Start with a TFSA, use the FHSA for your first home, choose robo-advisor or self-directed — and how to begin with just $50 per month. A practical starter guide with no fluff.
Time is more powerful than income, market-picking ability, or any investment product. The math is unambiguous.
The most important thing about investing in your 20s isn't finding the best fund or timing the market. It's starting. The difference between starting at 22 and starting at 32 is enormous — not because you're smarter or luckier, but because compound growth has a decade more to work.
That $358,000 difference came from the same $200/month. The only variable was time. No smarter decisions required.
The Tax-Free Savings Account is the right starting point for almost every Canadian under 35. Contributions are not tax-deductible (unlike RRSP), but all growth and withdrawals are completely tax-free. Key 2026 facts:
For young investors with income under ~$60,000, the TFSA is generally better than the RRSP because the RRSP tax deduction is worth less at lower marginal rates. Grow your money tax-free in a TFSA now; consider shifting emphasis to RRSP as income climbs. See our full RRSP vs TFSA comparison.
The First Home Savings Account (FHSA) was introduced in 2023 and is specifically designed for Canadians buying their first home. It combines the best features of both the TFSA and RRSP:
The FHSA is genuinely exceptional. You get a tax deduction AND tax-free growth AND tax-free withdrawal. There's no other registered account in Canada that does all three. If there's any chance you'll buy a home in the next 15 years, open an FHSA as soon as possible — even if you can only contribute $500 to start. You need to open it to start accumulating room.
You can also combine FHSA and Home Buyers' Plan (HBP) on the same purchase — up to $40,000 FHSA + up to $35,000 RRSP (via HBP) = potential $75,000 tax-sheltered down payment contribution. See our FHSA guide for full details.
You don't need thousands to start. Here's a practical playbook from zero to investing consistently.
Wealthsimple is the easiest starting point — open an account in 10 minutes, no minimum, mobile-first. Questrade is the better long-term platform if you'll eventually self-direct. NBDB (National Bank Direct Brokerage) has free ETF trading and no minimum — better if you're starting small and plan to build a self-directed portfolio.
Open the FHSA simultaneously if you're a first-time buyer. Even with $0 initially, the clock starts on your contribution room accumulation.
Automate a pre-authorized contribution from your chequing account. $50, $100, $200 — whatever is sustainable. "Pay yourself first" works because it removes the decision to invest each month. You adjust your spending to what's left, not the other way around.
Timing within the month doesn't matter for long-term investors. Set it and don't watch it.
For a TFSA with a long time horizon: XEQT or VEQT — globally diversified, 100% equities, ~0.20% MER. Buy it through Questrade (free ETF purchases) or NBDB (free all ETF trades).
If you don't want to self-direct yet: Wealthsimple Invest's Growth portfolio at 0.60% total cost. More expensive than XEQT but genuinely hands-off.
Don't overthink this. A broad global ETF in a TFSA is better than the perfect investment you spend months researching.
Set up the auto-contribution. Buy XEQT when the contribution lands. Check your account quarterly, not daily. The biggest threat to your investment returns isn't market volatility — it's your own reaction to market volatility.
When markets drop 20–30% (they will, multiple times in your investing lifetime), keep contributing. You're buying more shares at lower prices. The recovery is when the wealth is made.
Aim to increase your savings rate by 1% of income each year. As salary increases, resist lifestyle inflation — redirect a portion to your TFSA or FHSA. A goal: save 15–20% of gross income for retirement by age 35.
| Factor | Robo-Advisor (Wealthsimple) | Self-Directed ETFs (Questrade/NBDB) |
|---|---|---|
| Annual cost on $10,000 | $60 (~0.60%) | $20 (~0.20%) |
| Annual cost on $100,000 | $600 | $200 |
| Setup complexity | Very easy — 10 minutes | Moderate — need to buy your own ETF |
| Rebalancing | Automatic | Manual (once/year typically fine) |
| Emotional safety net | High — less temptation to tinker | Lower — you can see individual holdings |
| Best for | True beginners, busy people | Cost-focused, slightly more engaged |
The right choice depends on whether you'll actually stay invested when markets are volatile. If a robo-advisor keeps you from panic-selling, the extra 0.40%/year is easily worth it. See our 2026 robo-advisor comparison for full details.
| Account | 2026 Annual Limit | Tax Deduction | Tax-Free Growth | Tax-Free Withdrawal |
|---|---|---|---|---|
| TFSA | $7,000 | No | Yes | Yes (any time) |
| FHSA | $8,000 | Yes | Yes | Yes (first home purchase) |
| RRSP | 18% of income, max $32,490 | Yes | Yes | No — taxed at withdrawal |
Contribution limits and account rules are set by CRA and subject to annual changes. This is not financial or tax advice. Consult a qualified financial advisor for personalized guidance. TFSA over-contributions carry a 1%/month penalty — verify your available room at CRA MyAccount before contributing. Last updated March 2026.