Is Robinhood in Canada? Nope, But These Are the Best Alternatives

Is Robinhood in Canada? If you’re itching to invest the easy way, you’ve probably heard of Robinhood. The app has revolutionized the US investing landscape and is among the most reliable names out there. After all, it’s known for being easy to use, affordable, and fun.

So it comes as no surprise that new investors are wondering if they can use Robinhood in Canada. The answer is no, but fear not. We’ve rounded up the best alternatives to Robinhood in Canada.

What is Robinhood?

Founded in 2013, the Robinhood app was developed by co-founders Vlad Tenev and Baiju Bhatt. The vision was simple yet groundbreaking: to make investing accessible to all, not just those with considerable wealth or financial know-how. Taking its name from the legendary outlaw who stole from the rich to give to the poor, Robinhood aimed to bring financial market participation to the masses.

The platform is truly a discount broker with no stock or cryptocurrency trading fees. You can also use it to invest in gold and options. And rumour has it that the company is planning to introduce some more products in the future. But, it does have some flaws as it doesn’t offer mutual funds, bonds, or retirement accounts.

The company is one of the fastest-growing apps in this niche and gives users the option to access their portfolios through the web portal or mobile app. The ease-of-use is one of its biggest value propositions for users.

How does Robinhood work?

Robinhood operates under a freemium business model. The basic functionalities, like buying and selling financial instruments, come at no cost. However, for a premium, users can access additional features such as extended trading hours, instant access to deposits, and professional research reports through its Robinhood Gold subscription service.

To create an account, a user must be at least 18 years old, have a valid Social Security Number, and be a U.S. citizen, U.S. permanent resident, or have a valid U.S. visa. The sign-up process is relatively straightforward, involving a few essential personal and financial details for regulatory compliance and risk management. But in just a few minutes, you’re off to the races.

For Stocks: Best alternatives to Robinhood in Canada

Just like the US, Canada now offers free stock trading. As mentioned earlier, there are no market-makers in Canada but you will find a lot of Canadian brokers that offer zero-commission trades by executing their own orders. Some, however, may come with conditions such as minimum investments or fees on foreign currency conversion.

Compare online brokerages to pick the right one. We have covered some of the top Canadian alternatives to Robinhood below. Let’s have a look:

Wealthsimple Trade

Wealthsimple Trade is the go-to option for Canadians who want to enjoy free stock trading. And it gets bonus points for integrating a crypto trading platform with the Wealthsimple Trade app. It’s a safe platform with some great products and perks. This table defines the main similarities between the two and why Wealthsimple Trade can be a great Robinhood alternative in Canada:

As you can see, both these platforms are nearly identical. However, upon close inspection, you will find that Wealthsimple Trade is different with some great pros including the ability to trade RRSP, TFSA, and non-registered accounts. Robinhood doesn’t offer this feature.

While both platforms are free to join and use, Robinhood offers a paid program called Robinhood Gold, which costs $5 per month. Wealthsimple Trade has no such plans. Also, both companies offer mobile apps and have no minimum requirements.

You will be able to trade not just Canadian but US stocks as well, but they come at a price. There is a 1.5 percent base conversion fee for trading US stocks. The no-fee option only applies to Canadian ETFs and stocks.

Qtrade Direct Investing

Qtrade Direct Investing stands as a Canadian brokerage under the ownership of the esteemed financial services entity Aviso Wealth. Renowned for its appealing pricing structure, Qtrade distinguishes itself with its low commission fees on stocks, ETFs, bonds, and mutual funds, particularly when compared to its industry counterparts. The Qtrade Investor platform, your gateway to the markets in real-time, offers effortless access.

This platform also encompasses an array of comprehensive research tools, enabling you to not only define your objectives but also uncover fresh investment prospects and conduct thorough portfolio evaluations. In terms of pricing, stock trades command a fee of $8.75 per transaction, while options incur an additional $1.25 per contract. Noteworthy is the absence of trading commissions on any of the 105 exchange-traded funds available for purchase and sale. Qtrade also presents Morningstar as a valuable resource for information.

