Canadian citizens above the age of 18 can open a TFSA (Tax-Free Savings Account) in which you can contribute up to $6000 annually. This can be in the form of stocks or other securities. You can also use an RRSP (Registered Retirement Savings Plan) where you can contribute a higher sum which will be taxable, unlike the TFSA which is completely exempt from taxes.
Canadian residents can buy stocks through various methods. The most common way is through an 'Online broker' and other 'Do-It-Yourself Brokers'. These brokers charge a small commission on your transaction and provide you with the platform to analyze and transact in securities. Apart from traditional brokers, there are some other ways to purchase stocks, let's find out about them.
There are some alternatives to but a share without a broker. The most convenient and effective way is to buy shares in a TFSA (Tax-Free Savings Account).
A TFSA is a great way to invest in stocks without any broker. There are certain benefits to a TFSA account. Any Canadian citizen above the age of 18 is eligible to open this account, and the maximum amount of money that can be contributed towards this account is $6000 annually. This will be completely Tax-Free and the gains or interest earned on the capital will also be tax-free at the time of withdrawal.
The second way is the buy stocks through the RRSP (Registered Retirement Savings Plan). You can contribute a maximum of 18% of your previous year's income or up to $27,830. The contributions towards this account offer a reduction from your taxable income, but the gains are taxed under ‘income’.
Apart from these two methods, there are various other online brokers that charge zero commissions on the purchase of stocks. You can use them to purchase any stock without any extra charges. You will also get the added guidance of a broker which might help to take better and informed decisions on your stock purchases.