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How to invest $1,000

Find the best way to invest $1,000 in Canada so that you can turn that stash of cash into even more money.

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

How to invest $1,000

What should your $1000 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%
Alternative investments (peer-to-peer lending, real estate, etc.)0 to 25%

To take on less risk, up your exposure to GICs and bonds. To take on more risk, up your exposure to stocks and ETFs.

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.
  • Do a self-assessment. How comfortable are you with risk, really? Can you invest for yourself, or would you prefer someone else’s advice? Do your goals align more with passive or active investing? These are all things to ask yourself before you start investing $1000.

1. 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. Different investments carry different risks.
  • 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.

1 - 5 of 5
Name Product Finder Rating Available Asset Types Stock Trading Fee Account Fee Signup Offer Table description
Interactive Brokers
Finder Score:
★★★★★
4.2 / 5
Stocks, Bonds, Options, Index Funds, ETFs, Currencies, Futures
min $1.00, max 0.5%
$0
N/A
Winner for Best Overall Broker in the Finder Stock Trading Platform Awards.
Moomoo Financial Canada
Finder Score:
★★★★★
3.9 / 5
Stocks, Options, ETFs
$0.014/stock
$0
Get up to $1,200 or a $1,200 Apple gift card
Trade US stocks for up to 90% less and access free real time stock quotes and level 2 market data. T&C's Apply.
CIBC Investor's Edge
Finder Score:
★★★★★
3.7 / 5
Stocks, Bonds, Options, Mutual Funds, ETFs
$6.95
$0 if conditions met, or $100
100 free trades + up to $4,500 cash back
An easy-to-use platform with access to a variety of tools to help you trade with confidence.
Questrade
Finder Score:
★★★★★
3.9 / 5
Stocks, Bonds, Options, Mutual Funds, ETFs, GICs, International Equities, Precious Metals
$4.95 - $9.95
$0
Get $50 in free trades when you fund your account with a minimum of $1,000.
Opt for self-directed investing and save on fees or get a pre-built portfolio to take out some of the guesswork.
Qtrade Direct Investing
Finder Score:
★★★★★
3.6 / 5
Stocks, Bonds, Options, Mutual Funds, ETFs, GICs
$6.95 - $8.75
$0 if conditions met, otherwise $25/quarter
Get up to a $150 sign-up bonus. Use code OFFER2024. Ends October 31, 2024.
Low trading commissions and an easy-to-use platform with access to powerful tools and a wide selection of investment options.
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2. Invest in your RRSP

If you’re looking to save for a home, retirement, or anything else, you can get a jump start by opening an RRSP.

This might be the best place to start investing your $1000 because of its tax benefits. RRSPs are tax deferred, meaning any capital gains you make on your investments within the account are not taxed until you withdraw them. Typically, you’ll withdraw from your RRSP when you’re retired, and therefore in a lower tax bracket. So, your gains will be taxed at a lower income tax rate.

In addition to its deferred taxation, your RRSP allows you to deduct any contributions you made from your taxable income. This can lower your annual tax bill!

Finally, an RRSP gives you an opportunity to literally double your money. If you have a group matching plan through your employer, they will match your $1000 contribution (or sometimes 50% of your contribution). Your $1000 investment then turns into a $2000 RRSP contribution, and you double your investment for free.

Pros

  • Tax deferral. You won’t be taxed on gains until you withdraw, typically at retirement.
  • Offsetting current taxable income. RRSP contributions will offset your taxable income, potentially lowering your tax bill.
  • Potential for matching. If you have a matching program through your employer, you can have your contribution doubled.

Cons

  • Contribution limits . You can contribute up to 18% of your previous year’s earned income annually into your RRSP, or $29,210 (for 2022), whichever is less. You will be penalized for over-contributions.
  • Penalty for early withdrawals. Withdrawals before retirement are subject to withholding tax.
  • Withdrawals are not added back to contribution room. Once you make a withdrawal, you never get that contribution room back.

3. Invest in your TFSA

Another registered account that might be a good place to invest your $1000 is a TFSA. The beauty of TFSAs is that your gains aren’t taxed, ever. This means that anything you make on your $1000 is yours to keep and reinvest. This makes TFSAs a great way to maximize your investment.

Plus, unlike RRSPs, there is no penalty for withdrawing from your TFSA. You can take your money out at any time if you need it, without consequence.

TFSAs have a yearly contribution limit. For 2022, that limit is $6000. You can tally up your previous years’ unused contributions from the year you turned 18 and roll them over to use when you can.

Pros

  • Tax exemption. Gains made in this account are exempt from taxes, allowing for tax-free compounding.
  • No penalty for withdrawing. You won’t pay withholding tax and can withdraw at any time. Your contribution room will be added back the following calendar year.
  • Easy place to start. There are few rules to remember with TFSAs, and you usually don’t need to submit a tax return for this account type (since it is, well, tax-free), making it a great place to start with $1000.

Cons

  • Contribution limits. You can contribute $6000 for the 2022 calendar year, plus any unused contribution room from previous years. If you over-contribute, you will be penalized by the CRA.
  • Contributions are not tax-deductible. Unlike RRSPs, contributions made to TFSAs will not offset your taxable income.
  • Day trading is not allowed. The government views day-trading as a business activity, and TFSAs are for personal use. Therefore, day-trading within a TFSA can be flagged by the CRA.

4. Invest in a GIC

Guaranteed Investment Certificates (GICs) are a type of investment that 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.
  • Suitable for short-term goals. GIC terms start at 30 days and go up to several years, making them a good investment option for both short-term and long-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.

5. Invest with a robo-advisor

Want some guidance on the best way to invest $1,000? 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.

1 - 3 of 3
Name Product Min. Deposit Funding methods Management fee Available Asset Types
Wealthsimple Invest
$1
Direct deposit, Bank transfer
0.40%–0.50%
Stocks
Get a $25 bonus when you open and deposit $500 in your account – Trade and Cash accounts are not eligible.
Questwealth Portfolios
$1
Direct deposit, Bank transfer
0.20% - 0.25%
Stocks, Bonds, ETFs, Commodities
A robo-advisor offering low fee portfolios that are actively managed and dynamically rebalanced when market conditions change.
Moka
$0
Automatic bank withdrawals
$15.00/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).
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Bottom line

There are many ways to invest $1,000 in Canada. 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, 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 forex on leverage comes with a higher risk of losing money rapidly. 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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