Robinhood vs. E*Trade: Broker Comparison
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E*Trade is one of the largest ‘discount’ brokerages, having been in business a relatively short amount of time. The first to launch an online brokerage and offer education courses to new investors, E*Trade has gained a reputation for being the beginner investor’s bread and butter.
The brokerage continues to expand and now offers one of the best mobile apps for active and passive investors called the Power E*Trade mobile app. E*Trade also cut its commission fees along with many other brokerages in October 2019.
In comparison, Robinhood also started out as a pioneer in mobile trading. However, the limited number of investment selections and simplified orders are not always helpful to investors.
In addition, they have yet to add more research tools and intuitive streaming data to their platform, which makes it considerably weaker than most brokerages, including E*Trade.
Investor Warning: All securities trading, whether in stocks, exchange-traded funds (“ETFs”), options, or other investment vehicles, is speculative in nature and involves substantial risk of loss. Robinhood Financial encourages its Customers to invest carefully and to use the information available at the websites of the SEC at http://www.sec.gov and FINRA at http://FINRA.org.
Robinhood vs. E*Trade – Quick Comparison
While Robinhood kicked off the mobile trading game, E*Trade expanded its mobile apps to include more tools and education.
- Robinhood offers commission-free trading for stocks, ETFs, options, and cryptocurrencies
- Access to customizable alerts and watchlists, as well as basic candlestick charts
- No robo-advisors, guidance, or research tools
- No live chat or phone number, but email support is available
- Not the best app for retirement or passive investors who like mutual funds
- E*Trade offers full-service investing for a fraction of the cost
- Zero commissions on stocks, ETFs, options, and mutual funds
- Options still include a $0.65 per contract charge
- Power E*Trade mobile app includes the top tools and market order technology for iOS and Android
- Amazing education and research tools for beginner, intermediate, and advanced investors
Fees and Commissions
Robinhood was founded with the idea of commission-free trading. You pay $0 for stocks, ETFs, and options including contracts.
However, these are the only investments that you are allowed to make. This trade-off is also more apparent when you find that the app does not have any advanced research or advisory tools.
E*Trade was also a pioneer of online trading convenience before mobile apps. It’s a diversified investment broker platform with every kind of investment you can think of, including stocks, bonds, mutual funds, ETFs, futures, options, and forex.
In October 2019, E*Trade switched to a commission-free model for stocks and ETFs. However, you still pay $0.65 per contract for options, although there are volume discounts available.
There are no annual fees for both apps. They each charge $75 for account transfers.
Robinhood does charge a $5/month fee to join Robinhood Gold, which is their margin account feature. In general, Robinhood is known for its low margin rates, which are capped at 5 percent. E*Trade is considerably higher.
- Best for mobile users, individual taxable accounts, and margin accounts
- $0 commissions on stocks, ETFs, and options
- No minimum account balance or inactivity fees
- Must pay $5/month for Robinhood Gold if you want to trade on margin
- No streaming quotes or research
- Low margin rates
- Best for beginner investors who need guidance and research
- Full trading platform with access to more investments
- Retirement accounts and planning available
- $0 commissions on stocks, ETFs, options, and mutual funds
- No minimum account balance or inactivity fees
Winner: Robinhood is the best when it comes to free trading, but there are more options with E*Trade.
Robinhood was built to be simple, which is why it only offers the basics when it comes to investment selection. You can choose from stocks, ETFs, options, and cryptocurrency (in certain states). These are all free to trade, meaning you never pay any commissions.
The only time Robinhood charges anything is for Robinhood Gold, which is their margin account platform. You’ll pay $5/month to access this feature.
Margin rates are pretty low and capped at 5 percent with Robinhood. This is the lowest out of all popular brokerages currently.
E*Trade has far more investment selections. In fact, it’s well known for having the most markets to play with. You can trade in the following:
- Mutual funds
Winner: E*Trade has a wider variety when it comes to investments, but if you’re looking for cryptocurrency, Robinhood is one of the only brokerages that offers the digital currency market.
Online Advisors and Educational Offerings
There aren’t too many brokerages that can compare to E*Trade’s educational offerings. Robinhood would not be the app to pick for advisors, research tools, or education.
The basic design of Robinhood is for investors who already have a strategy and know how to conduct research on their own. Besides a few basic articles on how to use the app and questions about Robinhood’s services, the platform lacks any real tools.
However, there are some customizable alerts, watchlists, and basic candlestick charting available on Robinhood’s mobile app.
E*Trade is the king when it comes to market education, tips, news, trends, and trade methodologies. You can sign up for courses or webinars to learn more about investing, and there are a ton of research and analysis tools.
Since 1982, E*Trade has been perfecting its research tools, so the platform has a ton of pricing history on different stocks, ETFs, and mutual funds.
While Robinhood allows you to set up a customized news feed, there aren’t too many other tools or education options. Robinhood Gold does give you access to Morningstar reports and Nasdaq Level II market data for a $5/month subscription.
There are also plenty of advanced charting tools that come with E*Trade. You can look at analyst ratings, financial statements, asset screeners, and detailed trading data. There are plenty of stock recommendations, expert analysis tools, calendars, strategies, and investment ideas to dig into as well.
