Before you purchase an investment, you will need to open a trading account.
An investment account holds cash and the investments (stocks, bonds, ETFs, mutual funds, etc.) that you buy and sell to realize your financial goals. Dealers and their representative registered investment advisors administer trading accounts for individual investors.
In Canada, you can open registered (RRSP, TFSA, RESP, etc.) and non-registered investment accounts. On this page, we discuss non-registered accounts. You will find information on various registered accounts on other pages within this section.
You can work with a registered investment advisor to decide what investments you would like in your investment account and if they suit your financial goals.
Opening an Investment Account
A registered investment advisor can help you set up your investment account. Be sure to do the following:
- Check to see what types of investments you can purchase through the account and your advisor – some advisors are limited to selling mutual funds, for example.
- Ask questions about the different types of charges and fees related to the investments you purchase in your account.
- Shop around to compare fees and other charges at other firms.
To open the account, you will need to provide the firm you are dealing with accurate information about your personal and financial circumstances. The Opening an Investment Account: A Guide for Investors from the investment dealer division of the New Self-Regulatory Organization of Canada (New SRO), discusses the ins and outs of opening different types of accounts.
Contributing to an Investment Account
There are generally no restrictions on depositing funds into a non-registered, cash account. However, if you borrow to invest using a margin account, you will need to meet the investment firm’s terms and conditions.
When you buy and sell investments to convert them to cash, you may pay fees, such as transaction fees. Always ask about fees and other charges before you buy or sell.
You must declare investment income (or losses) and interest on your taxes in non-registered accounts even if you don’t withdraw the money. Work with your advisor to ensure the type of accounts you have and investments you own fit your financial and tax situation.
The Canada Revenue Agency (CRA) also has information on its website about how to declare interest and other income.
Closing an Investment Account
Before closing your account, you will need to sell the investments or transfer them into another registered or non-registered account. Be sure to ask about any fees or other charges that you may be required to pay for closing the account.
Questions About Investment Accounts
Your registered investment advisor can answer questions about your account.