25 Best Investments In Canada | Full Guide

We all know the value of hard work, but, more often than not, the key to financial success is more than your sweat.

It’s about being wise with your savings and making your money work as hard or more challenging for you as you do. It can be difficult to find out how to start investing in Canada if you are a first-time investor. 

However, no matter how daunting it is, we are here to assist you. This article provides an introduction to investing, outlines principles and technical terminology, and advises on various investments based on your financial condition and comfort level.

Why you should invest in Canada

Before someone invests, they should be able to answer the question, “What does it mean to invest?” Investments are properties, or products gained intending to generate additional income or appreciation in value. They are a purchase made not for the present but to be helpful in the future. We often invest expecting the potential payoff to outweigh the initial cost.

Investors in Canada benefit from:


These are just a few of the reasons why international investors are flocking to Canada. Canada is the best country in the world for foreign investment. That is everything there is to it. It can be difficult to seize opportunities and avoid danger in today’s volatile environment.

FDI into Canada grew by 18.6 percent from 2018 to 2019, making Canada’s 2019 FDI results 42.5 percent higher than the previous 10-year average FDI total.

Canada is the destination, and investors are taking note. As we are just recovering from the pandemic, Global companies must expand while mitigating risk, which is why international investors will continue to choose Canada for its tremendous opportunities and its stability.

Global investors see a stable Canada as our economy moves from contraction to recovery. They value Canada’s agility, with programs that respond rapidly and robustly to business needs.

And you, as a local resident, should make use of this sun while it shines to make hay

What is an Investment goal? 

Everyone has financial aspirations in their lives, from preparing for a rainy day to planning a secure retirement. Managed funds have a long-term investment plan that can assist you in achieving clear objectives.

Your choice of fund should reflect the type of life event that you are planning for, as its investment style will determine the returns you can expect over differing timescales.

Types of goals

The three most popular forms of investment goals are: 

• Retirement savings or long-term property acquisition (15 years or more)

• Long-term life activities, such as school tuition (10-15 years)

• Rainy day or lifestyle funds to finance medium to short-term aspirations such as a dream sports car (5-10 years).

• The minimum time period for all forms of investment should be at least one year.

Whatever your personal investment target is, it is important to understand the time frame from the start, as this will influence the types of investments you can consider to help you achieve your objectives. It’s also a good idea to update your priorities with a financial advisor on a regular basis to account for any changes in your personal circumstances, such as the addition of a new family member.

Investment Goals

Things to consider before you invest money in Canada. 

Investing is all about balancing risk and return. Simply stated, low-risk investments means lower expected returns. Higher risk assets have higher expected returns in the long run.

 Where to invest money In Canada? 

Many low-risk investments are less likely to lose money. Only don’t plan to become wealthy by investing in a high-interest savings account or a GIC (GIC). Options can have excellent long-term returns, but as a riskier investment, stocks are far more volatile and can even lose money in the short term.

Top 25 Best Short and Long-Term Investments in Canada 2023

  • Blockfi Savings Account
  • Bank Savings Accounts
  • Money Market Accounts
  • Alternative Investments
  • GIC
  • TFSA
  • Checking Accounts
  • Short-Term Bond Funds and ETFs
  • Government of Canada Bonds
  • Provincial Bonds
  • Municipal Bonds
  • Investment-Grade Corporate Bonds
  • High-Yield Bonds
  • Strip Coupons and Residual Bonds
  • Stocks
  • ETF’s
  • Mutual funds

 1. Blockfi Account

Let’s face it, you’re not going to earn anything in a bank savings account. That’s why, to me, of all the items on this list, getting into a cryptocurrency savings account actually seems the most sane, and I have parked a significant amount of short term funds in this account. 

With Blockfi, you deposit some cash by buying a stablecoin (not actual cash). Your money is accessible any time so it is very liquid. Blockfi makes loans to other parties, like a bank does, except the loans are in cryptocurrency. Blockfi is able to pay you up to 8.6% per year back in stablecoin, which can be exchanged back for CAD. 8.6% is well over 16 times what you will get at the bank. So what’s the downside?

The downside:

Having a cryptocurrency savings account is not the same as having a savings account at your bank. There is no CDIC insurance on your money like with a regular bank. There are also concerns about digital theft.

Blockfi does have insurance of deposited funds that can guard against theft or other problems. Still, it is not very easy to figure out how it specifically differs from FDIC insurance.

