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How much money do I need to start investing?

Learn about your options and what you can expect to put down at the outset.

Felix Thompson
Felix Thompson

&

Jaclyn Hurst
Jaclyn Hurst

Updated

Fact checked

Contrary to what many think, you don’t need to be wealthy to start investing. More and more every day, people are taking responsibility for their own investments. And in today’s online world, it’s more accessible than ever.

What's in this guide?

  1. How much do I need to start investing?
  2. What investment options do I have?
  3. How often should I be investing?
  4. Compare online trading platforms and robo advisers
  5. Bottom line

How much do I need to start investing?

A few dollars and a few days’ wait is all it takes to get started with many beginner-friendly investment accounts. There are a handful of robo-advisors and brokerage accounts you can open for as little as $1 and offer fractional shares. This means you can buy a $10 piece of Amazon stock instead of paying $2,000 for a full share.

The biggest obstacle is often the wait time for the brokerage or adviser to verify your identity and for the bank to transfer your initial deposit. Almost any robo-advisor or brokerage account will accept recurring bank transfers that build your portfolio gradually every week or month.

Beware the investment fees

  • Although some companies allow small investments, some charge a flat rate. Some, for example, bills you at least $1 a month. Until you have several hundred dollars invested, the fee likely amounts to more than you’d make from your investment. It helps to have at least a small lump sum to start off with.
  • Several robo-advisors charge a percentage of the total amount you have invested with them annually, often between 0.25% and 1%.

What investment options do I have?

Regardless of whether you opt for a robo-advisor or brokerage account, there are two things to think about when getting started: your actual investments and the kind of account you’ll keep them in. Accounts offer different benefits.

Account types

  • Employer-sponsored retirement plans: A group Registered Retirement Savings Plan (group RRSP) are set up by your employer. To set this up you usually fill out some paperwork, decide the percentage of your paycheque you’ll contribute to the account and choose a portfolio. There’s usually a cap on the amount you can contribute annually, and many employers match your contributions up to a certain percentage — often 3% of your paycheque.
  • Tax-free savings accounts: As the name implies, a TFSA is a savings account that allows individuals to invest in securities and to withdraw cash without having to pay taxes on their contributions or earnings. Canadian residents who are 18 years of age or older can open a TFSA by visiting a financial institution, such as a bank, credit union, trust company or insurance company.

What to invest in

The second thing to consider is what to invest in. In general, here’s what you’ll find:

  • Stocks or ETFs: If the brokerage account you choose allows fractional investing and charges no commissions on trades, you could buy any amount of individual stocks or exchange-traded funds that hold a basket of stocks or other assets. If not, you’ll need enough money for at least one share plus any commission or fee.
  • Robo-advisors: Because they’re investing your money into a predefined portfolio, you simply deposit any amount of money and it’s invested for you.
  • Options: You’ll have to have enough cash in your account to cover the premium for at least one contract of 100 shares, plus any commission or fee when investing in options.

But there are exceptions. Some mutual funds or ETFs may have minimum investments, so your choices might be limited if you have very little to invest.

How often should I be investing?

This, too, depends on your investment goals and strategy.

  • Long term: Investors with long-term or retirement goals often contribute regularly either through a portion of their paycheque or an automatic bank transfer. The strategy here is known as dollar-cost averaging. By spreading out your contributions, you’ll be investing at both low prices and high prices, which averages out over time. The key is to contribute regularly — start small and increase your contribution when you can.
  • Medium term: Investors with multi-year time horizons can still start small and contribute regularly to their account, though they may decide to either invest that amount immediately or wait for a good time and invest whatever cash is accumulated.
  • Short term: Short-term investors or traders generally monitor trade opportunities closely and want to have enough money in their account to take advantage of those opportunities.

Compare online trading platforms and robo advisers

Name Product Available asset types Stock Fee Option Fee Account Fee ETF Transaction Cost
Wealthsimple Trade
Wealthsimple Trade
Stocks, ETFs
$0
N/A
$0
Free
Get a $25 bonus when you open a Wealthsimple Trade account and deposit and trade at least $100.
Go to site
More Info
Questrade
Questrade
Stocks, Bonds, Options, Mutual Funds, ETFs, GICs, International Equities, IPOs, Precious Metals
$4.95-$9.95
$9.95 + $1 per contract
$0
Free
Opt for self-directed investing and save on fees or get a pre-built portfolio and take some of the guesswork out.
Go to site
More Info
Interactive Brokers
Interactive Brokers
Stocks, Bonds, Options, Mutual Funds, ETFs, Currencies, Futures, Precious Metals
Min. $1.00, Max. 0.5% of trade value
$1.50 min. per order
$0 (if monthly commissions are greater than or equal to US$10.00)
Min. $1.00, Max. 0.5% of trade value
Access market data 24 hours a day, six days a week and invest in global stocks, options, futures, currencies, bonds and funds from one single account.
Go to site
More Info
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Compare up to 4 providers

Name Product Minimum deposit to invest Funding methods Management fee Available asset types
Wealthsimple Invest
Wealthsimple Invest
$1
Direct deposit, Bank transfer
0.40% - 0.50%
Stocks, Bonds, ETFs, Commodities
Get a $50 bonus when you open and fund your first Wealthsimple Invest account with a minimum initial deposit of at least $500. Trade and Cash accounts are not eligible.
Go to site
More Info
CI Direct Investing (formerly WealthBar)
CI Direct Investing (formerly WealthBar)
$1,000
Direct deposit, Bank transfer
0.35% - 0.60%
Mutual Funds, ETFs
CI Direct Investing offers access to an exclusive and personalized investment portfolio. Get up to $10,000 managed free for a year when you sign up for your first CI Direct Investing account and fund your account.
Go to site
More Info
Justwealth
Justwealth
$5,000
Direct deposit, Bank transfer, Automatic bank withdrawals
0.50%
ETFs
Receive a cash bonus of $50.00-$225.00 when you open a new Justwealth account. RESP accounts require no minimum deposit to begin investing.
Go to site
More Info
Moka
Moka
$0
Automatic bank withdrawals
$3/month
ETFs
The Moka app rounds up every purchase you make to the nearest dollar and invests the spare change into low-cost exchange-traded funds (ETFs).
Go to site
More Info
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Compare up to 4 providers

Disclaimer: The value of any investment can go up or down depending on news, trends and market conditions. We are not investment advisers, so do your own due diligence to understand the risks before you invest.

Bottom line

You can start investing with a little money — as little as a dollar in some cases. If you’re aware of the risks and don’t invest more than you can afford, you have the chance to start growing that portfolio sooner than you may have thought. Decide which approach to investing you want to take, then compare robo-advisors, stock trading platforms or other services.

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