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How to buy US stocks in Canada

4 steps for buying US Stocks in Canada, plus platforms with low fees for trading US stocks.

Most investment platforms in Canada provide access to major US exchanges like the NYSE and Nasdaq, where you can buy stocks in companies like Meta (Facebook), Netflix and Tesla. Fees typically range from $0 to $10 per trade, not counting any applicable foreign exchange fees.

Not all Canadian trading apps offer access to US stocks, so you’ll need to carefully compare brokers. Here’s how to buy US stocks in Canada.

Buying US stocks in Canada in 4 steps

  1. Compare brokers with access to US stocks
  2. Open your account by providing your personal information
  3. Fund your account by transferring money from your bank account
  4. Search and select the stocks you want to invest in and start trading

Top online trading platforms to buy US stocks in Canada

Best for Beginners

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Free trades for young investors
  • Easy-to-use platform
  • Low fees
  • Student and young investor discounts

Best for Lowest Commissions

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Low margin rates
  • Access to international stock exchanges
  • Low margin rates
  • Powerful research tools

Best for Easy-to-use App

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Low commissions
  • $50 in free trades
  • Low commissions
  • Easy-to-use app

Step 1: Compare Canadian brokers that let you trade US stocks

Before signing up to a new account or a broker, it’s important to check which countries and exchanges are accessible and what the associated fees are. By using a platform that offers access to US exchanges, you can deposit funds into your account and buy US stocks in Canada.

When finding the best platform to buy US stocks in Canada, consider the following factors.

Fees

You may be charged a trading commission plus a foreign exchange (FX) fee when trading US stocks. Some platforms may require you to pay a monthly fee in order to keep your account running or to access certain features.

Commissions might be higher for trading foreign stocks and may be charged as a percentage or fixed amount. You may want to look for brokers that offer USD accounts, so you don’t pay a conversion fee every time you trade.

International market access

A few Canadian platforms like Interactive Brokers make it easy to trade stocks on markets outside the US and Canada. If you want to trade on more than just US and Canadian exchanges, check the fine print to find out which exchanges you can access worldwide.

Ease of use

Check customer reviews and promotional videos to get a feel for how easy a platform will be to use. Is it fast, simple and convenient to execute a trade and monitor market performance?

Market research and advice

Find out whether the broker offers stock research and market analysis to help inform your trading decisions. Does it make it easy to keep up to date with the latest market news? Are there stock recommendations provided?

Market data

Check how up-to-date each platform’s market data is. Accessing the most current information can be critical when making investment decisions.

Trading tools

Is the platform just online or can you also place trades over the phone? Are flexible options like limit orders available to let you take advantage of market fluctuations?

Educational resources

Look for online educational resources that will teach you how to use the platform, how the stock market works, and how to invest in international stocks. These include webinars, video tutorials and how-to guides.

Mobile app

If you want to be able to trade on the go, look for a stock trading platform with a user-friendly mobile app. Read customer reviews to gauge its ease of use, security and trading functionality.

Customer support

Don’t forget to find out how you can access customer support if you have a problem, such as phone, live chat and email. Will support be available during US market hours?

Compare online stock trading platforms for buying US stocks in Canada

Not all brokers or trading platforms provide access to global stock exchanges, so if you want to buy and sell US shares, you’ll need to find one that offers the service.

1 - 4 of 4
Name Product Finder Rating Available Asset Types Stock Trading Fee Account Fee Signup Offer Table description
Interactive Brokers
Finder Score:
★★★★★
4.3 / 5
Stocks, Bonds, Options, ETFs, Currencies, Futures
min $1.00, max 0.5%
$0
N/A
Winner for Best Overall Broker in the Finder Stock Trading Platform Awards.
CIBC Investor's Edge
Finder Score:
★★★★★
3.8 / 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:
★★★★★
4.3 / 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:
★★★★★
3.7 / 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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Step 2: Open a trading account

Once you’ve chosen a stock trading platform, it’s time to sign up for an account. You’ll need to be 18 years or older and have a Canadian residential address.

You can apply online by providing:

  • Your name and date of birth
  • Your address and contact details
  • Your Social Insurance Number (SIN)
  • Proof of ID

Fill out a W-8BEN form to confirm you’re not a US tax resident and avoid being double taxed in Canada and the US. Most platforms and apps let you fill out a W-8BEN form online. You’ll also need to link your bank account to your stock trading account.

