Robinhood App Canada: Alternative for Canadians

Robinhood is one of the most popular investing apps in U.S. with millions of customers. The app lets its users save on commissions when they trade stocks, options, and cryptocurrencies.

But is Robinhood available in Canada? What are the alternatives and how do they compare?

Is Robinhood App Available in Canada?

No. The app is currently unavailable in Canada and the company has not announced any plans to start operating here.

To open a Robinhood account, users must be 18 years or older, have a valid social security number, and be a U.S. citizen or legal resident.

As part of the account opening process, users are required to verify their identity using documents such as drivers license, bank statement, social security card etc.

Luckily, there are other investing apps and brokerages with similar features as Robinhood in Canada.

About Robinhood

Robinhood was founded by 2 former Stanford classmates in 2013 with a mission to democratize finance for all. That is, make investing accessible and friendly to everyone. Since its inception, the company has grown its user base to 13 million as at 2020.

Before Robinhood, anyone hoping to start investing would need to open an account with thousands of dollars and pay $5-$10 per trade. This all changed with Robinhood’s introduction.

Anyone in the U.S. can now start investing with $0 opening balance and no commissions. Interestingly, other U.S. brokerages have also dropped their commissions and moved to zero trading fees.

Robinhood is currently available in the U.S. only. The company announced plans to expand international, for example to UK in 2020, but these plans are currently on hold.

Robinhood Products

The following products are available through Robinhood

Stocks and Funds: Buy thousands of shares starting at $1

Options: Buy, sell and exercise options with no commissions

Robinhood Gold: The premium version of the app with access to research reports, quicker access to funds, 2.5% annual rate on margin over $1,000 and level II market data for just $5 per month.

Robinhood Crypto: Trade Bitcoin, Ethereum and other cryptocurrencies commission-free 24/7.

Cash Management: Earn interest on uninvested cash in your brokerage account. Comes with a debit card and access to over 75,000 free ATMs.

Robinhood App Key Features

Here are some of the main features of the app.

Commission-free Trading: Robinhood users can buy and sell thousands of shares and pay no commission. With many other brokerages charging about $10 to trade stocks before Robinhood, this was the app’s major selling point.

No minimum opening balance: Users don’t have to wait till they have thousands of dollars to start investing. They can start investing with as little as $1.

Read more: 10 Ways To Start Investing With Little Money

Fractional Shares: The apps lets users buy fractional users. Don’t have thousands of dollars to buy a unit of Amazon? No problem! Robinhood lets you buy a fraction at a time. And with no commissions, it’s a great way to gradually build up a position.

Earn interest on uninvested cash: including a customizable debit card and FDIC protection (up to $1.25 million)

Protection: Robinhood users have SIPC protection up to $500,000 (including $250,000 for claims for cash)

How Robinhood Makes Money

If you’re wondering how the company makes money with a commission-free account, you’re not alone.

Here are some of the ways Robinhood earns a revenue to stay in business.

1. Rebates from Market Makers

This is also known as payment for order flow and probably constitutes a large chunk of the company’s revenue. In fact, Robinhood earned about $180 million from this revenue source in the second quarter of 2020.

Payment for order flow is a practice whereby brokerages send their orders to a wholesale market maker instead of the Exchange directly. In return, the market makers pay them a rebate.

While it is a common practice, especially with the move to commission-free trading by many brokerages, it can lead to conflict of interest.

For example, brokerages may sell their order flow to the highest bidder rather than the one that provides the best execution for their customers’ orders.

Robinhood was fined $65 million in Dec 2020 for failing to disclose this revenue source on its website and not doing enough to get the best quotes for its millions of customers.

2. Monthly Fee for Robinhood Gold

The company charges $5 per month for the premium version of the app that provides bigger instant deposit. Even if only a fraction of its 13 million users as at 2020 are subscribed to Robinhood Gold, it will represent another substantial revenue source.

3. 2.5% per annum rate when users trade on margin

4. Interest on uninvested cash

5. Cash Management services

You can learn more about how Robinhood makes money here.

Robinhood Limitations

Robinhood has a great feature set but the app still falls short in a few places.

Limited asset types: While you can trade over 5,000 U.S. stocks and ETFs, options and American Depositary Receipts (ADRs), several other asset classes are not available. These include mutual funds, preferred stocks, bonds and fixed-income securities.

Tax-advantaged accounts are unavailable: Only individual taxable accounts are available for now; IRA and 401(k) accounts are not.

Limited customer support: There’s no online chat or phone number to call. Customer support is provided through email or a form on their website. Users can also find answers to many of their questions by checking their well-organized and detailed help centre.

Even with the limitations, Robinhood is good for people looking to open taxable accounts and trade stocks, options and cryptocurrencies.

Top 3 Robinhood App Canada Alternatives

Robinhood App Canada Alternatives

Canadians don’t have a perfect equivalent of Robinhood., but we have some alternatives that compare very well to the investing app.

