Robinhood Canada: Alternative Investing Apps for Canadians

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by Enoch Omololu

Updated

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The Robinhood app is one of the hottest investment apps in the United States right now.

In fact, the app added more than 2 million new users in the first two months of 2021 and has been blamed by some to be responsible for the significant rise in day trading and the market upswings we have seen in recent times.

Whatever the case is, it is easy to see why Robinhood has such a draw. The commission-free trading app means you do not have to shell out $$ in fees to buy and sell stocks, ETFs, options, and cryptocurrencies.

Is the app available for Canadians to trade? What are the alternative options to save on trading fees?

Is Robinhood Available in Canada?

Unfortunately, Robinhood is not available in Canada. As per its terms of use:

Robinhood is only licensed to sell securities in the United States (US), to US citizens and residents, and will not permit anyone who is not a legal US resident to purchase or sell securities through its application until such time as it is approved to engage in the securities and investment business by the appropriate regulator(s) of a foreign jurisdiction.

– Robinhood

This does not stop US citizens and legal residents from using the app to trade outside of the United States.

Actually, the app is supported in all countries except Cuba, North Korea, Syria, Iran, and the Crimea region of Ukraine.

In 2015, Robinhood announced it was launching in Australia, and in 2019, it announced it was launching in the United Kingdom.

Both plans were later scrapped.

What is Robinhood?

Robinhood is a pioneer of commission-free investing in the United States and was founded by Vladmir Tenev and Baiju Bhatt.

The company offers a trading app and website where users can buy and sell stocks, Exchange-Traded Funds (ETFs), and options, and cryptocurrencies (Bitcoin, Ethereum, Dogecoin, etc.).

Robinhood is registered with the Securities and Exchange Commission and is regulated by Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC).

Its user base currently exceeds 13 million customers.

One major reason for the exodus of retail investors to Robinhood is its no-commission trading offer.

Robinhood Investing App

Robinhood – Main Features

Some key features of Robinhood include:

User-Friendly Mobile App: The Robinhood app is available on iPhone, Android devices, and the Apple Watch. It has a streamlined interface that makes it easy for newbies to trade on the go using their smartphone and in just a few clicks.

Trading is also available through a web-based platform.

Commission-Free Trading: It offers access to free stock, ETF, options, and cryptocurrency trades. This lack of trading fees or commissions is a significant saving for low-volume investors who are trading small amounts.

No-Minimum Balance: You can trade with whatever cash you have starting at $1. It also offers fractional shares so you can buy parts of a share.

Robinhood Gold: This service offers access to research reports, analysis, margin trades, and more starting at a low monthly fee of $5. Users get Level II market data and instant deposits.

High-Yield Savings: Access to a high yield savings account that pays interest on your uninvested cash and comes with a debit card and Federal Deposit Insurance Corporation (FDIC) insurance.

Where Robinhood Falls Short

Robinhood only offers a taxable account so you can’t use it for your 401(k) or IRA.

While the platform is commission-free, you may come across a minimal regulatory or trading activity fee on “sell” transactions.

Lastly, the app does not offer trading in bonds, precious metals, or mutual funds.

Robinhood Alternatives in Canada

There are some alternatives to Robinhood in Canada.

The first discount brokerage option to save on fees is Questrade. Following that, you can also use Wealthsimple Trade, a zero-commission stock and ETF app recently launched by Canada’s most popular robo-advisor.

Let’s dig in further to see how they compare.

Questrade Investing

1. Questrade

Questrade is Canada’s largest independent discount broker platform. It offers commission-free trading when you purchase ETFs.

It has some similarities to Robinhood and its key features include:

Multiple Trading Platforms: It has a browser-based platform, a downloadable desktop platform, and a mobile app. Also, active traders can access advanced trading tools and market research.

Commission-Free ETFs: No trading commissions apply when you purchase ETFs. However, trading fees apply when you sell ETFs, and when you buy and sell stocks, mutual funds, options, and more.

Account Types: Questrade offers trading inside registered and non-registered accounts including RRSP, TFSA, RESP, LIRA, RRIF, LIF, corporate and margin accounts.

Available Securities: You can trade stocks, ETFs, options, mutual funds, bonds, GICs, foreign exchange, precious metals, CFDs, and IPOs.