Step 3: Fund your account

Once your account is open, you can deposit money into it. Available transfer methods may include debit, bank transfer, wire transfer, or bill payment. Funds may arrive within a few days, depending on the payment method you choose.

Don’t forget to factor in currency conversion costs when depositing Canadian dollars, which will need to be converted to USD before you can trade. Be aware of the exchange rate and any conversion fees that apply.

Step 4: Buy US stocks

When you’re ready to buy US stocks, log in to your online account and search for the US stock or ETF you want to invest in. Select the number of shares you want to purchase, and place a buy order.

Use your platform’s education resources to learn how to trade and hone in on smart investments.

Why invest in US stocks from Canada?

Now that you know how to buy US stocks in Canada, you’re probably wondering why it’s worth investing in the US market. Here are some of the reasons.

Historically greater returns from buying US stocks

The US economy is one of the most powerful in the world. In the last decade, Wall Street’s S&P500 index has delivered an average return of 10.93%. Over the same time period, Canada’s equivalent index, the S&P/TSX Composite, has returned 4.39%.

Access to US market

Many more companies trade on US exchanges than Canadian exchanges. The NYSE and Nasdaq are the 2 largest stock exchanges in the world in terms of market capitalization, offering a number of lucrative investment opportunities.

Many of the world’s biggest global growth companies, such as Facebook (Meta), Amazon, Apple, Netflix and Google (collectively known as the FAANG stocks) are listed in the US.

Diversify your portfolio by buying US stocks in Canada

Aside from opportunities to profit, it’s important to have a diversified portfolio of stocks. This means investing in companies from a range of sectors as well as countries. If Canada’s economy slows down, stocks listed in another country can act as a buffer.

How much does it cost to invest in US stocks?

There are two key fees you need to consider when investing in US stocks from Canada:

  1. Trade commissions. This is a fee charged every time you place a buy or sell order. Some platforms like Wealthsimple have no commissions.
  2. Foreign exchange (FX) fees. The FX fee is the cost the provider charges you to change CAD into USD. This often runs from less than 1% up to 2.5% of the amount converted.

What is the best way to buy US stocks in Canada?

The best way to buy US stocks from Canada depends on your investment knowledge and goals.

For example, if you’re a first-time investor looking to steadily grow your wealth, you may want to invest in exchange-traded funds (ETFs). ETFs offer a relatively safe, easy and cost-effective way to buy into a variety of US stocks.

Did you know you don’t need to trade on US markets to invest in US stocks? There are hundreds of ETFs listed on the Toronto Stock Exchange that track US stocks. One example is the BMO S&P 500 Index ETF, which aims to replicate the performance of the S&P 500 index.

But if you prefer to personally curate and manage your own investment portfolio, you can buy stocks in individual companies.

Canadian depositary receipts: An alternative way to invest in US stocks in Canada

Canadian Depositary Receipts (CDRs) represent shares in companies from around the world and are traded in Canadian dollars on the NEO Exchange. Buying CDRs allows you to bypass the risk of exchange rate fluctuations while owning fractional shares in international companies.

There are CDRs for major US companies like Amazon, Apple, Netflix, and more. CDRs are offered by CIBC and can be traded just like stocks through online brokers. There are no ongoing management fees, and each CDR costs just $20.

If the companies you invest in pay dividends, you’ll receive payouts, but these won’t qualify for the dividend tax credit.

Which trading platforms allow you to invest in US stocks from Canada?

There are a growing number of Canadian online share trading platforms that offer access to international stock exchanges.

Here are some of the platforms that support US stocks in Canada:

Pros and cons of buying US stocks in Canada

Pros

  • Access to different investment opportunities. Trading via US stock exchanges allows you the freedom to take advantage of investment opportunities that are not available in Canada.
  • Increasingly more affordable. As a growing number of online share trading platforms compete for market share, brokerage fees are becoming more affordable.
  • Diversify your portfolio. If all your investments depend on the performance of one national economy—i.e. Canada’s—is your portfolio really as diverse as you think? Buying international shares protects you against having all your eggs in one basket.

