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Introduction
Want to own a piece of the biggest U.S. companies like Apple, Microsoft, and Amazon? The S&P 500 tracks 500 of America’s largest corporations and is one of the most powerful long-term investments available.
The good news? You don’t need to live in the United States, Canadians can invest in the S&P 500 easily through ETFs and online brokers.
In this guide, you’ll learn step-by-step how to start investing in the S&P 500 from Canada 2025, the best ETFs to buy, which apps to use, and how to hold your investments tax-efficiently in your TFSA or RRSP.
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What Is the S&P 500 and Why Invest in It?
The S&P 500 is a stock-market index that represents the 500 largest publicly traded companies in the United States.
Why it matters:
- Covers 80% of the U.S. market value.
- Includes industry leaders like Apple, Tesla, and Nvidia.
- Historically averages 7–10% annual returns long-term.
Investing in the S&P 500 lets you own a slice of the entire U.S. economy without picking individual stocks.
Step 1 Choose Your Account (TFSA, RRSP, or FHSA)
Before buying anything, decide where to hold your investment:
- TFSA: Tax-free growth and withdrawals. Best for most Canadians.
- RRSP: Tax deduction on contributions and no U.S. withholding tax on dividends (from S&P 500 ETFs listed in the U.S.).
- FHSA: Great for first-time home buyers saving for a home while investing.
Open a TFSA or RRSP with Wealthsimple Trade
Step 2 Pick Your S&P 500 ETF
The easiest way to invest is through an ETF (exchange-traded fund) that tracks the S&P 500.
| ETF Name | Ticker | Currency | MER (Fee) | Provider |
|---|---|---|---|---|
| VFV | Vanguard S&P 500 Index ETF | CAD | 0.09% | Vanguard Canada |
| XUS | iShares Core S&P 500 ETF | CAD | 0.10% | BlackRock Canada |
| ZSP | BMO S&P 500 Index ETF | CAD | 0.09% | BMO Global Asset Management |
| VOO | Vanguard S&P 500 ETF (U.S.) | USD | 0.03% | Vanguard U.S. |
Tip: Canadians who invest via TFSA should prefer VFV, XUS, or ZSP (held in CAD). If using an RRSP, you can buy VOO in USD to avoid withholding tax on dividends.
Step 3 Open a Brokerage Account
You’ll need a broker to buy S&P 500 ETFs.
Top beginner-friendly options in Canada (2025):
- Wealthsimple Trade — Zero-commission trades and simple app.
- Questrade — Free ETF purchases and advanced features.
- National Bank Direct Brokerage — No-fee trading for Canadian and U.S. ETFs.
Compare platforms: Best Online Brokers in Canada 2025
Step 4 Decide How Much to Invest
Start small and stay consistent. Even $100 a month can build serious wealth over time.
Example: Investing $200 per month in the S&P 500 at 7% average returns for 20 years = over $100,000.
Use dollar-cost averaging to invest on autopilot, regardless of market conditions.
Step 5 Automate and Reinvest Dividends
Reinvest dividends and automate contributions to maximize compound growth.
- Use Dividend Reinvestment Plans (DRIPs) on platforms like Wealthsimple or Questrade.
- Set up auto-deposits so you buy every month without thinking about timing.
Over time, your dividends buy more shares, creating a powerful compounding cycle.
Step 6 Understand Currency and Tax Implications
When investing in the S&P 500 from Canada, you’ll be exposed to USD/CAD exchange rates.
Tips:
- Use CAD-based ETFs (VFV, XUS, ZSP) to avoid FX conversion fees.
- Hold USD ETFs (VOO) inside your RRSP to avoid 15% withholding tax on dividends.
- Keep records for capital gains if you sell in a taxable account.
Step 7 Stay Invested Long Term
The S&P 500 is a long-term wealth builder, not a get-rich-quick tool.
Don’t panic when the market drops, use it as a buying opportunity.
As Warren Buffett said, “The stock market is a device for transferring money from the impatient to the patient.”
Keep investing regularly and let compound growth work its magic.
FAQs
Can Canadians invest directly in the S&P 500?
Yes, through ETFs like VFV, XUS, ZSP, or VOO on Canadian brokerages.
Is it better to buy in TFSA or RRSP?
Use TFSA for flexibility and RRSP for tax shelter on U.S. dividends.
How much money do I need to start?
You can begin with as little as $100 and add regularly through automated investing.
Is the S&P 500 a good investment for beginners?
Absolutely. It offers diversification and long-term growth with low fees.
Conclusion How to Start Investing in the S&P 500 from Canada in 2025
Investing in the S&P 500 from Canada in 2025 is one of the smartest and simplest ways to build wealth over time.
Open a TFSA or RRSP, choose a low-cost ETF like VFV or ZSP, and automate your monthly investments.
Start today with Wealthsimple Trade
Or read next: Best ETFs for Canadian Investors 2025
