expiration date.

What do the terms “calls” and “puts” mean? 

  • A call option offers the right but not the obligation to purchase shares of a company at a specific price, called the strike price, within a limited time frame (or a particular date if a European option occurs). A call option is purchased when the investor anticipates a rise in the stock price or underlying security.
  • A put option is a contract offering the holder of the put, the right but not the obligation, to sell shares at a stated strike price within a particular time period. A put option is purchased by an investor who foresees a drop in the future price of a stock or the underlying security.

Mature investors can also hedge against risk by choosing an options strategy, which involves the use of both call options and put options. In an options spread strategy, investors purchase and sell the options for the same underlying stock or asset but at a different strike price and/or expiration date.

Funnily enough, options are great “options” for investors who believe that a particular stock price or asset price will fall or rise but prefer not to put up a lot of cash up front. Options are valued based on their premiums (premiums are the amount of money that’s paid to the seller after a contract). The premium of an option is mostly based on the strike price along with other factors such as volatility of the asset and contract expiration date. 

Options are one of the riskiest paths to take as they can decrease the value of a portfolio drastically in a short period. Trading in options is most definitely not ideal for beginners because it should be practiced after considerable exposure to price movements in the stock market or the underlying security/commodity.

Exchange-Traded Funds (ETFs)

An exchange-traded fund (or ETF) is an investment fund that lets you buy a large pool of individual stocks or bonds in a single purchase. It monitors stock indexes like the S&P 500,  commodities, bonds or a bunch of assets grouped together.different

Many confuse ETFs with mutual funds as they also offer a bundle of different investable assets. ETFs trades are like a standard stock on the stock market with price fluctuations being monitored and studied as they’re traded.

Most well-known ETFs monitor stock market indexes, but lots of different ETFs track certain commodity prices, foreign currencies, and bonds among different groups of assets. In simple terms, an ETF is a fund of different assets (stocks, silver, oil, different securities, etc.).

ETFs spread out ownership of the whole pool of assets into a single share ready to be traded like a common stock. Aside from making capital gains on ETFs, investors can even benefit from profits distributed in the underlying ETF asset pool such as dividends and interest rates.

ETFs just like Mutual funds are a good option for people looking to invest for higher returns but with little financial knowledge. Such individuals can invest in well-known stock indexes without stress about individual company stock prices or performance.

Mutual Funds

MFs are basically a pool of various stocks and bonds mixed together in a single investment portfolio. The managers of the MF assimilate the different assets into shares and calculate the share price daily under the price fluctuations of each asset within the pool.

When you invest in a mutual fund, it varies from shares or bonds as the pool represents a collection of various assets. Those who invest can earn money when the stocks within the pool generate dividends and on interest payments from the bonds. Assets sold by mutual funds at an increased rate also create a capital gain distributed by the fund to its shareholders.

Mutual funds are ideal for those with deep pockets but no interest or knowledge of the financial world. MFs are managed by Fund Managers who get paid even if the fund incurs a loss.

Real Estate

Those who want to invest money, can invest in Canadian real estate rather than financial instruments. Typically real estate investments mean higher cash up front rather than bonds or stocks. Nowadays, there are an increasing number of real estate portfolios where you can invest for just a relatively small amount towards a tiny piece of a real estate project. 

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