Compare the best ways to invest in Canada

Investing can help you grow your money over time and work toward goals like buying a home, saving for retirement, or building long-term wealth. Canadians have access to a wide range of investment options, from guaranteed investments such as GICs to stocks, ETFs, and cryptocurrency. With so many ways to invest, knowing where to start isn't always easy.

Before choosing an investment, think about what you're investing for, when you'll need the money, and how much risk you're comfortable taking. From there, you can explore different investment options and find an approach that fits your goals.

1. Set your investing goals

Start by thinking about what you want your money to accomplish. You might be investing for retirement, a future home, education, or simply to build wealth over the long term. Your timeline matters, too. Money you won't need for many years may be able to withstand more short-term market fluctuations than money you'll need relatively soon.

2. Understand your comfort with risk

Different investments come with different levels of risk. GICs can provide guaranteed returns and principal protection, subject to their terms, while investments such as stocks and ETFs can rise or fall in value with the market. Cryptocurrency can experience even larger price swings and is generally considered a higher-risk investment. Understanding how much uncertainty you're comfortable with can help you narrow down which investment options you want to explore.

3. Choose how you want to invest

Once you know your goals and risk tolerance, think about how involved you want to be. If you want to choose and manage your own investments, a direct investing platform lets you buy and sell investments such as stocks and ETFs yourself. If you're looking for a predictable return without exposure to market fluctuations, a GIC may be worth considering. Investors interested in digital assets can also explore cryptocurrency platforms, while keeping the additional risks of crypto in mind.

You don't necessarily need to choose just one approach. Depending on your goals, your investment portfolio may contain different types of assets.

4. Compare your options

Rates, fees, features, investment choices, and account types can vary between providers. Comparing your options before you invest can help you understand what you're paying for and find products that better match the way you want to invest. Ratehub can help you compare online brokerages, GIC rates, and cryptocurrency platforms available to Canadians.

There's no single investment that's right for everyone. Different options come with different levels of risk, potential return, flexibility, and involvement.

Here's a quick look at some of the investing options you can explore through Ratehub.

Keep in mind that these aren't the only ways to invest in Canada, and investments within each category can vary considerably.

The features that matter most depend on what you're investing in. Looking beyond potential returns can help you understand the costs, risks, and restrictions that come with an investment.

Comparing direct investing platforms

A direct investing platform, also known as an online brokerage, lets you buy and sell investments yourself. Depending on the brokerage, you may have access to stocks, ETFs, bonds, options, mutual funds, and other investments.

When comparing online brokerages, consider:

• Trading commissions and other fees
• Account maintenance or administration fees
• Available investments
• Available registered and non-registered account types
• Minimum balance requirements
• Research and investing tools
• Mobile and desktop platform features
• Access to Canadian and U.S. markets

The right brokerage can depend on what you want to invest in, how often you trade, and which platform features matter most to you.

Compare online brokerages

Comparing GICs

A Guaranteed Investment Certificate (GIC) lets you deposit money with a financial institution for a specific period in exchange for interest. Unlike market investments, the interest rate is generally agreed upon when you purchase the GIC, making your return more predictable.

When comparing GICs, consider:

• Interest rate
• Length of the term
• Minimum deposit
• Whether the GIC is cashable or redeemable
• When interest is paid
• Eligibility for deposit insurance
• What happens when the GIC matures

A higher advertised rate isn't necessarily the only factor to consider. For example, locking your money into a non-redeemable GIC may offer a competitive rate but limit your ability to access the funds before maturity.

Compare GIC rates

Comparing cryptocurrency platforms

Cryptocurrency platforms allow you to buy and sell digital assets such as Bitcoin and Ethereum. Features, fees, available cryptocurrencies, and security practices can differ significantly between platforms.

When comparing crypto platforms, consider:

• Trading fees and spreads
• Deposit and withdrawal fees
• Available cryptocurrencies
• Canadian-dollar funding options
• Security features and asset custody
• Deposit and withdrawal methods
• Ease of use
• Available trading features

Cryptocurrency is highly volatile and can involve significantly more risk than many traditional investments. Before buying crypto, make sure you understand both the asset you're purchasing and the platform you're using.

Compare crypto platforms

The investment itself isn't the only decision you'll need to make. You'll also need to consider which type of account you'll use to hold your investments.

Some of the most common investment accounts in Canada include:

Tax-Free Savings Account (TFSA)

A TFSA is a registered account that can hold investments such as stocks, ETFs, GICs, and other eligible products. Investment income and gains earned within the account are generally tax-free, and withdrawals are also tax-free. Despite its name, a TFSA can be used for much more than a traditional savings account.

Registered Retirement Savings Plan (RRSP)

An RRSP is designed to help Canadians save for retirement. Eligible contributions can reduce your taxable income, while investments within the account can grow tax-deferred. Withdrawals are generally taxable.

First Home Savings Account (FHSA)

An FHSA is a registered account designed to help eligible first-time homebuyers save toward the purchase of a qualifying first home. Eligible contributions are generally tax-deductible, while qualifying withdrawals to purchase a home can be made tax-free.

Non-registered investment account

A non-registered account doesn't offer the same tax advantages as registered accounts, but it doesn't have the same contribution limits either. Investment income and capital gains earned in the account may be taxable.

The right account can depend on your goals, eligibility, available contribution room, and tax situation.