Despite these risks, I believe Blockfi is a viable bank alternative. If interested, I recommend placing a small amount of cash (not all) into an account and increasing from there based on your comfort level.

Cryptocurrencies are here to stay, and this seems like then next evolution in banking, but be prepared for some bumps along the way.

2. Online Savings Account

A high yield savings account might be the answer if you’re looking for a risk-free way to earn some interest on your assets. You’ll get a small amount of interest just for holding your money in these accounts.

Aside from opening an account and depositing funds, this technique needs almost no effort on your part. The best high-yield savings accounts have attractive interest rates and no fees.

Read Also: What Are The Best Trading Options In Canada For 2023?

3. Money Market Account

The best money market accounts are currently paying an APY that is very similar to one-year CDs while also providing direct access to their assets. These accounts issue ATM cards, receipts, and deposit slips to depositors.

Money Market accounts are calculated based on the account balance rather than the time you have invested your money.

Because of all of these reasons, many people regard money market accounts as a form of “savings account on steroids.”

While there is little risk involved, you can secure a higher rate of return.

4. Alternative Investments

Alternative investments are part of a healthy and diversified portfolio. The problem is many alternative investments aren’t very liquid and require a holding time of at least a few years.

For example, real estate is a classic alternative investment. But the investor is in it for the long haul unless you’re flipping houses. You can try

• Lending Loop

• Canada Savings Bonds

Read Also: Best Banks In Canada In 2023 | Rates, Account Types, Min. Deposit

5. Guaranteed Investment Certificates (GICs)

Similar to their US cousins, GICs pay a set percentage of interest based on the period for which your money is locked in. Basically, a GIC is a loan to a bank, credit union or deposit broker.

You can often choose to invest for a fixed period, as little as 6 months to as long as 10 years. The longer the time frame, the higher the interest rate.

You might want to consider going with a GIC term of 5 years or less, as that is the maximum term the CDIC will insure, with a dollar value up to $100,000.

And much like CDs in the United States, with a GIC you are required to keep your money in the account for the duration of the term. If you need to pull the money out sooner, there may be a penalty or even no interest paid at all.

While this defeats the point of investing in a GIC, it’s good to know that you can get at your money if you find yourself in a situation where you need it.

6. A (Tax Free Savings Account) TFSA

A TFSA is an investment account that’s sponsored by the government. If you’re a Canadian over the age of 18, you’re eligible to save or invest in a TFSA up to a certain amount annually ($6,000 for 2022), and unused contribution room can be rolled over into future years.

A TFSA is a tax shelter; it gives every Canadian of the age of majority some savings or investment room to earn, tax-free.

Some confusion arises from the fact that, despite the name, not every TFSA is a traditional savings account. While you can put cash money into a high-interest savings account or other savings vehicle within a TFSA, it can also hold investments like stocks or bonds, mutual funds, GICs or ETFs.

In this way, a TFSA is similar to a registered retirement savings plan (RRSP), with the exception that with the TFSA you do not pay tax on the earnings after you make a withdrawal.

On the other hand, where you can claim RRSP contributions as deductible on your income tax return, that perk isn’t applicable to TFSA contributions.

7. Online Checking Accounts

Just like online savings accounts, an online checking account can also serve short-term investment needs.

You get many of the benefits of online savings accounts with even more liquidity because the number of withdrawals isn’t limited.

And the best part is, online checking accounts tend to offer cash bonuses! Which certainly helps sweeten the deal, especially with interest rates remaining low. 

8. Short-Term Bond Funds and ETFs

Short-term bond funds are products that are usually only managed by a professional financial advisor. 

Bonds are not as stable as money markets, but they do offer the potential to earn a higher yield. 

These bonds are a market product and will payout according to the market’s current condition in fluctuating monthly payments.

Short-term bonds usually mature in terms within 2 years or less, which can make them an ideal choice for investors with that type of timeline.

9 Government, Provincial and Municipal Bonds

Federal, provincial and municipal governments issue bonds to fund deficits or to raise capital for program spending.

Generally, maturity terms range from over two to 30 years and interest is payable semi-annually. The most highly traded bond issues have terms of five, 10, and 30 years.

