Let’s go ahead and get this out of the way: if you’re looking for Robinhood in Canada, you’re not going to find it. As of right now, the famous trading platform is not available to Canadian investors.
But don’t let that discourage you. Fortunately, Canada has some of the best online brokerages out there. If your goal is to find a low-commission investing platform with an intuitive interface and the option to buy stocks, ETFs, cryptocurrencies, and more, then stay with us — we’re going to break down the alternatives to Robinhood.
What is Robinhood and why is it not available in Canada?
Robinhood is a free trading platform, mobile app, and website that offers commission-free investing and no minimum deposits to its users in the United States. Those who trade through Robinhood can buy and sell a range of investments, including stocks, options, cryptocurrencies, exchange-traded funds (ETFs), and options.
Robinhood’s almost sole claim-to-fame is its commission-free investing. Before Robinhood, American investors had to pay money for each trade, usually around $5 to $10. Additionally, they had to open an account with a minimum deposit, typically a few thousand dollars. The founders of Robinhood — two Stadford graduates, Vladimir Tenev and Baiju Bhatt — thought this was ridiculous. They sought to create a platform that was more “democratic:” no fees, no minimum requirements, no commissions. And that, in a nutshell, is what Robinhood is.
Since launching in 2013, Robinhood has attracted millions of investors to its platform. In fact, their business has been so successful, many trading platforms have followed suit, lowering their barriers to entry with no trading-commission and zero minimum deposits.
Despite that success, Robinhood has not expanded its trading platform outside the United States. That doesn’t mean they don’t have plans to expand. We know, for instance, that Robinhood announced plans to expand to the United Kingdom by July 2020, though those plans were cancelled due to the pandemic ravaging the country at that time. We also know, from a tweet sent in 2015, that Robinhood does have its eye on its neighbor up north. As of today, however, the company has not announced plans to expand internationally, not to Canada, nor anywhere else.
What are the best alternatives to Robinhood?
Notwithstanding its success, Robinhood isn’t perfect. In fact, even if it was available in Canada, you would be hard pressed to say it was the best trading platform here, which is good news for you. If you’re looking for the best online brokerages in Canada, here are three great alternatives to Robinhood.
1. Wealthsimple Trade
Since its inception in 2019, Wealthsimple has become one of the best alternatives to Robinhood in Canada.
Like Robinhood, Wealthsimple offers no trading commissions, no account maintenance fees, and no minimum deposits to open an account. You’ll also get a sign-up bonus simply for opening an account and making a cash deposit. It doesn’t get much better than that, right?
Through the Wealthsimple app, you can trade stocks, ETFs, and cryptocurrencies (as of right now, you can’t trade options). You can also open registered retirement accounts (such as a TFSA and RRSP) within your account, helping you take advantage of certain tax benefits.
Perhaps the only downside to Wealthsimple is the foreign conversion fee of 1.5% for all USD-denominated trades. This isn’t totally outlandish for a Canadian broker (most charge an exchange rate). But it’s something to be aware of, especially if you want to trade USD stocks or ETFs frequently, as you’ll pay the fee for every trade.
Another strong alternative to Robinhood is the trading platform, Qtrade.
Qtrade has an extremely simple interface that makes it perfect for beginners and experts alike. You don’t need a minimum deposit to open an account, and accounts come in a number of different types, such as an RRSP and TFSA.
Qtrade doesn’t have commission-free trading, though it does offer fair and transparent prices. You’ll pay a flat rate of $8.75 per trade, with a lower $6.95 rate if you conduct more than 150 trades per quarter or have more than $500,000 with your client ID. Paying a fee may seem like a bummer, but, when compared with other trading platforms, Qtrade’s fees are much cheaper than its competitors.
That said, Qtrade does offer commission-free trading on over 100 ETFs, which can be perfect for the beginning investor. Since these ETFs offer stocks in a wide variety of industries (from energy to precious metals), not to mention bond ETFs, too, you could reasonably build a well-diversified portfolio on low-fee funds without paying a dime on commissions.
One potential setback to Qtrade: you might have to pay a $25 quarterly account maintenance fee. Though this fee is fairly small in comparison to other trading platforms, you could get it waived if you meet one of these conditions:
- You have an account balance of $25,000 or more.
- You make a recurring deposit of $100 or more per month.
- You’re between the ages of 18 and 30 and you set up a monthly deposit of $50 or more.
- You make 2 or more commissionable equity or options trades in the last quarter or 8 or more commissionable equity or options trades in the last year.
Fees notwithstanding, Qtrade offers a wide variety of features, from easy-to-understand research to an interface that will never confuse you, making it a solid investing platform for any Canadian investor.
Questrade is an easy-to-use platform that offers you a slew of investment choices (from ETFs to options trading ) for extremely low commission fees. When you trade stocks, you’ll pay 1 cent per share, with a minimum fee of $4.95 and a maximum of $9.95.
It’s not commission-free, sure, but it’s pretty darn low. On top of that, you’ll pay no quarterly or annual fees on your account. And, like Qtrade, you can buy certain high-quality ETFs without paying commissions (you might have to pay commission to sell them, however).
One reason Canadians prefer Questrade to other trading platforms is the wide variety of investing options available. Like other online brokerages, you can buy stocks and ETFs. But, unlike others, you also have access to more risky investments, such as over-the-counter stocks (aka penny stocks) and options trading. Note: if you’re just starting out, you’ll probably want to avoid these higher-risk investments, as you could easily lose money in something you don’t understand.
What should you look for in an investing platform?
Lucky for you, competition among investing platforms has gotten fierce (you can thank Robinhood for that). That means you don’t have to settle with a broker who charges outrageous fees and offers low support. As you’re shopping among the best online brokerages in Canada, here are some things to look for.
1. Low fees
Many investing platforms charge commissions, account fees, foreign exchange fees, and occasionally ECN fees. Though paying fees shouldn’t stop you from using an investing platform — sometimes the features and customer support are well worth the fees — you’ll definitely want to find the one that gives you the best bang for your buck.
2. Variety of investments
Most online brokerages offer stocks and ETFs, but not all offer the same ones. Before you open an account with a brokerage, be sure there’s a variety of investment options, especially when it comes to commission-free ETFs.
3. Research and support
Some Canadians may want to stick their money in a passive ETF and call it a day. Others will want to read up on stocks and hand-pick the best one for their portfolio. If you count yourself among the latter, you’ll want an investing platform with educational materials, customer support, and in-depth research at your disposal.
4. Easy-to-use platform
This is the 21st century — you don’t want to navigate through a clunky app or website, right? Many of the best online brokerages understand that investing is already a fairly taxing venture. The last thing an investor wants is a taxing platform, too.
5. Account minimums
Some online brokerages will require an account minimum for you to open an account. If you don’t have much money to invest with, look for online brokerages with no minimum deposits.
Foolish bottom line on Robinhood alternatives
Even though Robinhood isn’t available in Canada, you still have plenty of great online brokerages to choose from. As you’re scanning the market, look for an investing platform that has great customer service, an intuitive and easy-to-use interface, and, yes, low fees.
If you’re new to investing, you may want to step back and understand the basics before you choose an online brokerage. Be sure you understand how stock investing works, what ETFs are, and even why you’re investing in the first place. By understanding investing more deeply, you’ll put yourself in a better position when it comes time to pick an online brokerage.