Market Data: A basic Questrade account offers unlimited Level 1 snap quotes. For a fee, you can also access Level 1 and 2 streaming data.

Security: Questrade is a member of CIPF and the Investment Industry Regulatory Organization of Canada (IIROC). Customer accounts are protected with up to $10 million if the company goes bankrupt.

Promotion: New Questrade clients receive $50 in free trades when you open an account and fund it. To start trading, you need a minimum account balance of $1,000.

Questrade also has a managed investment service, referred to as Questwealth Portfolios.

Where Questrade Falls Short

It only offers commission-free trading when you buy ETFs. If you are selling ETFs, there is a $4.95 to $9.95 fee per transaction. Stocks, mutual funds, and options cost up to $9.95 per trade.

Questrade clients can only start trading when they have at least $1,000 deposited in their account.

Get Questrade

2. Wealthsimple Trade

Wealthsimple Trade is an investing app for trading thousands of stocks and ETFs listed on Canadian and U.S. exchanges.

Similar to Robinhood, the app does not charge a commission and has no minimum balance requirements.

Some salient features of Wealthsimple Trade include:

User-Friendly Mobile App: The app is available on the App Store and Google Play where it’s highly rated by users (4.7/5 rating on iOS). Its clean and intuitive interface makes it easy for beginners to quickly learn how to place trades within minutes of joining.

You can also use the desktop version if that’s your preference.

Commission-Free Trades: You don’t pay a trading fee to buy or sell stocks and ETFs. This is easily a saving of $5 to $10 per trade compared to other brokerage platforms.

Account Options: You can open a taxable account or trade within your RRSP or TFSA accounts.

$0 Account Minimum: Open an account with as little as $1. There is no minimum deposit required to get started.

Security: Wealthsimple Trade accounts enjoy protection under the Canadian Investor Protection Fund (CIPF) up to $1 million in the event that their custodian becomes insolvent. The app also uses bank-level encryption to protect your account.

Fractional Shares: You can buy fractions of a share and avoid paying thousands of dollars for the whole share. Fractional shares available on Wealthsimple Trade include Amazon, Google, Tesla, Microsoft, Apple, and several others.

Wealthsimple Crypto: You can sign-up to trade cryptocurrencies using Wealthsimple Crypto. Bitcoin and Ethereum are currently available to trade on a beta basis.

Promotion: New Wealthsimple Trade clients get a $50 cash bonus after depositing and trading at least $150 worth of stocks or ETFs within their first 45 days.

Wealthsimple also offers an automated managed investing service through its robo-advisor platform, and a savings account that pays interest on your balance.

Where Wealthsimple Trade Falls Short

You can’t trade options, bonds, or mutual funds on the platform, and they don’t offer a margin account.

You can only open a personal non-registered account or two types of registered investment accounts (RRSP and TFSA).

Joint accounts, LIF, RRIF, RESP, and RDSP accounts are not available. It offers these other accounts through Wealthsimple Invest.

A foreign currency exchange fee applies when you make USD-denominated trades, and the market data provided is delayed by 15 minutes.

Get Wealthsimple Trade
Wealthsimple Trade App

Wealthsimple vs. Robinhood vs. Questrade

Below is a quick snapshot of how Wealthsimple, Robinhood, and Questrade compare.

FeaturesWealthsimpleRobinhoodQuestrade
Account minimum$0$0$1,000
ETF commissions$0$0$0 when buying; up to $9.95/trade when selling
Stock commissions$0$0$4.95 to $9.95/trade
Other fees1.5%x currency exchange fee for USD trades$0 for options; $5 monthly fee for access to Robinhood Gold and $1,000 of margin for 30 daysCan avoid the currency exchange by holding USD;
options cost $9.95 + $1/contract;
Investment typesStocks, ETFs, cash account via Wealthsimple Cash; cryptocurrency via Wealthsimple CryptoStocks, ETFs, options; cryptocurrency via Robinhood CryptoStocks, ETFs, options, mutual funds, bonds, CFDs, IPOs, international equities, GICs, FX, precious metals
Account typesRRSP, TFSA, and personal non-registeredPersonal taxable accounts; margin accountsRRSP, TFSA, RESP, LIRA, RIF, margin, corporate, trusts, estate, etc.
Mobile trading platformYesYesYes
Desktop-trading platformNoYesYes
Market research toolsLimitedVersatile; level II market data available via Gold accountVersatile; streaming data (level I&II) costs an extra $$
SecurityCIPF protection, encryption, 2FASIPC protection up to $500,000; 2FACIPF protection up to $1 million; DIGICERT encryption; $10 million private insurance
Promotion$50 cash bonus when you fund your account and trade at least $150 in stocks within 45 days of opening itN/A$50 in free trades when you open an account and deposit at least $1,000
Other accounts offeredOnline wealth management service through Wealthsimple Invest; socially responsible investing, Halal investing, and VIP accountsCash management accountManaged investing service via Questwealth Portfolios; socially responsible investing
ApplyWealthsimple TradeN/AQuestrade
Account reviewLearn moreLearn more