10. Investment-Grade Corporate Bonds

Corporate bonds are debts companies issue to raise capital to finance operations and projects. Companies that issue debt are rated based on their financial strength, future prospects and past history. Investment-grade bonds must be rated “BBB-” or “Baa3” or higher by credit rating agencies Standard & Poor or Moody’s.

Corporate bonds are riskier than government bonds and usually have a higher risk of default. However, the increased risk generally comes with higher returns than “safer” government bonds. Liquidity varies depending on the issuer.

Read Also: Best Investment Banks In Canada In 2023

11. High-Yield Bonds

Bonds with a credit rating below “BBB-” for S&P or “Baa3” for Moody’s are considered non-investment grade. These bonds are often called high-yield or junk grade because they are riskier and their ability to repay issued debt is more uncertain.

It is always important to assess these bonds carefully and to consider the risks. There is a higher potential for capital loss rather than if you were to invest in a bond of higher-quality.

12. Strip Coupons and Residual Bonds

Coupons are created from federal, provincial, or municipal bonds whose two basic components — the semi-annual interest payments (coupons) and the principal amount (the residual) — are separated and sold as individual securities.

These instruments are purchased at a discount and mature at par ($100). Generally, the longer the term to maturity, the greater the discount.

Coupons and residuals pay no interest until maturity and entitle the holder to the security’s full face value at maturity. The interest compounds annually at the yield to maturity at the time of purchase.

For example, a Canadian strip coupon maturing in five years with a yield of 6% would be priced at $74.72 and mature at $100.

Although no money is paid out until maturity, the interest on the bond accrues each year and must be included as income on income tax records annually.

Compared with conventional bonds, strip coupons eliminate reinvestment risk over the term of the investment by paying no cash flows until maturity. Coupons may offer higher yields than bonds but its price may fluctuate more than a bond of similar term and credit quality.  

Coupons offer investors safety (most are government or high-quality corporate-backed), and an attractive guaranteed yield if held to maturity. Strip coupons remain a popular choice for tax-sheltered accounts such as RRSPs and RRIFs.

13. Banker’s Acceptances (BAs)

BAs are short-term credit investments created by a borrower for payment on a specified future date. BAs are “accepted” or guaranteed at maturity by banks and offer a high degree of safety for short-term investors. Banker’s acceptances are usually issued in one to three-month periods and are highly liquid.

A BA’s yield to maturity (rate of return) can be attractive compared to other short-term investments. BAs provide a slightly higher rate of return versus T-bills due to their comparatively lower credit quality.

The minimum initial investment at RBC Direct Investing is $50,000 par value, trading in increments of $1,000.

The difference between your purchase price and par value is your return. This is considered interest income.

14. Commercial Paper (CP)

CP investments are unsecured promissory notes issued by corporations. Companies issue CP to finance seasonal cash flow and working capital needs at lower rates than conventional bank loans.

CP is typically issued in one-, two- and three-month terms but may be issued for any term from one day to one year. CP is highly liquid and may be sold at any time.

Investors buy CP because it usually provides the highest return compared to other short-term alternatives, such as T-bills or BAs. Investments in CP are considered relatively secure for a variety of reasons.

First and foremost, companies issuing notes are generally large and mature. In addition, most CP sold by RBC Direct Investing holds a rating from one of the major Canadian ratings agencies in the R1 grade (investment grade) category.

The minimum initial investment at RBC Direct Investing is $100,000 par value, trading in increments of $1,000. The difference between your purchase price and par value is your return. This is considered interest income.

15. Crown Corporate Paper

Crown corporations are state-owned enterprises owned by the Sovereign of Canada. Short-term promissory notes are issued by crown corporations such as the Canadian Mortgage and Housing Corporation, Federal Business Development Bank, Export Development Corporation or Canadian Wheat Board.

Many crown corporations issue commercial paper denominated in both Canadian and U.S. dollars. Crown corporate paper is highly liquid. It can easily be sold at market value prior to maturity and is available in terms of one month to one year.

Crown corporate paper is fully guaranteed by the Government of Canada and offers the same high quality as Government of Canada T-bills, but pays a slightly higher rate of return. When available in inventory, the minimum initial investment is $100,000 par value.

The difference between your purchase price and par value is your return. This is considered interest income.

16. Stocks

Undoubtedly, the stock market has provided the best long-term investment returns in history. Since 1934, U.S. stocks have returned 11.4% per year, while Canadian and International stocks have annually returned 9.6% and 8.2%, respectively.

