Robinhood Canada: Not available so here’s the next best thing (2021)

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With the stock market pushing all time highs, it’s no coincidence that more and more people are interested in learning how they can start investing and take advantage of easy to use platforms like Robinhood Canada.

Unfortunately, Robinhood is not available in Canada, however if you are looking for a similar platform that’s easy to use and offers zero commission trading, you should definitely check out the Canadian equivalent: Wealthsimple Trade and get a $10 bonus when you fund your account.
 
Quick Links

 

Can I use Robinhood in Canada

Currently, you cannot trade securities or cryptocurrencies through the Robinhood platform in Canada.

 

Is Robinhood coming to Canada?

There hasn’t been any official announcement from Robinhood that they’ll be coming to Canada.

While recently, brokers in the US such as Charles Schwab and TD Ameritrade have moved to $0 trades, there hasn’t been any similar movement in Canada.

Robinhood did announce plans to enter the UK market in 2020, however global expansion plans have since been put on hold.
 

Alternatives To Robinhood In Canada

The best alternative for Canadians is Wealthsimple Trade, followed by Questrade with each being on different ends of the spectrum.

Interactive Brokers is also an option, which is closer to Questrade than Wealthsimple Trade, and has a strong offering for Canadians.

Further details on IB below.

(For US residents, Interactive Brokers offers a commission free platform, IBKR Lite, however this is NOT available to Canadians. IBKR Lite would be similar to Wealthsimple Trade.)

 

Quick Comparison: Wealthsimple Trade vs Questrade

 

Wealthsimple Trade

Questrade

Commissions: Stocks$01 cent per share
Min $4.95 to Max $9.95
Commissions: OptionsN/A$9.95 per trade + $1 per contract
Commissions: ETFs$0Buying is free
Selling is the same price as stocks
Account Minimum$0$1,000
USD & CAD AccountsNoYes
Mobile AppYesYes
Desktop AppYesYes
Advanced Data Streams AvailableNoYes
Promotion$10 cash bonus$50 in free trades
Learn More at Wealthsimple.comLearn More at Questrade.com

 

1. Wealthsimple Trade

By now the majority of us have heard of Wealthsimple. Their new offering, Wealthsimple Trade, is a no fee brokerage app that’s the most similar thing to Robinhood that’s available to Canadians, which allows you to buy and sell thousands of stocks and ETFs on major Canadian and US exchanges. Wealthsimple has been around since 2014 and boasts 175,000 customers who’ve invested $5 billion.

 
Commissions

  • Stocks: $0
  • ETFs: $0

 
What’s Good

  • Zero commissions, zero nonsense approach
  • No minimum is required, open an account with as little as you want and get started
  • Intuitive app, very easy to get started online

 
What’s Not

  • Only Canadian dollar accounts are available so if you are looking to trade stocks or ETFs in USD you will be charged 1.5% on the conversion each time you buy and sell – while other brokerages charge a conversion fee as well, the difference is that Wealthsimple does not allow you to hold, deposit or withdraw funds in USD, so you’ll be paying that conversion fee on every USD denominated trade – again, this isn’t a deal breaker, it just depends on how you will be using the platform
  • Only available through the mobile app at the moment, no desktop application
    (A desktop platform was recently launched in December 2020)
  • No ability to trade Options
  • No advanced features or data streams, however this aligns with their target market for this product

 


 

2. Questrade

Questrade has become a strong player in the Canadian brokerage space over the last decade. Offering both self-directed investing and their Questwealth Portfolios, Questrade strives to offer lower fees than its competitors. Boasting 50,000 accounts opened every year and 21 years in the Canadian market, Questrade has $9 billion in assets under administration. (Stats as per the Questrade website)

 
Commissions

  • Stocks: 1 cent per share with a minimum of $4.95 and maximum of $9.95 (+ exchange and ECN fees if applicable)
  • Options: $9.95 per trade + $1 per contract (+ exchange and ECN fees if applicable)
  • ETFs: Buying is free, selling is the same price as stocks but can be lower if you have an advanced market data package

 
What’s Good

  • Low fees vs the bank brokerages
  • Desktop app, mobile app and advanced trading app
  • Availability of advanced data streams

 
What’s Not

  • October 1: There is no longer an inactivity fee on any accounts Inactivity fee of $24.95 quarterly if you did not have any trades in the previous quarter and have an investment/cash balance less than $1,000 CAD

Learn more about Questrade

 


 

3. Interactive Brokers

Interactive Brokers was ranked #1 this year by Barron’s in their evaluation of the best online brokers for , tying with Fidelity for the top spot. Interactive Brokers has been around for decades and has been available to Canadians for many years. While they don’t have an office in Toronto, their Canadian headquarters are based out of Montreal.

 
Commissions

  • Stocks:
    Under their fixed commissions structure:$0.005 USD per share for US stocks
    $0.01 CAD per share for CAD stocks
    Minimum commission of $1For higher volume traders, Interactive Brokers offers a tiered commissions structure.
  • Options:
    US: Depends on the premium and ranges between $0.25 – $0.65 USD per contract with a minimum per order of $1 USD, price goes down if your monthly volume is higher
    Canadian: Starts at $1.25 CAD per contract, minimum per order of $1.50 CAD, price goes down if your monthly volume is higher
  • ETFs: Some US ETFs are available commission free however transaction fees may be passed on to you

 
What’s Good

  • Low commissions, will probably work out positive for most folks vs other brokerages however they’re volume based so they can actually become more expensive if you trade high volumes
  • Interest rate to borrow on margin accounts is one of the lowest in the industry
  • Interest paid to you on uninvested cash balances is one of the highest in the industry
  • IB SmartRouting technology aims to get you the best possible price at the time of execution – Learn more here

 
What’s Not

  • For those looking for a Canadian based brokerage, Interactive Brokers is an American company, however they are members of the Investment Industry Regulatory Organization of Canada (IIROC) and the Canadian Investor Protection Fund (CIPF) – they are a large organization that’s been around for decades
  • RSP accounts are $12.50 CAD quarterly and will also be charged $50 CAD fee for withdrawal/deregisration
  • $10 USD activity fee per each account – Calculated as $10 USD subtract any commissions from trades you made or completely waived if you have a balance of $100,000 USD. If your balance is less than $2,000 USD, the fee is $20 USD subtract any commissions

 


 

Frequently Asked Questions

 

What is Robinhood?

Robinhood is a zero-commission trading platform that launched in 2013 and boasts over 13 million users to date. The company allows users to trade stocks, ETFs, options, and cryptocurrencies such as bitcoin without any fees on their laptop or mobile device through a very easy to use app.
 

How does Robinhood make money?

Wait a minute, if Robinhood doesn’t charge any trading fees, how do they make money? According to their website, their revenue sources include:
 

1. Fees collected from Robinhood Gold

(premium version that provides research reports, margin trading and more)
 

2. Lending on margin

(if you use more than $1,000 of margin you will be charged interest)
 

3. Interest income generated from un-invested cash

 

4. Rebates from Market Makers

When you invest through Robinhood Securities or Robinhood Crypto, your order is sent to a “market maker” such as Citdael rather than an exchange such as the NYSE.

A market maker is a financial institution that buys and sells securities in large volumes everyday and helps match buyers and sellers, thereby creating liquidity in the market.

In order to remain competitive, market makers will often offer rebates to brokers such as Robinhood (payment for order flow) which is one way the company makes money. This is a controversial but 100% legitimate practice in the world of finance and transparency is essential.

The importance of transparency became clear on December 17th, 2020 when Robinhood was fined $65 million by the SEC for “misleading customers about revenue sources and failing to satisfy duty of execution.”

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Shawn Gant

My 2 passions in life: snowboarding and all things digital! Always interested in exploring new tech developments.

2 thoughts on “Robinhood Canada: Not available so here’s the next best thing (2021)”

  1. Which low fee or no fee commission brokerage is coming to open it’s business in Canada in 2020? I heard tastworks might be the first ?

    1. Hi Joe,

      As of now I have not heard of any other brokers besides Tastyworks with plans to come to Canada in 2020. I did reach out to Tastyworks last week and they noted they’re still aiming to launch in Canada in the coming months. I think that’s our best hope for now!

      Thanks,
      Shawn

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