Robinhood Canada Alternative FAQ

What is the equivalent of Robinhood in Canada?

Canadians can use Wealthsimple Trade to buy stocks and ETFs for free similar to Robinhood or use Questrade for free ETF purchases. If you are interested in cryptocurrency, Wealthsimple Crypto offers crypto trading.

In which countries is Robinhood available?

The app is only available to US citizens and legal residents who can use the app to trade even while outside of the U.S. in most countries. Here are the countries where it’s not available to US citizens.

Is Wealthsimple available in Canada?

Wealthsimple portfolios are available in Canada, the United States, and the United Kingdom. Their commission-free trading app, Wealthsimple Trade, is only available in Canada.

Can foreigners use Robinhood?

To use Robinhood, you must have a valid U.S. Social Security Number, be a citizen or permanent resident, and have a legal U.S. residential address.

Is day trading legal in Canada?

Day trading involves holding a stock or security for one day or less before selling it. Day trading is legal in Canada, but that doesn’t mean you should do it. Day trading is a high-risk trading strategy that can cause you to lose a lot of money… including your shirt.

Have you tried Wealthsimple Trade or Questrade? Tell us about your experiences in the comments.

Robinhood Canada: Investing Apps Like Robinhood in Canada
4.8

Summary

Is Robinhood available in Canada? Learn about commission-free trading app alternatives including Wealthsimple Trade and Questrade plus a Wealthsimple vs Robinhood vs Questrade comparison.

Robinhood Canada: Alternative Investing Apps for Canadians

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Author

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Enoch Omololu

Enoch Omololu is a personal finance expert and a veterinarian. He has a master’s degree in Finance and Investment Management from the University of Aberdeen Business School (Scotland) and has completed several courses and certificates in finance, including the Canadian Securities Course. He also has an MSc. in Agricultural Economics from the University of Manitoba and a Doctor of Veterinary Medicine degree from the University of Ibadan. Enoch has a passion for helping others win with their personal finances and has been writing about money matters for over a decade. His writing has been featured or quoted in The Globe and Mail, Winnipeg Free Press, Wealthsimple, Financial Post, Toronto Star, Credit Canada, MSN Money, National Post, CIBC, and many other personal finance publications.

His top investment tools include Wealthsimple and Questrade. He earns cash back on purchases using KOHO, monitors his credit score for free using Borrowell, and earns interest on savings through EQ Bank.

2 thoughts on “Robinhood Canada: Alternative Investing Apps for Canadians”

  1. Thanks Enoch! Always great information from you. I am a 50+ year old with no prior knowledge of investing, but have a healthy RRSP with extortionate fees from one of the big names – after reading your columns (as well as others) I am now saving $$$ in fees via Wealthsimple invest for RRSP and TFSA and am now also the proud owner of a Wealthsimple Trade account. I play it safe on WST by investing only in ETFs for the most part, but it offers me flexibility, which I love. The only thing I don’t really like on WST is the length of time it takes for funds to be made available for trading. I don’t need protecting from myself.

  2. This is a great idea for an article. I feel that Robinhood gets a lot of the credit for pioneering commission-free trading. However, now that there are so many similar apps popping up, there is no need to flock to Robinhood (even if it were available in Canada). Additionally, I know that Robinhood was recently under a lot of scrutinty for limiting the trades that their users were able to make. It’s good to know what the alternatives are and how they stack up. Thanks for sharing!

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