Indeed, the best long-term investments in Canada are in stocks which has kept pace with inflation over the very long term.

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17. 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 one purchase.

It tracks stock indexes like the S&P 500, different commodities, bonds or a bunch of assets grouped together.

It’s easy to confuse ETFs with mutual funds (to be discussed later) as they also offer a bundle of different investable assets.

ETFs trade like a standard stock on the stock market with price fluctuations being observed as they’re traded.

Most well-known ETFs track stock market indexes, but lots of different ETFs follow 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.).

18. Mutual Funds

A mutual fund is essentially a pool of various stocks and bonds grouped in a single investment portfolio. The fund managers assimilate the different assets into shares and calculate the share price daily under the price fluctuations of each asset within the pool.

Investing in a mutual fund differs from shares or bonds as the pool represents a collection of various assets. Investors earn money when the stocks within the pool generate dividends and on interest payments from the bonds. Assets sold by the fund at a higher price also create a capital gain distributed to its shareholders.

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

19. Real Estate

People who aren’t comfortable with financial instruments can choose more conventional markets such as real estate.

Though it requires higher cash upfront than bonds or stocks, there is an increasing number of real estate portfolios where you can invest a relatively smaller amount for a tiny piece of a real estate project.

For people who aren’t well-versed with the housing market, companies like Roofstock offer vetted homes ready to be sold and rented out.

20. Cryptocurrency

As technology progresses, so do the methods of investing. Termed as the future of finance, cryptocurrency is essentially a digital form of currency not regulated by any central bank.

Instead, it’s managed by the people who use it and buy it. As trust in banks erodes, cryptocurrencies are garnering attention as an alternative to conventional currency.

There are even crypto-exchanges and indexes emerging which facilitate investment in this alternate financial instrument.

The drawback to investing in crypto is there are no perfect indicators for predicting the price of cryptocurrencies. It’s purely based on individual demand and supply speculation.

The drawback is there are no perfect indicators for predicting the price of cryptocurrencies. It’s purely based on individual demand and supply speculation.

21. Registered Education Savings Plan (RESP)

An initiative undertaken by the government of Canada, a Registered Education Savings Plan (RESP) promotes savings in the form of an investment in a child’s post-secondary education.

The government allocates a certain percentage to match the contributions under the plan for children under 18.

Parents can open an RESP at most financial institutions (including robo advisors and online brokerages) in Canada, and almost anyone can pitch in, including relatives, friends, and neighbors.

The government kicks in an extra 20% up to a maximum of $500 annually per child and a lifetime total grant of $7,200 per child.

Suppose the child doesn’t attend an eligible post-secondary institution or training program. In that case, the sponsor of the RESP will get back their original contributions tax free (since RESP contributions are made with after-tax income).

The sponsor may be able to transfer the investment earnings to their RRSP tax-free (if they have enough contribution room), otherwise, they will pay income taxes on the investment earnings at their marginal rate. All grant money, however, must be repaid to the government.

The RESP is easy to start and provides a solid incentive to save for a child’s education. The drawback is that any funds drawn out from the plan and spent on purposes other than education result in a 20 percent penalty in addition to income tax.  

22. Registered Retirement Savings Plan (RRSP)

A Registered Retirement Savings Plan is an initiative by the Canadian government to promote retirement savings.

Pre-tax income is deposited in an RRSP account where the money increases with no charging of taxes on any gains realized. This remains the case until the money is withdrawn.

Funds deposited in an RRSP account enjoy tax-free gains on dividends, capital gains, and even interest rates. RRSP holders can withdraw their funds at retirement when taxed much lower than when they were working.

23. Options

An option grants 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.

There are two kinds of options, namely American and European. European options only allow the option to be exercised at a particular date, whereas the American option can be exercised anytime between purchase and expiration date.

Final Thoughts

Investing is all about balancing risk and return. Simply stated, low-risk investments mean lower expected returns. Higher-risk assets have higher expected returns in the long run.

Many low-risk investments are less likely to lose money. Only don’t plan to become wealthy by investing in a high-interest savings account or a GIC (GIC). Options can have excellent long-term returns, but as a riskier investment, stocks are far more volatile and can even lose money in the short term.

High-risk investments are best suited for a longer time horizon because you can afford to lose money in the short run to earn higher returns in the long term.

Passive investment with ETFs provides investors the best opportunity to achieve the highest returns over the long term.


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