Here are the top 3 alternatives to Robinhood in Canada.

1. Wealthsimple Trade

If the commission-free trades from Robinhood is the biggest draw for you, then Wealthsimple Trade is the best alternative for you in Canada.

It is the closest thing to Robinhood for Canada.

Wealthsimple Trade is an investing app from Wealthsimple, Canada’s most popular robo-advisor. Through the app, you can buy and sell thousands of stocks listed on both U.S. and Canada exchanges commission free.

Registered accounts (TFSA and RRSP) are also available on the app. So you can invest, grow and compound your money on a tax-free or tax-deferred basis.

Wealthsimple Trade started as a mobile only app but a desktop platform was introduced in 2020.

Wealthsimple Trade is Robinhood for Canada

Apart from the commission-free investing, here are some of the other great features of Wealthsimple Trade

  • No minimum account opening balance required so you can start investing with little money.
  • Trade using both taxable and registered accounts
  • Sleek and intuitive investing app – arguably the best in Canada
  • Ability to trade cryptocurrencies through Wealthsimple Crypto

Wealthsimple Trade Cons

Wealthsimple Trade is a great alternative to Robinhood for Canadians but there a few places where it falls short.

  • Trading of fractional shares is unavailable
  • There are no margin accounts
  • The available securities are limited for now. You can’t trade bonds, options or FX for example
  • You can’t hold USD cash in your account. That means you can only buy U.S. stocks with your CAD and be forced to pay the 1.5% currency conversion fees.
  • Limited market data. Stock quotes are delayed by up to 15 minutes.

Also, the registered account offerings is limited. Only RRSP and TFSA are available at the moment.

Check here for the best investments for non-registered accounts.

Wealthsimple Trade vs Robinhood App

So how does Wealthsimple Trade compare to Robinhood?

Both apps offer commission-free trading on thousands of stocks but there are some distinct features for both.

While you can trade options and fractional shares on Robinhood, they are not available on Wealthsimple Trade.

Wealthsimple Trade is perfect for people that are just getting started with investing. As you gain more experience and need more advanced products and strategies, you’ll probably have to move to another brokerage.

Get $10 welcome bonus when you invest your first $100

2. Questrade

Questrade is a full-fledged online brokerage firm that has been serving Canadians since 1999. Over the years, it has grown to be a viable alternative to investing through one of the big banks.

The brokerage is another alternative to Robinhood for Canadians. Here are some of its key features

Commission-Free ETF Purchase: You can buy thousands of ETFs listed on U.S. and Canadian stocks exchanges for free.

Low Commission Stock Trading: Buying stocks starts at just 1 cent but the minimum fee is $4.95 and a maximum of $9.95.

Several Account types: As a full-fledged brokerage, you can open a variety of account types at Questrade including RESP, RRSP, TFSA, LIRA, RDSP, Margin/Cash accounts and so on.

Learn more: Questrade RESP Review

Huge selection of securities: Trade stocks, bonds, options, FX, CFDs, precious metals and many more.

U.S. Dollar Cash: You can hold and trade in U.S. dollar. This saves you from the currency conversion fees that comes with Wealthsimple Trade.

Questrade is another great Robinhood Canada alternative

And if you’re looking for a more hands-on way to invest, you can invest through their robo-advisor – Questwealth Portfolios. The management fees starts is 0.25% for assets under $100,000 and it’s the lowest in Canada.

Get $50 Trade rebate or $10,000 managed for free through the link below.

Compared to Wealthsimple Trade, Questrade is suitable for both new and more experience traders and investors. It has more advanced tools, products and strategies.

Questrade Cons

Fees: The obvious drawback for Questrade is the limited commission-free trading. The brokerage is perfect if you intend to trade using ETFs only. Once you start buying stocks, the fees can quickly add up especially if you’re only investing small amounts at a time.

Minimum Opening balance: You need a minimum of $1,000 to start investing with Questrade. Compare this to Weathsimple Trade and Robinhood that let you start with as small as $1.

Questrade vs Robinhood App

Going by fees alone, Questrade isn’t a great alternative to Robinhood. You’ll pay some commissions to trade stocks, but at $4.95 the fees are cheaper than other brokerages in Canada.

You also need a minimum balance of $1,000 to get started on Questrade and fractional shares trading are not available.

Overall, Questrade is a good Robinhood alternative if you’re more interested in getting access to several investment products at lower fees in Canada.

3. TD GoalAssist App

TD GoalAssist App is another investing app from TD Direct Investing. The app is for beginners with limited features at the moment.

Here are some of its key features:

  • Zero commission on TD ETFs
  • $9.99 flat fee to trade stocks on major North American exchanges
  • Account is denominated in Canadian dollars only. That means you’ll be paying some FX conversion fees when you trade securities denominated in U.S. dollars
  • Create goals and monitor your progress
  • Educational videos to learn investing.