Account maintenance carries a fee of $25 per quarter, yet this can be waived if your account satisfies any of the subsequent conditions: maintaining a balance surpassing $25,000; completing a minimum of 8 billable transactions within the preceding 12 months; accomplishing at least 2 billable transactions within the last quarter; initiating a systematic investment plan of no less than $100 per month (or $50 per month for individuals aged 18 to 30).

The initiation of a brokerage account necessitates no minimum amount. In a bid to enhance your investment experience, Qtrade offers a selection of 100 commission-free ETFs, augmenting the appeal of its offerings.

TD Easy Trade

TD Easy Trade has found immense fame in the last few years by constantly evolving and offering new features. It’s a trusted broker that offers some no-fee trades with great benefits. This table defines the main similarities between TD Easy Trade and Robinhood:

Let’s make it clear that TD Easy Trade offers a limited number of free trades. You will enjoy 50 commission-free stock trades per year. There’s, however, no limit on free TD ETFs.

On the downside, TD Easy Trade doesn’t offer fractional trades. This might deter some users since fractional shares can be a great way to reduce the risk and start with little money. But, TD Easy does have some great perks as well including more assets. You can choose short sales, no-load, no-free mutual funds, and also futures. Robinhood presently doesn’t offer these features.

TD Easy is also said to be suitable for new users as it comes with Robo advisory. On the plus side, penny stocks and Forex are also available.

Both options are straightforward and use similar technologies. Still, there can be some confusion when it comes to TDA fees. It isn’t completely free. Futures will cost you $2.25 per contract and there is a $0.65 per contract option fee on some assets.

Desjardins Online Brokerage

Desjardins Online Brokerage, also called Disnat, is another Canadian discount broker that is considered a reliable Robinhood alternative in Canada. Here’s what’s in common between the two platforms:

Unlike Robinhood, Desjardins Online Brokerage has a minimum of $1,000. We suggest that you try demo accounts or other platforms if you don’t know much about trading before giving it a try as you will not be able to start with a smaller amount. This can be a major drawback for some.

Stocks, ETFs are free. You can also trade fixed-income assets for $50 per trade. Options are available but at a fee of $1.25 per contract with a minimum of $8.75. While mutual funds are free, you may have to pay up to $45 if you don’t hold these for at least 90 days. There are also minimum purchase requirements for bonds ($5,000) and bills ($10,000).

These limitations make Desjardins Online Brokerage more suitable for experienced investors. Also, only consider this option if you are willing to be active as the inactivity fee is $30 per quarter. An account is considered inactive if there are less than 6 trades in the last 12 months. You can avoid this fee by keeping your portfolio above $15,000. There are also discounts for new users that fall under 30 years of age.

For crypto: Best alternatives to Robinhood in Canada

A major reason Robinhood has found such immense success is because it allows users to trade cryptocurrencies. You can currently trade 7 digital coins on Robinhood including Bitcoin, Bitcoin Cash, Bitcoin SV, Dogecoin, Ethereum, Ethereum Classic, and Litecoin. Just like stocks, you can buy and sell digital coins for free.

Besides Wealthsimple Trade, there are several other Robinhood alternatives in Canada that offer quick and easy crypto trading. Here are some of the best options:

Bitbuy

Bitbuy is a Robinhood alternative that has a lot in common with the US brokerage.

A look at the chart above and you will see that the two platforms are very similar. Both offer seven cryptos but the options differ. Originally called InstaBT, Bitbuy supports Bitcoin, Bitcoin Cash, Ethereum, Litecoin, Ripple, and Stellar. Bitbuy supports fiat currencies and even offers Bitcoin insurance with Knox.

Both offer analytical tools and live streaming of prices. On the downside, there is a maximum trading limit on Bitbuy. You cannot trade more than $50K in a day. There are no such limits on Robinhood, which also offers free withdrawals. On Bitbuy, you will have to pay a small withdrawal fee based on your withdrawal method.

Shakepay

Shakepay has proven to be a reliable name due to its no-fee structure. A licensed and regulated name, it is considered a safe Robinhood alternative and comes with some exciting pros.

