Between exams, coffee runs, and figuring out what you want to do after graduation, investing can feel like yet another intimidating “adulting” task.
I get it—I’ve been there. I have a Bachelor of Commerce with a concentration in finance, and I am currently pursuing my Master of Business Administration with a specialization in financial management, so I have spent plenty of time breaking down these concepts.
Understanding the basics now can make the whole idea way less scary. Here’s a primer on the main investment accounts in Canada, the types of investments they can hold, and how students often get started.
Why Learn About Investing in Uni?
Investing is essentially letting your money grow in the background while you’re busy doing life. Thanks to compound growth (your money earns returns, and then those returns also earn returns), even small amounts can build up over time. Think of it as planting tiny financial seeds that keep growing while you’re focused on essays, jobs, and everything in-between.
Meet Your Investment Accounts
When Canadians talk about investing, they usually mean using special registered accounts. These are like containers with specific rules about deposits (called contribution room) and how earnings are taxed.
Tax-Free Savings Account (TFSA):
A TFSA is a special account where you can hold investments, and any money you make (growth, dividends, and interest) is completely tax-free. The government gives you a set amount of contribution room each year. This isn’t free money, but rather the maximum you’re allowed to deposit.
For example, if you turned 18 in 2022, you’d have $26,500 in total room by 2025 if you’ve never contributed before. If you take money out, that exact amount of room gets added back the following year, on top of the new annual limit.
Important: If you go over your contribution room, the CRA charges a penalty of 1% per month on the excess. So while the TFSA is powerful, it’s worth checking your limit through your online CRA account before you deposit. For more information on contribution room visit the Government of Canada website on TFSA Contributions.
Registered Retirement Savings Plan (RRSP):
An RRSP is meant for retirement savings. When you put money in, you can deduct that amount from your taxable income, which can mean paying less tax today. Later, when you take the money out in retirement, it’s taxed as income. The idea is that by then your income (and tax rate) will likely be lower, so you’ll save overall.
Your contribution room is the maximum you’re allowed to put in. Each year, it equals 18% of what you earned the year before, up to a set maximum (in 2025, that’s $32,490). If you don’t use it all, the unused room carries forward into future years.
Example: If you made $20,000 last year, you’d earn $3,600 of RRSP contribution room for this year.
First Home Savings Account (FHSA):
The FHSA is a newer account designed to help Canadians buy their first home. It combines the perks of both a TFSA and an RRSP:
- Like an RRSP, your contributions can reduce your taxable income (you might get a smaller tax bill now).
- Like a TFSA, the money inside grows tax-free, and you don’t pay tax when you use it to buy your first home.
Your contribution room is up to $8,000 per year, with a lifetime maximum of $40,000. If you don’t contribute the full $8,000 in a year, you can carry forward up to $8,000 of unused room to the next year.
Example: If you only put in $5,000 this year, next year you’d have $11,000 of room ($8,000 new + $3,000 carried over).
If you decide not to buy a home, you can transfer the money into an RRSP without paying tax, so it still helps you save for the future.
What Can Go Inside These Accounts?
The accounts themselves are just containers. Inside, you can choose different types of investments:
- ETFs (Exchange-Traded Funds): Funds that hold many different stocks or bonds. All-in-one ETFs (like VFV, XEQT, ZBAL) are examples often used by beginners because they’re diversified with one purchase.
- Stocks: Shares of individual companies. Higher risk, more research.
- Bonds & GICs: Lower-risk, steadier options.
How Students Often Get Started
For many students, the first step is simply opening a TFSA. Platforms you can use look like:
- Bank online platforms (convenient if you already bank there).
- Discount brokerages like Questrade or Wealthsimple Trade (DIY style, where you place trades yourself).
- Automated investing services like Wealthsimple Invest (hands-off, they build and manage a portfolio of ETFs for you, for a small fee).
Some students set up automatic transfers—for example, $25 or $50 a month—to build consistency. Inside the account, one option commonly used is an all-in-one ETF, since it spreads money across different investments without extra work.
Checking your contribution room is key. You can view it by logging into your CRA My Account, which shows your TFSA and RRSP limits so you avoid over-contributing.
The Bottom Line
Understanding how these accounts and investments work is a great first step. Whether or not you start now, knowing the terms—TFSA, RRSP, FHSA, ETFs—makes money talk feel way less overwhelming. It’s like learning the syllabus before the course begins: once you know the basics, everything else feels more manageable.
Think of it this way: while you’re powering through assignments and planning your future endeavours, your financial knowledge can quietly be growing in the background too.