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Robinhood and E*TRADE are two popular online brokerages offering low-cost investment options. If you’re an active trader who prefers the self-directed route, you can avoid account minimum requirements and commissions with both investment apps.
While the two both offer commission-free trades on stocks, ETFs, and options, E*TRADE presents a more extensive selection of account types and investment choices. Robinhood and E*TRADE also receive payment for order flow (PFOF is the compensation brokerages receive in return for directing customer orders to third parties for execution), but their fee structures aren’t exactly identical.
Robinhood and E*TRADE’s account features and fees also vary. Keep reading to see which brokerage is best for you.
Robinhood is an online investment app offering individual brokerage accounts and commission-free stocks, ETFs, and options. The app has no fees or minimum account size requirements (with the exception of its Robinhood Gold margin account), and it also allows active traders to exchange cryptocurrencies, fractional shares, and American depositary receipts (foreign currency investments).
Compared to E*TRADE, Robinhood is the best choice for options trading since it charges a $0 options contract fee. E*TRADE, on the other hand, charges $0.65 if you place less than 30 options trades per quarter. If you place more than that, you’ll only have to pay $0.50 per contract.
The brokerage’s Robinhood Gold account offering is best for active traders interested in trading on margin (margin trading is a process whereby traders borrow money to invest in securities). For $5 per month, Robinhood Gold members get access to Morningstar-sponsored professional investment research and advanced market data. Gold also lets you trade on margin at a 2.5% annual rate (meaning you’ll have to pay back what you borrowed at a 2.5% rate), and it allows for larger instant deposits ($5,000 to $50,000).
For those into cryptocurrency trading, Robinhood offers 24/7 access to Bitcoin, Ethereum, Dogecoin, and others. Robinhood also offers multiple cash management options, but you’ll need to have a Robinhood brokerage account to utilize them.
Robinhood says its cash management add-on includes a customizable debit card, ACH account number and routing number, replacement of lost or stolen cards, and Apple Pay, Google Pay, and Samsung Pay access.
Remember that you’ll only have access to advanced market analysis and research if you’re a Robinhood Gold member. Robinhood offers a digital library with educational articles on investing and daily newsletters, but you’ll need to pay a $5 monthly fee for additional research.
Founded in 1982, E*TRADE provides , automated investing, retirement investing, market insights, and other wealth-building services. The company is also another strong competitor in the discount brokerage world since it offers commission-free trading on stocks, ETFs, options, and other investments.
Specifically, E*TRADE lets you trade stocks, ETFs, and options without charging commissions (though options contracts cost $0.65 each if you make under 30 traders per quarter or $0.50 each if you exceed 30 trades). Its self-directed brokerage accounts also have no minimum account size requirements, and the brokerage gives you access to more than 4,400 no-transaction-fee mutual funds.
If you’re more of a hands-off investor, you may prefer E*TRADE’s automated and managed portfolios. Its Core Portfolios accounts automatically manage your investments for you. You’ll just need a minimum of $500 to get started, and you’ll have to pay a 0.30% advisory fee.
E*TRADE’s managed portfolios allow you to work with a financial consultant to build a personalized portfolio suitable to your risk tolerance and investment goals. The three accounts — Blended Portfolios, Dedicated Portfolios, and Fixed Income Portfolios — have $25,000, $150,000, and $250,000 minimums, respectively.
If you’re interested in retirement accounts, E*TRADE offers multiple options. These include rollover IRAs, traditional IRAs, Roth IRAs, beneficiary IRAs, E*TRADE Complete IRAs, and IRA for Minors accounts. Most of these accounts are only for DIY traders, but E*TRADE allows you to automate the rollover, traditional, Roth, and SEP IRAs with Core Portfolios.
On the small business side, E*TRADE provides the following retirement options: Individual and Roth individual 401(k), SIMPLE IRA, SEP IRA, profit-sharing plans, and investment-only accounts.
E*TRADE is also the better choice if you’re looking for a greater variety of trading platforms. It currently offers four: Power E*TRADE web interface, E*TRADE web interface, Power E*TRADE mobile app, and E*TRADE mobile app. The Power E*TRADE platforms offer more advanced trading features like risk analysis tools and charting tools.
Finally, E*TRADE’s suite of banking products could be perfect for investors looking for checking and savings options. The investment app offers a premium savings account, Max-Rate Checking account, E*TRADE checking account, and E*TRADE line of credit.
Robinhood and E*TRADE are strong options for active traders interested in placing commission-free trades on stocks, ETFs, and options. Both also have cash management options and $0 minimum requirements for self-directed brokerage accounts, but Robinhood is the better choice for options and cryptocurrency trading.
However, if you’re looking for a wider range of account options and investment choices, E*TRADE may be best option. Unlike Robinhood, E*TRADE offers automated investing accounts and advisor-assisted accounts. The brokerage also provides joint accounts, IRAs, and custodial accounts.
And if you’re more long-term oriented, E*TRADE’s abundant supply of no-transaction-fee mutual funds will be hard to turn down. While Robinhood’s investment research is primarily reserved for Gold members, E*TRADE’s market insights are available despite account type.
Rickie Houston is a wealth-building reporter at Personal Finance Insider who covers investing, brokerage, and wealth-building products.