TD GoalAssist App Cons

  • Limited ETF offering. Only TD ETFs are available to trade
  • Fees of $9.99 is on the high side
  • Few account types: TFSA, RRSP and Cash
  • Currency conversion fees
  • Limited security types: You can’t trade options, FX and many other securities with TD GoalAssist app

Check this TD GoalAssist Review to learn more about the app and how it compares to other investing apps in Canada.

TD GoalAssist App vs Robinhood

If you’re just starting to invest in Canada, TD GoalAssist app may be right for you. With its educational videos and resources, it provides a way to learn about investing at a relatively low cost.

But it is not a great replacement for Robinhood especially if you’re hoping to trade frequently or use more advanced features.

Robinhood vs Canada Alternatives (Wealthsimple Trade & Questrade)

FeaturesRobinhoodWealthsimple TradeQuestrade
Minimum Balance$0$0$1,000
Asset TypesStocks, Options, ETFs, ADRs & CryptocurrenciesStocks, ETFs & CryptocurrenciesStocks, Options, ETFs, Bonds, GICs, FX, CFDs etc.
Stock Commissions$0$0Starts at $4.95 up to $9.95
ETF Trading Fees$0$0Buy: $0;
Sell: $4.95 up to $9.95
Mobile AppYesYesYes
Desktop AppYesYesYes
Sign-up BonusN/A$10 when you trade at least $100$50 trade rebate
Robo-advisor OfferingNoYes through Wealthsimple InvestYes through Questwealth Portfolios

Robinhood App Canada Alternatives: Which one to choose?

Which one should you choose from the 3 Robinhood alternatives in Canada above?

In my opinion, it’s really a choice between Wealthsimple Trade and Questrade.

Choose Wealthsimple Trade if:

You just want to trade stocks or ETFs and pay no commission. The app is perfect for you if you’re not interested in options, FX or other more advance asset classes.

Get Started with Wealthsimple Trade ($10 Bonus)

Choose Questrade if:

You plan to trade more advanced securities in the future. Questrade provides more security types and account types.

Get Started with Questrade ($50 Bonus)

Or open accounts with both of them and enjoy the best of both worlds.

There are other brokerage accounts in Canada but they are either too expensive or more suitable for advanced users. They include:

Problems with commission-free investing apps

The ability to trade with zero commissions is a great benefit especially when you can only invest small amounts of money at time.

But investors need to be aware of the behavioral issues. There’s the tendency to trade more often when commissions are out of the picture.

For example, the average Robinhood customer traded 9 times as many shares as E*Trade users, and as much as 40 times those of Charles Schwab customers.

Investment costs do matter and can eat into your returns. However, there are arguably more important factors that leads to investment success such as:

Learn more: 21 Investing Tips for Beginners

Often times, commissions can serve as a guardrail, forcing you to think through your investment options and make better decisions.

For example, say you want to invest $1,000 in the top 5 banks in Canada through Questrade. Knowing you would have to pay $4.95 per stock, or 2.5% percent, may force you to buy an ETF instead.

Luckily, Questrade allows commission-free ETFs purchases.

Read more: How To Build A Diversified Investment Portfolio (3 Quick & Easy Ways)

Robinhood Canada Alternatives FAQs

Is Robinhood available in Canada?

Unfortunately, Robinhood isn’t available in Canada at the moment. The app is only available to US citizens and residents.

What are some alternatives to Robinhood in Canada?

While Robinhood is unavailable in Canada for now, Canadians have some alternatives to choose from. Wealthsimple Trade is a no-fee investing app with limited features. Questrade is a full-service brokerage that lets you buy ETFs for free but charges to sell ETFs and trade stocks.

How does Robinhood make money?

Robinhood makes money from rebates collected from market makers, monthly fee for Robinhood Gold, lending stock to counterparties, interest on uninvested cash and so on.

What are the alternatives to Robinhood in USA?

Though Robinhood pioneered commission-free investing in the US, other companies have followed. Other commission-free investing apps and brokerages in the US includes TD Ameritrade, E*Trade, Charles Schwab, Tradestation etc.

Can I trade bitcoin and other cryptocurrencies?

Yes, Robinhood users can trade bitcoin, Ethereum and many other cryptocurrencies on the app at zero commissions.

Final Thoughts

There’s no perfect equivalent to the Robinhood app in Canada. Yes, you can get other investing apps with most of its features but not in a single app at the moment.

Even at that, some of the features will still be missing. For example, you can’t buy fractional shares at Wealthsimple Trade or Questrade.

But if you’re ready to start investing, choose one of the Robinhood Canada alternatives above. They have more than enough features for new investors.

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Simon is a CPA by day and a Personal Finance Blogger by night. With over a decade experience in financial services, he's passionate about personal finance, investing and helping people take control of their financial life.

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