Power E*Trade offers a LiveAction widget that allows investors to scan for technical signals using real-time data. These tools are proprietary to E*Trade, and they are a part of the reason that so many investors have stuck with them for so many years.
- Basic app allows you create alerts, watchlists, and customized news feed
- Must pay $5/month for Robinhood Gold to access Morningstar reports and level II market data
- No research or screener tools available, and only basic candlestick charting is included
- Sign up and gain access to almost all the education courses and research tools you could want
- All kinds of analysis tools for fundamental and technical investors
- Customizable charts, news feeds, recommendations, and more
- Use the LiveAction widget to look for technical signals with real-time data
- Set up automatic alerts and bids right from streaming quotes and charts
Winner: E*Trade wins by far in this category.
Trade Experience and Security
Robinhood was designed for the mobile user. Everything should be accessible on the mobile app, which is available for iOS and Android users.
You can only trade in stocks, ETFs, options, and cryptocurrency. Robinhood offers basic tools to put in market orders, and it does not offer short selling. However, investors can order puts.
E*Trade has basic order routing, but it makes up for this with a wide variety of investment selections. Robinhood has pretty poor execution based on per dollar trades, whereas the industry standard is to use per share.
Even though active, DIY traders may like Robinhood’s commission-free trading, E*Trade offers better trade execution for price improvement.
If you like dollar-cost averaging, asset allocation, and passive strategies, Robinhood may offer some advantages, but E*Trade still wins based on the variety of trade technologies and accurate trade execution.
E*Trade offers desktop, web, and mobile stock trading apps to satisfy every type of investor. They are fast, easy-to-use, and cost nothing. They also provide better portfolio management and more options for retirement than Robinhood.
- $0 commissions on a limited number of investment selections
- Poor trade execution quality for really active traders
- Order-routing is based on per-dollar not per-share
- Streamlined app that makes it easy for DIY passive investors
- Multiple apps for desktop, web, and mobile users
- Better trade execution for price improvement
- Multiple ways to place market orders, including complex options
- Advanced portfolio management
- More options for retirement accounts
- Easy navigation and helper tools to guide investors through trades
Winner: E*Trade offers a better trading experience due to its wide selection and more accurate order-routing.
Mobile and New Trade Tech
Robinhood started as a mobile trader in 2017. It was well known for its streamlined app with mobile ordering for stocks, ETFs, and options. However, the brokerage offered web-based trading later.
It’s no surprise that the app is still well-maintained and easy-to-use. You can customize watchlists and add alerts, as well as view candlestick charts. However, it’s rather simple and does not allow you to place very complex orders.
E*Trade has a few mobile apps depending on the type of investor you want to be. The basic mobile app from E*Trade is just like Robinhood’s simplified app.
However, you have access to more investment selections. You can also use the Power E*Trade app, which has more advanced trading and ordering features that are not available on Robinhood at all.
In addition, there are a few more research tools available on E*Trade’s mobile app, including a robo-advisory service.
- Simplified mobile app designed for quick orders on-the-go
- Basic tools available such as synced watchlists and alerts
- No robo-advisory or advanced research tools available
- Innovative suite of mobile apps designed to help investors
- Advanced ordering available on Power E*Trade
- Streaming quotes and real-time data available
- Robo-advisory service available on Power E*Trade
Winner: E*Trade also wins for mobile app trading and research. The robo-advisory service on Power E*Trade is a slick and easy way to improve your investments.
Frequently Asked Questions: Robinhood and E*Trade
Which is Better for Retirement: Robinhood or E*Trade?
E*Trade is the better option for IRA / retirement accounts because they offer more account selections than Robinhood. You can set up traditional and Roth IRAs with E*Trade, as well as a variety of other tax advantage accounts. Long-term investors will love E*Trade’s access to more ETFs, mutual funds, and futures.
There are also a ton of retirement planning and portfolio analysis tools available with E*Trade. You can use retirement calculators and forecasting tools to see where you need to improve, and there are advisory services available too.
Does E*Trade Offer 24/7 Customer Support?
Yes, customers can contact E*Trade 24/7 with questions, issues, advice needs, and more through live chat. Phone support is available Monday through Friday, from 8:30 AM to 8:30 PM, ET.
Does E*Trade Offer Cryptocurrency Trading?
As of January 2020, the platform does not support cryptocurrency, but E*Trade announced in 2019, that it would support some cryptocurrency trading in the future. Here is the story on E*Trade’s launch of Bitcoin and Ether trading.
Which One is Right for You?
E*Trade is probably a better platform for investors who want the best tools, order-routing, and investment selections. Since E*Trade dropped its commissions to $0, much of Robinhood’s competitive advantage has gone out the window.
It’s now a stripped-down app that is made for investors to use on the go, but they can do the same actions and even more with E*Trade’s mobile apps.
Basically, if you want to trade in more markets and pay zero commissions, you can simply use E*Trade and gain access to a wide variety of free tools and education that you won’t get with Robinhood.
Overall, E*Trade continues to improve on their offerings, while Robinhood may have become stale in the new age of commission-free trading.