Cons

  • Exchange rates. The CAD-USD rate fluctuates frequently which might negatively impact your investment.
  • Foreign exchange rates. Most platforms charge a fee to convert your funds from CAD to USD in order to buy USD stocks.
  • Higher brokerage/commission fees. You’ll need to contend with potentially higher fees when you trade internationally.

What are some of the risks of buying US stocks in Canada?

Investing in an area, industry or country which you know little about is always risky. When buying American stocks in Canada, you may not have the same knowledge and expertise. So, it pays to make sure you know what you’re getting into.

Additionally, you don’t want to make any mistakes when declaring income and capital gains on your tax return. Find out how stock investments are taxed in Canada to avoid finding yourself on the wrong side of the CRA.

Do I have to pay tax on US stocks?

Canadians are taxed on their worldwide income, not just their income from Canadian holdings. If you hold US assets, you are also responsible for paying withholding tax to the IRS (unless you are a US citizen or resident, in which case you are bound to other tax rules and should consult a tax specialist).

Canada and the US have an agreement which means Canadians who hold US assets are required to pay 15% withholding on dividends. However, withholding tax will generally not apply if you hold US stocks or ETFs in a Registered Retirement Saving Plan (RRSP) or Registered Retirement Income Fund (RRIF).

The CRA also allows you to claim a foreign tax credit for the foreign tax paid in order to avoid double taxation of the income. And if you sell a US stock or ETF for a capital gain, you’ll pay tax to the CRA rather than the IRS. You’ll need to report capital gains and dividend income in Canadian dollars.

Finally, unlike trading Canadian-listed stocks, you’ll be on the hook for exchange fees. Many brokerages also charge a currency conversion fee on top of that. Make sure to factor the exchange rate into your investments when buying US stocks from Canada.

How to hold US stocks in TFSA

Can you buy US stocks in a TFSA? Yes.

A tax-free savings account allows you to invest up to $7,000 per year and not pay tax on your capital gains or dividends. Permitted TFSA investments not only include cash, bonds, mutual funds, and stocks and ETFs that are listed on a designated stock exchange.

This means you can use your TFSA to invest in US stocks and ETFs listed on exchanges like the New York Stock Exchange and the Nasdaq. This makes a TFSA well worth considering when deciding how to buy US stocks in Canada.

Depending on your TFSA provider, you may be able to hold US-dollar and Canadian dollar investments in the one account, or you may need a separate TFSA for USD investments.

However, take note that buying US stocks in a TFSA won’t mean that your investment income is completely tax-free. Any dividends earned on US stocks held in a TFSA are subject to a 15% withholding tax.

Canadians considered stocks a smart investment option in 2023

According to results from the Finder: Consumer Sentiment Survey Q1 (CSTQ1), more than a third (36.18%) of Canadians considered equities to be a smart investment in the first quarter of 2023. This dropped only slightly in the second quarter of 2023 to 27%, according to the Finder: Consumer Sentiment Survey Q2 (CSTQ2).

Men preferred stocks as an investment option, with 41% convinced that the beginning of 2023 was a “good time to invest in stocks,” compared to 32% of female investors.(1)

Age also had an impact on an investor’s confidence in stocks as an investment opportunity. The youngest generation, Gen Z (investors up to the age of 24) had the most confidence in stocks as a good investment opportunity in the first quarter of 2023 with 53% believing “now is a good time to invest in stocks,” compared to 42% of millennials, 31% of Gen X and 19% of baby boomers.

In general, almost a third of Canadian investors (31%) held stocks outside of a registered account, like a retirement savings fund (RRSP) or Tax-Free Savings Fund Account (TFSA) and almost three-quarters (72%) bought or sold stock through an online stock platform or app. This seems logical, given that 29% of respondents in the CSTQ2 stated they had never worked with and had no plans to use the services of a financial advisor.(2)

How to buy US stocks in Canada: Bottom line

Investing in US stocks from Canada is a solid way to diversify your portfolio and gain exposure to US markets. Most Canadian platforms let you invest in US stocks, but foreign exchange fees may apply. As with any investment, you could gain or lose money, so do your research before buying in.

How to buy US stocks in Canada FAQs

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 and 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. Read the Product Disclosure Statement (PDS) and Target Market Determination (TMD) for the product on the provider's website.

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