Unlike Robinhood, Shakepay offers only two currencies: Bitcoin and Ethereum. You can trade both for free. Instant deposits are available and withdrawals are free.

There are no monthly or yearly charges. The company makes money through spreads that are fairly priced. We enjoyed using the mobile app and found customer service to be excellent as well.

Is Robinhood Coming to Canada?

Not anytime soon. Robinhood uses market-makers, i.e.: an organization that operates as a wholesale buyer and seller so that there’s always enough trading volume to perform transactions without issues. This is why you are able to buy and sell stocks and other assets without having to wait. We don’t get the same flexibility with other assets like cars and houses.

Robinhood makes money through market-makers as they pay the company for the bid to execute trades. In return, market-makers make money through ‘spreads’, which is the difference between the buying and selling price. This is important for businesses like Robinhood that charge no trading fees.

Such a model, however, hasn’t been seen in Canada as it is not legal in the country. Canada restricts brokers from using market-makers. Businesses are lawfully required to complete all transactions themselves for increased transparency. This requirement means Robinhood cannot make money through market-makers, and thus cannot offer free trades in the country.

There still are some names in Canada that offer free trades. The company hasn’t given official statements on entering Canada and there’s no news on when it may happen, if ever. However, we must mention that US residents or citizens who move or travel to Canada for any purpose will be able to use their Robinhood account from within Canada without any issues.

It prohibits Canadians from opening an account but the website and app work without any hiccups. Canadians who move to the US can create an account and be able to use it in Canada for as long as they still hold a valid permit. Sadly, it doesn’t look like the app will launch in Canada in the near future. Robinhood’s attempts to enter global markets haven’t been very successful and it even had to close its UK branch after a test run.

Why is Robinhood so popular in the United States?

Robinhood has grown by leaps and bounds in the last few years and is said to be holding more than $80 billion in assets. Its claim to fame can be attributed to a few key factors. First, it successfully tapped into a younger demographic that had largely been left out of the investment world. Its sleek, intuitive interface appealed to millennials and Gen Z, who became eager to participate in the world of finance.

The app also seems to have popularised the idea of fractional trading and brought risky trades back into the fold. The company is credited for bringing retail investment to Wall Street and showing that anyone can trade if they have the right tools.

Second, the no-commission model made investing more affordable. Traditional brokerages typically charge a fee for each trade, but Robinhood’s commission-free approach made it more accessible to those with less capital. Some experts credit the app’s ‘free trading’ as the company’s main success because it came at a time when other brokers were charging $4 to $5 per trade.

Finally, Robinhood has capitalized on the surge of interest in personal finance and investment, driven in part by the economic conditions and a growing culture of financial literacy among younger generations. The ease of use and accessibility of the app has made it fun and easy for people to take their first steps into the world of investing.

Robinhood controversies to be aware of

To clear the air, Robinhood is regulated by the Financial Industry Regulatory Association (FINRA) and the Securities Exchange Commission (SEC), and currently has more than 1.6 million people on a waitlist for its growing crypto wallet. Despite regulatory oversite and the app’s wild popularity, Robinhood has found itself in some hot water.

Now a public company, the road to the market wasn’t smooth and Robinhood had to pay nearly $70m for misleading users and causing them huge losses. The business was in a similar situation when the company got sued for enacting trading restrictions against Gamestop and other meme stocks.

Despite winning the lawsuit, Robinhood’s brand name took a hit due to the case. In addition, it has also received criticism due to data breaches. The brokerage house seems to be working on its flaws and is said to be more secure today thanks to encryption and The Transport Layer Security (TLS) protocol. Also, funds are protected up to $250,000 for cash claims and $500,000 for securities.

But then in 2021, the now infamous GameStop fiasco uncovered another dark side of the beloved app that users weren’t aware of. Robinhood has faced criticism for its “payment for order flow” model, where it sells users’ orders to market makers, leading to potential conflicts of interest. And at the height of the GameStop frenzy, the app froze trading which caused missed opportunities that resulted in many users losing money. This move was controversial and resulted in accusations of market manipulation and siding with institutional investors over individual traders.

FAQs About Alternatives to Robinhood in Canada