You just moved to Canada. A bank advisor wants to sell you a mutual fund. Before you sign anything, read this. The Canadian investment system has some great tax-sheltered accounts — and some expensive traps designed for people who don't know better.
You need a SIN to open any registered investment account in Canada (TFSA, RRSP, RESP). Apply at a Service Canada office with your immigration documents. Permanent residents and work permit holders can get a SIN starting with a number other than 9. Temporary residents get a SIN starting with 9, which has some limitations.
Open a chequing account first. All big five banks (RBC, TD, BMO, CIBC, Scotiabank) have newcomer programs with free banking for the first year. The bank will try to sell you mutual funds during this process. Smile, nod, and read the rest of this page first.
You become a Canadian tax resident when you establish "significant residential ties" — a home, spouse/dependants in Canada, or a driver's licence/health card. Most immigrants become tax residents on their arrival date. This matters because TFSA and RRSP contribution room starts accumulating from the year you become a tax resident.
International students: You can invest in Canada, but your TFSA room only starts accumulating from the year you turn 18 AND are a Canadian tax resident. If you arrived at age 20 in 2024, you have TFSA room for 2024, 2025, and 2026 only — not the full lifetime amount. Check your exact room on CRA My Account.
Canadians who've been residents since 2009 have up to $102,000 in total TFSA contribution room (as of 2026). You don't. Your TFSA room only counts from the year you became a Canadian tax resident and were 18 or older.
| Year Became Tax Resident | Annual Room Earned | Total TFSA Room (by 2026) |
|---|---|---|
| 2024 | $7,000 (2024) + $7,000 (2025) + $7,000 (2026) | $21,000 |
| 2025 | $7,000 (2025) + $7,000 (2026) | $14,000 |
| 2026 | $7,000 (2026) | $7,000 |
The TFSA is almost always the right first account for newcomers. Growth is completely tax-free. Withdrawals are tax-free. And withdrawn amounts get added back to your room the following year. There's no equivalent in most countries. See our full TFSA contribution room guide.
Don't over-contribute. CRA charges a 1%/month penalty on excess TFSA contributions. Check your exact room at CRA My Account (you can register once you've filed your first Canadian tax return). If you're new and haven't filed yet, calculate manually: $7,000 × number of years you've been a tax resident since 2024 (or since turning 18, whichever is later).
When you open your bank account as a newcomer, the advisor will offer to "help you invest." They'll suggest a mutual fund — typically something like RBC Select Balanced Portfolio or TD Comfort Growth Portfolio. These funds charge MERs of 1.8-2.3%.
The advisor earns a trailing commission (roughly 1% of your balance per year) for putting you in these funds. They have a financial incentive to sell you the most expensive product. They won't mention cheaper alternatives because those alternatives don't pay them.
This isn't malicious — it's how the system works. But it costs you real money. On $50,000 invested over 10 years, the difference between a 2.0% MER fund and a 0.20% ETF is roughly $12,000 in fees. That's money that stays in your pocket or stays in theirs.
What to say at the bank: "I'd like to open a TFSA. I'll manage my own investments." If they push back, you're allowed to open a self-directed account and buy your own funds or ETFs. You don't need their help. Our beginner investing guide walks you through the process.
Ranked from simplest to cheapest. Pick the one that matches your comfort level.
| Option | Cost (MER) | Effort | Best For | Minimum |
|---|---|---|---|---|
| Wealthsimple Managed | ~0.60% all-in | Zero effort | Hands-off investors | $1 |
| TD e-Series Funds | 0.28-0.47% | Low effort | Automatic monthly contributions | $100 |
| All-in-one ETFs (XEQT/VGRO) | 0.20-0.24% | Some effort | DIY investors comfortable placing trades | ~$30 (one share) |
| Bank mutual funds (Series A) | 1.8-2.3% | Zero effort | Only if employer plan — otherwise avoid | $500 |
My recommendation: If you're new to investing entirely, start with Wealthsimple Managed. Open a TFSA, deposit money, pick a risk level. Done. The 0.60% all-in cost is fair for a fully managed portfolio. Once you're comfortable (6-12 months), consider switching to TD e-Series or all-in-one ETFs to save on fees.
Your RRSP contribution room is 18% of your previous year's earned income (up to the annual maximum of ~$32,490 for 2026). If you just arrived and haven't filed a Canadian tax return yet, your RRSP room is $0. It starts building after your first year of earning income in Canada.
TFSA first, RRSP second — in most newcomer situations. The TFSA doesn't require earned income, has no withdrawal penalties, and is more flexible. Once your income puts you in a higher tax bracket ($55,867+ in 2026 for the 20.5% federal bracket), RRSP deductions become more valuable. See our detailed RRSP vs TFSA comparison.
Exception — employer RRSP match: If your employer offers a group RRSP with matching contributions, enroll immediately regardless of TFSA room. A 50-100% employer match is free money. Read our group RRSP guide for what to watch out for.
Bringing money from your home country: Canada has no limit on how much money you can bring in, but you must declare amounts over $10,000 CAD at the border (including cash, cheques, and securities). Once the money is in a Canadian bank account, you can invest it normally.
Foreign investments you already own: If you hold investments in your home country (stocks, mutual funds, property), you need to report them on your Canadian tax return if the total cost exceeds $100,000 CAD. This is the T1135 (Foreign Income Verification Statement). The investments themselves aren't taxed just for existing — but income from them (dividends, interest, capital gains) is taxable in Canada.
Tax treaties matter. Canada has tax treaties with many countries that prevent double taxation. If you're paying tax on investment income in your home country, you may get a foreign tax credit on your Canadian return. This gets complicated fast — talk to an accountant who specializes in newcomer tax situations for amounts over $100,000.
Don't sell foreign investments without tax advice. When you become a Canadian tax resident, you get a "deemed acquisition" at fair market value on your arrival date. Future gains above that value are taxable in Canada. If you sell investments you brought with you, you only pay Canadian tax on gains since you arrived — not on gains from before. An accountant can set this up properly. Getting it wrong means paying tax twice.
The First Home Savings Account (FHSA) is tailor-made for newcomers who plan to buy a home in Canada. You get a tax deduction on contributions (like an RRSP) AND tax-free growth and withdrawals (like a TFSA). It's both, combined.
You can contribute $8,000/year up to a $40,000 lifetime maximum. If you've never owned a home in Canada (or anywhere else in the last 4 years), you qualify. Use the deduction to reduce your Canadian taxes while saving for a down payment. See our full FHSA guide.
The priority order for most newcomers: Employer RRSP match (if available) → FHSA (if buying a home) → TFSA → RRSP. Fill accounts in that order for maximum tax efficiency.
You don't need thousands to begin. Open a TFSA, set up automatic contributions, pick a low-fee fund. Your future self will thank you.
How to Start Investing Low-Fee FundsNothing on this site is financial or tax advice. Tax residency, TFSA/RRSP rules, and foreign reporting requirements are complex and depend on your individual situation. Consult a tax professional familiar with newcomer issues. Immigration status does not affect your ability to invest but may affect account eligibility. Some links on this site are affiliate links.