How to buy stocks in Canada

To buy stock in Canada, online stock trading platforms offer a range of options for DIY investors to buy and sell securities on their own instead of relying on a human broker to execute transactions.

The fees for discount brokerages are rock-bottom, and with a little know-how, you can learn how to buy stock in Canada online, with: 

• The flexibility to choose and manage your own investments
• Low- or even commission-free trading
• Low ETF management fees (around 0.15% to 0.5%)
• Access to real-time data, research tools, and analysis

Where can I buy stocks?

Every big bank in Canada has its own discount brokerage arm, and for many self-directed investors, this can be the most convenient way to start investing on their own. However, there are more affordable options available. For instance, Questrade, Qtrade and Wealthsimple Trade are Canada’s leading low-cost brokerages in Canada.

QTrade	Questrade	Wealthsimple
◦ Commission-free ETFs, stocks, options, mutual finds and more. ◦ Fantastic educational resources for beginners and intermediate traders. ◦ Attractive sign-up bonuses	◦ Best online brokerage in Canada ◦ Low fees, free ETF purchases ◦ Excellent customer service	◦ No account minimums ◦ $0 commission ETF trading ◦ Reinvest dividends automatically
QTrade review	Questrade review	Wealthsimple review
Buy stocks	Buy stocks	Buy stocks

Not sure what platform works best for you? Read our comprehensive comparison on Wealthsimple vs. Questrade.

Once you’ve opened a brokerage account, the next step is knowing how to buy stocks effectively - that starts with a tax-sheltered investment account. 

If you’re just getting started with investing, you need to decide whether to invest inside an RRSP, TFSA, or a non-registered account.

An RRSP gives you a tax deduction on contributions, but you’ll pay income taxes on withdrawals in retirement. In contrast, you don’t get a tax deduction for TFSA contributions, but you can withdraw funds tax-free at any time. RRSPs and TFSAs tax-shelter your investments, meaning, there are no taxes on your investment income like dividends, capital gains, or interest earned within the account.

Debating TFSA vs. RRSP? A general rule of thumb is that an RRSP makes sense for high-income earners, while a TFSA makes sense for lower-income earners. And if you can afford to contribute to both, that’s great! If you're leaning towards a TFSA, check out the best TFSA investments in Canada to help you get started. You can easily buy stocks in a TFSA in Canada using your online brokerage. Only once you’ve maxed out your RRSP and TFSA can you open a non-registered or taxable account to invest.

Most online brokers support multiple account types, such as joint investment accounts, corporate accounts, or Locked-in Retirement Accounts (LIRAs), allowing you to manage all your investments in one place.

You can’t invest in stocks without money! Once your brokerage account has been opened, you need to fund it. Ideally, you should start with at least $1,000 in your account to invest in the stock market, but more is always better.

Once you make your initial deposit to your investment account, you should also set up an automatic monthly or bi-weekly contribution. This ensures you are consistently building your portfolio and always have the cash to take advantage of market dips!

Read more: How to transfer your brokerage account

When investing in the stock market, you need a plan. If you don’t have a trading plan, you’re likely to make emotional decisions instead of financial ones and can end up worse off than if you had not invested at all! Here are some approaches to investing to consider:

Once you have an idea of your portfolio strategy, it’s time to research your investments. For buying stocks for beginners in Canada, researching the stock market and understanding how to invest in Canadian stocks are key to your success.

Doing so is fairly straightforward and can even be done directly in your brokerage account.

I personally like to use a website like Yahoo! Finance or Marketwatch to research my stocks. You can look up stocks directly in your brokerage like Questrade or Wealthsimple Trade, but the stock prices typically lag 15 minutes behind the actual market data, which is why I choose financial websites instead.

When you look up a stock, the most important information will be shown in the summary, including the current price, 52-week range, dividend, and more. You can dig deeper into the financials of the stock of your choice right there or view official documents on their website under “investor relations”.

Doing your due diligence is an important part of being a good investor, but it definitely takes work. Here are a few things to consider when buying a stock:

• Price: What is the current stock price? Is this a recent high or low for the stock? Is it a fair price for the value you will be getting?
• Dividend: If you are a dividend investor, you will want to know, does the stock pay a dividend? If so, how much? Does the dividend payout ratio suggest the dividend is sustainable or is there a risk of it being cut in the future?
• Market and industry trends: How is the industry expected to perform going forward? Will this company be able to hold its own and grow?
• Performance: How has the stock performed over time, particularly relative to competitors? Are there any concerns about management?
• Future projections: How is the stock expected to perform going forward? Are there lots of room for growth, or is it expected to cool down from here?

Read more: Best ETFs in Canada for young Canadians

Once you’ve established your portfolio strategy and chosen your investments, it’s time to make your trades!

For the cheapest way to buy stocks in Canada, you can explore platforms like Questrade and Wealthsimple.

The first thing to note is that you can only make trades during stock market hours. The Toronto Stock Exchange and the New York Stock Exchange are open Monday through Friday from 9:30 a.m. to 4 p.m. EST and closed for Canadian or U.S. holidays, respectively.

If you can’t trade during regular market hours, you can always set up trades outside market hours to be executed when the market opens. This is also a great way to automate your portfolio, so you avoid making emotional buy or sell decisions.

Before you make your first trade, there are a few things you need to know:

Once your portfolio is set up and your money is in the market working for you, you need to do some regular maintenance to keep things running smoothly. Here’s how to optimize your investment portfolio: