Robinhood Canada: Best Canadian Alternatives To The No-Fee Investing Apps (DIY)

Do-it-yourself (DIY) Investment has gained popularity over the past few years.

People are now interested in investing themselves through platforms that offer commission-free trading – Robinhood investment trading offers this!

What Is Do-It-Yourself (DIY) Investing?

Do-it-yourself (DIY) investing, self-directed investing, or self-managed investing, is an investment approach where the investor directly chooses to build and manage their investment portfolio rather than hiring an agent.

Examples of agents include stockbrokers, investment advisers, private bankers, or financial planners.

DIY investment has the advantage of offering individuals more power over their investment by constant monitoring of its flow directly and waive commission fee cost while trading Robinhood investment trading offers this!

Robinhood investing trading offers commission-free trading on its app, but there is a question with its availability- Is it available in Canada?

And otherwise, what other DIY options can Canadian residents interested in investing with commission-free trading explore?

Robinhood Canada

What Is The Robinhood Investment Trading?

Robinhood investment trade is a type of DIY that allows investors to trade stocks, options, exchange-traded funds, and cryptocurrency without paying commission fee costs.

It is an app with no commission while trading founded by Vladimir Tenev and Baiju Bhatt in 2015 for stocks and investment trading. But you cannot trade bonds, special metals, or mutual funds on its app.

It is a fast-growing trading company with several subsidiaries like Market Snacks, Robinhood Securities, Robinhood Financials, and lots more. It has had over a thousand employees since its foundation.

At Robinhood, you can start investing for as low as $1 then begin to receive Robinhood primaries packages.

Moreover, if you want more than its primaries package, starting investment at just $5 can merit you to Robinhood Gold package in just a month. Robinhood Gold offers the benefits of research reports, analysis, and margin trading as you trade on its app.

You should note that Robinhood only applies to taxable or current accounts. This means you cannot invest in your casual savings account or registered accounts such as your 401 (k) or IRA.

You must have a taxable account before investing with Robinhood.

The impact Robinhood has on the investment industry has not been small. Robinhood revolutionized the brokerage industry by offering commission-free trading. They have a term for it called the “Robinhood Effect.”

It is very rampant in today’s market world; no wonder it is gaining interest in Canada.

Here are some of the benefits it offers;

Pros of Robinhood

  • The app structure has a user-friendly interface. It is web-based and very easy to navigate.

  • It offers the ability to offer fractional shares. You can buy or sell shares in fractional multiples on the app.

  • It allows the trade of Cryptocurrencies like Bitcoin and Ethereum.

  • There is no cap on the balance left before you trade. No minimum balance is required before you can buy or sell shares.

  • It also offers a savings option for your uninvested funds.

This also comes with a debit card to make transactions with a Federal Deposit Insurance Corporation (FDIC) policy.

  • It is a fast way to trade stocks with no commission cost.

Although its benefits are numerous, however, it still has its setbacks.

 Cons of Robinhood

  • It is used for only taxable accounts. Your account must be tax-permitted before you can make use of the Robinhood app.

  • Its app does not permit the trade of bonds, precious metals, or mutual funds.

  • It has limited availability, as it is not yet open for Canadian residents.

Robinhood In Canada?

It is no doubt that Robinhood has limited access to part of the world. Unfortunately, Canada is one of the countries that lack its access.

They have attempted to expand its access to Canada via a Twitter post, but nothing has been done yet.

For now, only US citizens and residents enjoy its offer. Robinhood is licensed to sell securities in the USA only, permittable to only US citizens and residents.

However, US citizens and residents can trade in other countries that allow its service through the Robinhood app.

This is not the only hope of Canadian residents. There are still other trading platforms they can explore.

Trading Apps Accessible to Canadian Residents

Though Robinhood trading app would have been a good trading platform for Canadians, there are other options accessible to them- Wealthsimple trade and Questrade are good Canadian alternatives!

These two trading platforms both offer investment opportunities with special packages. 

Let’s have a go into them to make potential investors choose wisely.

Wealthsimple Trade

Wealthsimple trade is one of the earliest trading platforms available in Canada, but little do people know of its benefits.

As of 2019, the Wealthsimple Trade launched a stock trading app (available on iOS and Android) that offers commission-free trading for stocks and EFTs with no capital required, similar to that offered by the Robinhood trade.

Further, in 2020, they shifted their spaces into desktops and laptops so all of their customers could trade conveniently.

Note that there are no monthly or inactivity fees with the Wealthsimple Trade, and it offers a 3 to 200 (1.5%) conversion rate free for US-based trades. 

The Wealthsimple trade offers similar restrictions of taxable accounts only in their trade and TFSA and RRSP accounts.

They offer high bank-level encryption and the Canadian Investor Protection Fund (CIPF) for money up or more than $1 million.

Pros of Wealthsimple Trade

  • It requires no pre-capital or minimum balance. You can trade at your convenient cost.

  • It offers no commission costs on stocks and EFTs.

  • Its app does not charge a commission fee or an inactive fee.

  • It has a cryptocurrency trading option that allows the trade of Bitcoin and Ethereum.

  • Its bank-level encryption is top-notch

  • Your money is secured with CIPF

  • It has a wider reach of coverage (i.e., iOS, Android, PCs, and desktop)

  • It is accessible in Canada.

Cons of Wealthsimple Trade

  • It has a specific offer to only registered accounts.

  • It is currently only app-based and does not have any real-time trading option.

  • The app does not permit the trade of bonds, mutual funds, or margin accounts.

  • Last but not the least, the app does not offer fractional shares.

