Overview
Robinhood is the ultimate low-cost brokerage firm. But Charles Schwab lowered its equity commission, which makes it very
competitive with ultra-low-cost brokers. This survey will compare and contrast the two brokerage houses and see if one is the
better value - Charles Schwab or Robinhood.
Robinhood vs Charles Schwab Comparisom Chart
| Broker Fees |
Stock/ETF
Commission |
Mutual Fund
Commission |
Options
Commission |
Maintenance
Fee |
Annual IRA
Fee |
|
Charles Schwab
|
$4.95
|
$76 ($0 to sell)
|
$4.95 + $0.65 per contract
|
$0
|
$0
|
|
Robinhood
|
$0
|
na
|
na
|
$0
|
$0
|
| Broker Review |
Cost |
Investment Products |
Trading Tools |
Customer Service |
Research |
Overall Rating |
|
Charles Schwab
|
|
|
|
|
|
|
|
Robinhood
|
|
|
|
|
|
|
Fees, Commissions, and Account Requirements
Neither broker-dealer charges account fees, such as annual, low-balance, or inactivity charges. A Robinhood account can be opened with zero deposit of funds. Schwab customers, on the other hand, must put down $1,000 to open a trading account unless they also open a Schwab bank account along with the investment account.
Schwab charges $4.95 for stock and non-commission-free ETF trades. Robinhood (and M1 Finance)
has made itself the ultimate low-cost firm by charging nothing for stock and ETF trades. That’s right, equity trades are free at Robinhood if they are placed on its mobile app. Live representatives can help customers place trades over the phone, and this service is just $10. Schwab charges an extra $25.
Robinhood is victorious here.
Customer Service
Charles Schwab offers customer service around the clock, including on the weekend. There are agents some hours who are bilingual or even multilingual. Available languages include Spanish, Vietnamese, Cantonese, and Mandarin.
In addition to its phone support, an on-line chat function is also available, and representatives do a good job of answering questions and providing service here. The broker also has an international phone number for clients who are temporarily traveling globally. Finally, Schwab operates a nationwide network of brick-and-mortar offices, and there are a few branches outside the United States.
Going from excellent to appalling, we now look at Robinhood’s customer service options. The broker has no branch locations anywhere. Phone service is only available during market hours, and strangely, it’s not a toll-free number. There is no on-line chat function on the Robinhood website, although the site does have some FAQ’s that may answer some customers’ questions. English is the only available language.
Schwab wins by a large margin here.
Trading Tools
An easy-to-use website will be found at Schwab.com with tons of helpful information. For trading, there is a trade bar that sits within the browser. Important data is provided here. Unfortunately, trades cannot be placed directly from the tool. On the website, orders are placed on basic web pages instead. A small chart can be shown using the trade bar.
Besides the website, there is a desktop platform named StreetSmart Edge.
Surprisingly, Schwab does not require any account minimum or trading requirement to use it. The platform is easy to use and would be good for beginners. Despite its simplicity, it has many advanced features, such as market depth, which is essentially Level II quotes. Excellent charting with a high degree of customization is available as well. A chart can be shown full screen, a useful feature for technical analysis.
Going from Schwab to Robinhood once again is like the difference between night and day. Robinhood’s website has zero trading capability. There is no market or security research, and there is not even a log in. The website is used mostly for marketing purposes and signing up new accounts. The broker does not have a desktop platform.
Robinhood traders do have a mobile app where they can submit orders. However, it has a very basic interface, and very limited functions. Charting is extremely rudimentary. There are no drawing tools or technical studies. Stock research is almost nonexistent, and there is limited market news. Robinhood does have a platform for Apple Watch, one of its few highlights.
Schwab also has a mobile app, and it offers much more than Robinhood’s. The Schwab platform has mobile check deposit and live streaming of financial news, neither of which Robinhood offers. Bill pay is available on the Schwab app, and so is market news.
Robinhood loses this category.
Exchange-traded and Mutual Funds
Schwab’s mutual fund screener returns 5,684 products that are available for purchase by new investors. On this list, there are 3,472 securities that carry no transaction fee and no load. The broker’s clients must pay $76 to buy a fund that’s not on this short list. There is no charge to sell a non-NTF fund. If a fund does have NTF status, there is a $49.95 short-term trade fee if it is sold in less than 3 months after purchase. Schwab also has a list of more than 200 ETF’s that can be traded commission-free.
As we have already seen, Robinhood offers all exchange-traded funds in the U.S. commission-free, and there are about 2,000 of them. However, the broker offers zero mutual funds at any price, which is a real disappointment.
This category is awarded to Schwab.
Learning Resources
There is a great deal of educational resources on the Schwab site. Equity reports can be downloaded at no cost. They are courtesy of many third parties. These groups include Thomson Reuters, Ned Davis, CFRA, Credit Suisse, and others. Schwab also authors its own security recommendations.
There are videos and articles on a wide range of financial and investment topics. Issues such as estate planning, taxation, and how to trade bonds are just a few of the subjects that are discussed.
Compared to Schwab, Robinhood has virtually nothing. There is limited stock research on its mobile app, but this information is very brief. The company’s website only has information about managing a Robinhood account.
Robinhood fails once again.
Charles Schwab: Make $100,000 deposit and get 500 commission-free online equity and options trades.
Robinhood: Open account and get FREE stock.
Other Investment Services
Besides stocks, ETF’s, and mutual funds, Schwab customers can also buy and sell option contracts and bonds. Robinhood unfortunately doesn’t offer these securities at any price. Investment advice and managed accounts, including a robo-advisory package, are available at Schwab, too. Robinhood doesn’t provide these, either.
Schwab triumphs once again.
Charles Schwab vs Robinhood: Which is Better?
Robinhood (account review) was successful once, and Schwab
(account review) won all other categories. Schwab wins by a mile.
While Robinhood offers free trades, it doesn’t bring much else to the table.
Neither of these brokerage firms offers access to an online investor community, where users can ask questions, follow
more experienced members, and get trading and investment tips. They also don't have practice accounts (trading simulation with virtual money), that allows
users to try trading strategies without risking real money. Anyone new to investing should take a look at our
Top Brokers for Beginners article.
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