Introduction
Studying in Canada brings many possibilities for international students to have a bright future. An international student in Canada has to bear many expenses like tuition fees, rent, meals, etc. Therefore, they can look for ways to earn money to support their higher education. As an international student, you can get a part-time job like a waiter or even a receptionist. But, suppose you want to earn money by investing in stocks. In that case, you need to find the answer to the following question – Can international students trade stocks in Canada?
In this blog post, we will talk about the following 4 sub-topics:
1. Is it possible for international students to invest in stocks in Canada?
2. Top Ways to Invest in Canada as a student
3. Here are the Steps to Invest in Stocks in Canada as an International Student
4. FAQs
Is it possible for international students to invest in stocks in Canada?
Suppose you have the following question in your mind – Can international students buy stocks in Canada? In that case, the answer will be a big “Yes.” International students can buy and sell stocks in Canada. The requirements for investing in stocks in Canada as an international student are a minimum age of 18-19 and a SIN number. A SIN number refers to a Social Insurance Number (a 9-digit number) that allows foreigners to work in Canada and take advantage of the various programs and benefits the Canadian Government offers. If you are a student with an F1 visa, even then, you can invest in stocks in Canada. You can easily earn passive income by day trading. Day trading allows you to trade financial assets within a shorter span than the general investing activity. Typically, the trade takes place within a few hours in day trading in Canada.
Top Ways to Invest in Canada as a student
There’s no denying the fact that the ROI on even a small investment can be huge. All thanks to compounding. Therefore, investing to earn passive income will be beneficial to secure your future. But, how will you invest in Canada as a student? This section looks at the ways that make investing possible. Here are the ways:
Purchase blue-chip stocks of Canada
Now that we have an answer to the question, “Can international students trade stocks in Canada?” Let’s understand how to do the same. You need to invest in companies like large banks that will remain in business for a long time and whose stocks will pay you dividends. Dividends are income you get in addition to the rise in the value of your stocks. You are supposed to open a brokerage account to purchase dividend stocks. If you are not ready to pay a massive amount as the brokerage fee, you can take advantage of online discount brokerages like Wealthsimple Trade or Questrade. You need to deposit and trade a minimum amount on these brokerage accounts.
Make investments in exchange-traded funds (ETF)
You should make investments in ETF because through ETFs, you can maximize your return on investment by paying lower fees. ETFs comprise all the shares that exist in a market or an index. If you invest in a diversified portfolio consisting of shares from different markets, the risk you will bear will be far less than other investments. If you want to invest in ETFs without paying any commission or brokerage, the best thing to do will be to trade through online discount brokerages like those mentioned above. Such Robo-advisors will automate investments for you at a cheaper rate than mutual fund investments.
Purchase GICs
GICs are low-risk investments and allow you to earn a particular interest rate. The return on investment may be less than other riskier investments; nevertheless, the chance of earning interest is higher than a general bank account. For example, EQ Bank, Canada offers a GIC to students for three months that pays a decent amount (GIC rate – 1.30%).
Invest in community bonds
If you want to get a higher ROI, you need to ensure your money is invested in bonds for a particular span, usually five years or, sometimes, more.
Deposit your money in Savings Account
This is the oldest method of investing money that, at times, even generates high interest. The interest that EQ Bank offers on all deposits is 1.2%.
Here are the Steps to Invest in Stocks in Canada as an International Student
It may be challenging to pay your tuition fees, monthly rent, food bills, and other bills as an international student. The best way to deal with all the expenses is to invest in stocks early on so that you can reap the benefits later on in your life. Here are the steps that you can follow to invest in stocks in Canada as an international student:
1. Scout for a good broker
You may want to take the services of a broker who either charges less or nothing. To find such a broker, you can download a few applications, like the ones mentioned in the previous section. These are the ones –
• Wealthsimple – This app is one of the best apps for international students because it charges no commission. You have to start by investing 100$. But, remember, you must invest in Canadian stocks only. That’s because if you invest in US stocks, you will need to pay a currency conversion fee.
• Questrade – Questrade is another app that international students can use to invest in stocks in Canada. It offers various market research tools that make investing easier. You need to invest a minimum of 1000$ in starting investing in Questrade.
2. Start with a Tax-Free Savings Account
If you want to gain tax benefits from saving in Canada, a Tax-Free Savings Account (TFSA) will be your safest bet. Because there is a limit on the amount you can save in a TFSA, it is advisable to opt for a Registered Retirements Savings Plan (RRSP) that provides a higher limit and also offers tax benefits to a certain extent. Once the limit is filled in TFSA AND RRSP, you can invest in a non-registered account that is best suitable for personal purposes or business purposes.
3. Zero in on the Places to invest
You can invest in blue-chip stocks and ETFs, as mentioned above. You can even invest in mutual funds. You can also invest in index funds and reinvest in your earnings from index fund investments. An index fund is a type of mutual fund or ETF that allows you to buy a small part of every company existing in a specific market index.
FAQS
Is it possible to trade Bitcoins in Canada as an international student?
Yes, it is possible to trade Bitcoins in Canada as an international student.
Do non-resident investment account standards differ from one financial institution to another?
Yes, it does differ. There are also minimum requirements and restrictions imposed on non-resident investment accounts.
As an international student in Canada, can I participate in financial markets or Forex?
No, you cannot participate in financial markets or Forex in Canada as an international student.
Conclusion
We hope you now have a clear answer to your query, “Can international students trade stocks in Canada?” For information on investing in stocks as an international student in Canada, you can go back to the previous sections and strengthen your knowledge. We have tried to cover all queries that international students usually have about investing in stocks or about investing in general. Are you an international student? What are you waiting for? Refer to the above points and start investing today to earn extra income and support yourself as a student.