If you are a foreign investor outside the U.S. who wants to take advantage of Robinhood’s commission-free trading, you are out of luck because the app-based broker is currently only available to those residing in the U.S. There are, however, some alternative brokers that are growing in popularity that also offer discounted or commission-free trading and are open to most foreign investors. This article will go over two of the more popular options.
Who Qualifies for a Robinhood Account?
On their website, Robinhood indicates that you must have a valid Social Security Number (SSN) in order to open an account (Taxpayer Identification Numbers are not sufficient). This means that you must be a U.S. citizen or permanent resident with a legal address within the 50 U.S. States or Puerto Rico. The only way for a non-US citizen to get an SSN, and therefore be able to open a Robinhood account, would be if you have a valid U.S. visa.
What Are the Alternatives to Robinhood?
For non-US investors that don’t meet the above qualifications to invest with Robinhood, we would recommend you consider opening an account with either Firstrade or ZacksTrade. The rest of this article will go over both of these US brokers that are “foreigner-friendly”, starting with Firstrade.
Who Can Open a Firstrade Account?
Besides Americans, Firstrade accounts are currently available to citizens of the following countries: Australia, Belgium, China, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, South Korea, Mexico, New Zealand, Poland, Singapore, Spain, Taiwan, and the United Kingdom.
Firstrade Overview
Firstrade is one of the few American brokers that offer international accounts. And they are a solid choice, as just like Robinhood, they have $0 commissions on stock and ETF trades.
New Account Opening
Opening a Firstrade account is quick and easy, and can be done entirely from their website. As a non-US citizen, the application process requires you to also submit a copy of your valid passport, a W-8BEN Form, and sign Firstrade’s online service agreement form. From here, the rest of the account application is pretty standard, asking for your personal information and contact details. You will also be asked to choose whether you want a cash-only or margin account and whether or not you want options trading enabled. It’s okay if you’re not sure too as you can always add these features later.
Firstrade Investment Options
In terms of investment offerings, we think Firstrade is a better choice than Robinhood because they offer more options. Firstrade allows you to trade stocks, ETFs, mutual funds, options, and bonds, whereas Robinhood doesn’t yet offer mutual funds or fixed income on its platform. Firstrade offers more than 2,000 ETFs and 9,000 mutual funds, all commission-free (although some mutual funds come with a load fee).
Firstrade Commissions, Fees, and Minimum Deposit
As we just mentioned, Firstrade doesn’t charge commission for stocks, ETFs, mutual funds, or options trades. Fixed income securities are traded on a net basis meaning Firstrade includes a markup/down in their quoted bid/ask spread. Real-time data, DRIP service, and electronic statements are all free at Firstrade. There are also no minimum required balances and no account maintenance fees for low balances.
Trading Software and Tools
Firstrade’s website acts as the primary trading center as they no longer have a desktop platform. At the bottom of their website sits a trade ticket, which displays all the relevant information you’d need (last price, bid/ask, volume, etc.) to place a trade as soon as you enter a ticker. The menu at the top of the screen has plenty of options to help you research and build your portfolio, including an education center, stock, ETF, and mutual fund screeners, and a stock research tab that shows analyst ratings, valuation metrics, company headline and financials, interactive charts, and more.
Generally speaking, we found that Firstrade offers more research and tools to help build your portfolio than Robinhood. Firstrade also has a mobile app with more basic features that is good for placing trades when you’re on the go.
Customer Service
Another area where we think you’re actually better off at Firstrade than Robinhood is customer service. While Robinhood only offers an in-app messaging service for you to send questions through, Firstrade actually has a dedicated phone support team that can be reached from 8am to 6pm EST Monday through Friday. They also have some agents that speak Cantonese and Mandarin.
Firstrade Promotion
$0 commissions + up to $200 in transfer fee rebates.
Open Firstrade Account
ZacksTrade Overview
If your country isn’t included in Firstrade’s coverage area, you should check out ZacksTrade as an alternative, as they offer accounts to residents of most other countries.
ZacksTrade Investment Options
Similar to Firstrade, ZacksTrade supports trading in stocks, ETFs, mutual funds, options, and bonds.
ZacksTrade Commissions, Fees, and Minimum Deposit
Unlike Robinhood and Firstrade, ZacksTrade doesn’t have $0 commissions. Stock and ETF trades are $0.01 per share ($3 minimum per trade), and for stocks priced below $1 the commission is the greater of $3 or 1% of the trade. Mutual fund commissions are a flat $27.50. Options trades are $3 for the first contract and $0.75 for each additional contract. Bond commissions are $3 per bond ($1,000 face value) plus a percentage of the trade which varies based on the size and the type of bond (Municipal, Corporate, or Treasury). The percentage can be as low as 0.005% for trades over $1million face value or as high as 0.10% for face values under $10,000.
While ZacksTrade doesn’t have any account maintenance fees, they do require a minimum account balance of $2,500. Other fees to be aware of is they will charge you a monthly fee for real-time data unless you trade at least 20,000 shares or 55 options contracts each month. Oddly, ZacksTrade only allows one free withdrawal per month, with all additional ACH withdrawals costing $1. Higher fees apply to withdrawals via check or wire transfer.
Trading Software, Tools and Education
ZacksTrade has a website that is used for managing your account but not for trading, that happens on their web browser, desktop, and mobile platforms. The web browser and desktop platforms offer the standard features you’d expect from all brokers, but charting is superior on the desktop app.
A plus of using ZacksTrade is that your account gets you free access to lots of education and research articles offered through the broker’s various partners, including Zacks Investment Research, Morningstar, and Seeking Alpha. Many of these partners are subscription-only, so free access through your Zacks account is a great deal.
Customer Service
ZacksTrade has an online chat feature; however we haven’t always been able to immediately get in touch with someone through this channel. On the bright side, Zacks also has dedicated phone support during business hours from 9am to 6pm EST Monday through Friday.
Summary
In conclusion, if you are a non-US investor (and don’t hold a U.S. visa) you cannot currently open an account with Robinhood. Firstrade and ZacksTrade are two popular U.S. brokers with comparable offerings that support international accounts to citizens of most countries.
Promotion
Trade stocks, options & ETFs for as low as $1 for a full year.
Open ZacksTrade Account
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