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How investment accounts can make you money

Get financial security and stability by generating capital gains.

Financial institutions tailor different investment accounts to suit different investor types and classes. A high-risk investment has the potential for the highest gains, but also for the highest losses.

How does an investment account work?

An investment account can be any number of accounts that give you a return. Investment accounts include: brokerage accounts, pension plans, Guaranteed Investment Certificates (GIC), and retirement accounts such as RRSPs. You can also choose from direct investment accounts that act as a hybrid savings account and brokerage account. Investment accounts present different risks and returns and are often tailored to different types of investors.

What are the different types of investment accounts?

Investment account is an umbrella term that includes a number of different financial products. Common investment account types include:

  • Brokerage accounts. Also known as stock trading accounts, brokerage accounts typically offer the widest range of investment options and are suitable for both short-term traders and long-term investors.
  • Robo-advisors. These accounts are often more limited in selection but offer the benefits of modern technology and lower costs than financial advisors.
  • Guaranteed Investment Certificates (GICs). One of the safest ways to invest your money, a CD gives a higher return when you lock your money away for longer periods. There’s a penalty if you want to access your money before the term matures and there can be bonuses if you continue to invest your money once the first investment matures.
  • Money market funds. A money market fund is similar to a mutual fund. These funds offer redeemable shares of high-quality investments that regularly pay out dividends. Because investments are only in short-term shares (around a year or so), there is less risk.
  • Retirement accounts like Registered Retirement Savings Plans (RRSPs). Unlike a pension plan, these retirement accounts let you decide how your money will be invested. Retirement accounts often come with tax advantages too, letting you defer tax on your contributions until you withdraw the money during retirement.
  • Pension plans. This is a retirement plan set up by a company for an employee. The investment choices in a pension plan are made entirely by the company — the recipient of the pension has little to no control over how the money is invested.

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Pros and cons of using an investment account


  • Financial gain. Different investments and investment accounts have the potential for different gains. The potential for capital gains is tied to the risk of the investment.
  • Choice. These types of accounts give you control over how you spend your money.


  • Risk. The risk of suffering a capital loss.
  • Not for everyone. You need to do your homework and spend time researching before you start investing and open an investment account.

How do I compare investment accounts?

Consider these points when you compare investment accounts:

  • Risk profile. Riskier investments give greater returns. Savings accounts and GICs are among the safest types of investments, whereas stock trading has the potential for big gains and losses.
  • Your investment goals. Access to capital and risk appetite are 2 important factors in deciding your investment goals and subsequently which investment account is right for you. For example, a high-interest saving account is a better investment account for someone saving for their first home than a brokerage account. Stock trading can lead to big gains, but the chance of losing everything probably won’t appeal to someone saving up for a mortgage so he or she can begin investing in property.
  • Your investment strategy. You can hedge your bets by choosing the right mix of high- and low-risk investments. Using a variety of account types to diversify your investment portfolio is a common strategy.
  • The length of the investment. Are your investment goals short, medium or long term? Different investments have different investment cycles. For example, you need to pick the term length for a GIC before investing, while stocks can be more flexible. Your goals and the time frame in which you intend to realize those goals should help you make a decision about which account is best for you.
  • Liquidity. Also compare different investment accounts based on how easily you can access your money. Savings accounts are among the most liquid type of investment account — you can get your money when you want it. Securities only become a liquid asset if you can find a buyer.

Bottom line

Investments come with risks — there’s no way around that.

The amount of risk varies depending on the investment type. GICs and money market funds come with very little risk but also offer fairly small returns. On the other hand, investing in stocks is riskier and means that you could lose some – or even all – of your money, but you could increase it exponentially. It’s up to you to decide what level of risk you’re willing to take.

Check out our detailed guide on investments to learn about different ways to grow your money.

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 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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