Questrade

This is another alternative to the Robinhood trading platform accessible to Canadian residents and citizens.

The Questrade is a trading platform that offers commission-free purchases of EFTs with a commodity fee when buying and selling.

They have the same advantage as the Wealthsimple Trade of no monthly fee but differ on inactive fees.

They would charge an inactive $24.95 per quarter if you did not make any trades that quarter and your account balance are less than $1000.

Investments with Questrade are also protected by the CIPF and Investment Industry Regulatory Organization of Canada (IIROC) for trades up to $10 million.

It has an advantage that allows investing opportunities for both registered and unregistered accounts.

Unlike Wealthsimple Trade, Questrade offers RESP, LIRA, RRIF, TFSA, and RRSP registered accounts. They also provide margin, and corporate accounts counter to that of the Robinhood trade.

Notwithstanding, you will need a minimum capital cost of $1000 before commencing investments with Questrade.

But they have wide, user-friendly app access with a web platform that offers explicit information to make your trade easy and convenient.

Pros of Questrade

  • It offers a commission-free purchase of EFTs with no charging cost.

  • It does not incur monthly fees like the Wealthsimple trade

  • You’ll get coverage to both taxable registered and non-registered accounts

  • CIPF protects your money and additional IIROC protection for up to $10 million accounts.

  • It has good bank-level encryption.

  • It allows access to margin and cooperates accounts

  • Its app is desktop supported

  • It offers the ability to buy and sell EFTs, stocks, bonds, options, and mutual funds.

  • It is a standard trading platform that big corporations and firms use.

Cons of Questrade

  • It charges an inactive fee of $24.95 per quarter.

  • It requires a minimum capital of $1000 to commence trade

  • There is a trading fee cost when selling EFTs or making any other purchase

  • It is not crypto-supported. It does not permit the trade of Bitcoin or Ethereum on its app.

Now that we have explored alternative trading platforms that Canadian residents could consider let’s compare these three trading platforms in depth.

Comparisons of Wealthsimple Trade, Questrade, and Robinhood Trade

Property

Wealthsimple Trade

 Questrade

 

Robinhood

Trade

 

 

Minimum Balance

 

$1

$1000

 

$1

 

Commission on Trade

Free commission trade on stocks and EFTs

Commission-free ETF purchases; $9.95 fee on every EFT sale; Trading fees between $4.95-$9.95 for selling other commodities

 

Free commission trade on EFTs, stocks, options, and cryptocurrencies (there may be little costs when selling)

Medium of Access

App available on iOS and Android; Desktop beta version for PCs users

 

User-friendly app and web access

App and web-based

Trade Options

Trades stocks and EFTs

Trade stocks, EFTs, options, FX, IPOs, CFDs, mutual funds, bonds, international equities, precious metals, and more

 

Trade options, stocks, EFTs

Cryptocurrency

Can trade cryptocurrencies (i.e., Bitcoin and Ethereum) via Wealthsimple Crypto on the app

 

Does not trade cryptocurrency

Trade cryptocurrencies on its app and web platform

Account Options

Taxable, RRSP, TFSA

RRSP, Taxable, TFSA, RESP, RRIF, LIRA, Margin, and Corporate

 

Taxable, Margin

Fractional Shares

Does not offer fractional shares

 

Offers fractional shares

Offers fractional shares

Availability

Available to Canadian residents and citizens

Available to Canadian residents and citizens

 

Not available to Canadians. Only available to US residents and citizens

 

Now that we know all the comparisons and similarities of Robinhood trade to Wealthsimple trade and Questrade, let’s analyze their preference to render Canadian inventors choose a good alternative.

Robinhood Canada

Is There a Better Alternative to Robinhood Trade for Canadians?

Well, the question remains if Canadians now have a better alternative to the Robinhood trading platform?

I will say it’s not about the trading platform but the interest of the potential investor.

Depending on whether it’s Wealthsimple trade or Questrade, it is the investor’s sole decision and what they are after.

Now that we know the benefits and shortcomings of the Questrade and Wealthsimple trade to that of the Robinhood trade, we can decide what is favorable to us and what to embark on.

So, it is not a question of “which is better?” but a question of “what we are after?”

The different trading platforms offer different packages, so it is now left for the investors to understand what they want and determine what would benefit them in the long run.

Now, let’s examine the competition between investing platforms.

Competition Benefits Investors

While there is a growing interest in trading apps for do-it-yourself (DIY) investors, there is a growing wave of competition among different trading platforms.

This ultimately, in return, would benefit the investor!

There is no exact trading alternative for the Robinhood trading platform. Still, the different trading mediums we have here in Canada (Wealthsimple trade and Questrade) are constantly trying to outlast the other.

There is a growing competition between the investing platforms that have become interesting when investors decide what to embark on.

We are already seeing the benefits with the launch of Wealthsimple Trade and now its beta desktop version for PCs users, and other interesting developments that have come up.

There is indeed a competitive field on who will satisfy the ultimate needs of potential investors.

We may equally see new companies bring something unique to steer the market, like increasing profits and reducing costs to win the masses.

So, be on the watch out!

When Will, the Robinhood Trade, Expand its Access to Canada?

No announcement has been made concerning the Robinhood trading platform extending its access to Canadian residents.

In the meantime, trading platforms available to Canadians can be utilized; based on the services we demand, we can choose a clever alternative.

Therefore, it cannot be outrightly stated when the Robinhood trade will be available in Canada.

And maybe one day, it will eventually happen.

Please let me know your thoughts and comments below. Thanks for reading!

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