How to invest $1,000

Turn that stash of cash into even more money.

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Are you wondering how you can take $1,000 and turn it into even more money? Here are 5 solid and reliable ways to invest $1,000 today.

How to build a $1,000 investment portfolio

What should your portfolio look like? The answer is different for everyone, but it should be tied to your goals and how much or little risk you want to take.

Here’s an example of what a balanced portfolio might look like:

Investment typePercentage
GICs and bonds15% to 40%
Stocks, ETFs and mutual funds50% to 75%
Peer-to-peer lending, real estate and alternative investments0 to 25%

Before you invest $1,000

If you want to get the most out of your $1,000, consider the following before you invest it:

  • Pay off high-interest debt. If you have any debt accruing 10% or more interest, you’ll likely come out ahead if you pay this down before you invest.
  • Create an emergency fund. Prepare for the unexpected by keeping at least 3 months’ worth of expenses in a high-yield savings account.
  • Build a vacation fund. If you take vacations often, consider keeping the $1,000 in a high-yield savings account to pay for your next adventure.

Invest with a commission-free online trading platform

If you’re interested in picking stocks, there are several free online trading platforms that let you start investing with as little as $0.

Pros

  • Choose from multiple accounts. You can invest using a retirement, tax-free or employer-sponsored account.
  • Comprehensive range of investments. Most platforms offer exchange-traded funds (ETFs), low-cost index funds, stocks and more.
  • Free trades. You’ll keep more money in your pocket when you invest using a platform that doesn’t charge fees.

Cons

  • Risk varies. If you invest in an individual stock, it will have more risk than an ETF.
  • Requires research. You’ll need to research different stocks and analyze their performance to avoid losing money on risky investments.
  • Trading fees. Some platforms charge fees every time you buy and sell, so look for one that won’t eat up your profits.

Name Product Available asset types Stock Fee Option Fee Account Fee ETF Transaction Cost
Questrade Stock Trading Platform
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.
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 equal to or greater than 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.
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Invest in peer-to-peer lending

Lend your money to other individuals in need through peer-to-peer (P2P) lending.

Pros

  • Lucrative returns. The average investor earns between 5% and 9% interest with P2P lending.
  • Steady cash flow. You’ll receive steady monthly income as the borrower repays their loan.
  • You’re helping someone in need. Most P2P investors enjoy lending money to help someone who needs it more than they do.

Cons

  • Risk of default. There’s a chance you could lose your money if someone defaults on their loan.
  • P2P lending is new. This industry has only been around since the Great Recession, so it’s hard to tell how it will do during the next economic downturn.
  • Unsecured loans. Often, borrowers don’t put up collateral for the loans, so there’s a slim chance you’ll get your money back if something happens.

Invest in a GIC

Guaranteed Investment Certificates (GICs) have terms ranging from 30 days to 10 years and provide a guaranteed return, but you can’t withdraw money before it matures.

Pros

  • Guaranteed returns. When you park your money in a GIC, you earn a fixed-rate, guaranteed return.
  • Locked-in rates. You don’t have to worry about your rate of return fluctuating when you invest in a GIC.
  • Good for short-term goals. GIC terms start at 30 days, making them a good investment option for short-term goals.

Cons

  • Penalty for early withdrawals. If you need to access your funds before the maturity date, you’ll pay a penalty.
  • Rates and fees vary by institution. Financial institutions set their own fees and minimum deposits, so you’ll need to shop around for the best rates.
  • Low interest rates. GICs offer guaranteed returns, but they typically produce lower returns than bonds, ETFs and stocks.

Invest in an RRSP

If you’re looking to save for retirement, you can get a jump start by opening a Registered Retirement Savings Account (RRSP).

Pros

  • Tax-free growth. You fund an RRSP with pre-tax money, so it can grow in the account without being subject to tax.
  • Use funds for qualifying expenses. You can withdraw funds before you turn 71 for qualifying expenses, such as your first home (through the Home Buyers’ Plan) or certain educational expenses (through the Lifelong Learning Plan).

Cons

  • Low contribution limit. You can’t contribute more than $6,000 a year to a Roth IRA.
  • Required minimum distributions. By the time you turn 71, your RRSP must be converted to a Registered Retirement Investment Fund (RRIF), so you can start making withdrawals.
  • Withdrawals are taxed. Withdraw from your RRSP must be declared as part of your income and are subject to income tax.

Invest with a robo-advisor

Want some guidance on how to invest? You may benefit from opening an account with a robo-advisor.

Pros

  • Affordable. Most robo advisors have minimal fees and minimum investment requirements.
  • Diversified investments. Robo-advisors use low-cost funds to keep your investments diversified.
  • Hands-off investing. Most robo-advisors maintain your portfolio by performing routine tax-loss harvesting and rebalancing.

Cons

  • Technology varies. Some robo-advisors are less advanced than others.
  • Managed by a computer. If you prefer face-to-face discussions about investing, this may not be the best option.
  • Limited advice. Robo-advisors work based off an algorithm, so they don’t offer personalized investments.

Name Product Minimum deposit to invest Funding methods Management fee Available asset types
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.
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).
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.
Wealthsimple
$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.
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Bottom line

There are many ways you could invest $1,000. Set aside time to determine your goals, timeline and risk tolerance. Then do your homework and compare your investment options before jumping in.

Frequently asked questions

Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading CFDs comes with a higher risk of losing money rapidly due to leverage. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades.

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