Overview of Schwab and Robinhood
With a $0 commission schedule, Schwab is now stiff competition for Robinhood. Can the newer
brokerage firm compete with the old stalwart? Let’s find out.
Commissions
| Broker Fees |
Stock/ETF
Commission |
Mutual Fund
Commission |
Options
Commission |
Maintenance
Fee |
Annual IRA
Fee |
|
Charles Schwab
|
$0
|
$49.95
|
$0.65 per contract
|
$0
|
$0
|
|
Robinhood
|
$0
|
na
|
$0 per contract
|
$0
|
na
|
|
WeBull
|
$0
|
na
|
$0 per contract
|
$0
|
$0
|
Services
Charles Schwab: Get commission-free online stock trades.
Robinhood: Up to $200 in FREE stock + transfer fee reimbursement.
Webull:
12 FREE stocks valued $34-$30,600 give-away at Webull.
Assets Available for Trading
If you open a brokerage account with Schwab, you’ll be able to trade five asset classes:
- Equities
- Fixed income
- Options
- Funds (mutual, closed-end, and exchange-traded)
- Futures
A really great service Schwab offers in the equity category is access to foreign stocks via the Schwab Global Account™. Because trading takes place in a stock market’s local currency, some forex exchanges do take place in the Global Account, which adds a forex trading dimension to the mix.
Robinhood doesn’t provide access to foreign investments, nor does it offer trading in futures, bonds, or mutual funds. But it does have something that Schwab customers don’t get: cryptocurrencies.
Winner: Schwab
Investment Education
If you’re new to the world of investing, or simply need to brush up on an asset class before making a decision, both broker-dealers in this feud have educational resources.
On Schwab’s website we found a Guidance tab in the top menu. Hovering over it produces a pop-up window with a cornucopia of resources, including market commentary, tax information, details on estate planning, and much more.
Schwab also publishes On Investing, a quarterly newsletter that is free for both guests and customers. It is available in both pdf and hard-copy formats.
While Robinhood does offer many articles on its site devoted to personal finance and investing, its materials simply don’t measure up to Schwab’s. For example, Schwab offers daily live webcasts and workshops at branch locations (when there’s not a virus outbreak). Schwab also has many more videos than Robinhood.
Winner: Schwab
Security Analysis
To really drill down on a specific asset, you need tools that can deliver vital data. Schwab has multiple screeners (for options, stocks, and funds) that can look at thousands of securities and return a handful based on specified criteria. These include:
- Dividend frequency
- Ned Davis ranking
- Estimated EPS growth
- And many others
Stock profiles at Schwab have free equity reports posted on them from multiple analysts. For Uber, we found 7 reports, one of which was from Schwab.
Robinhood provides stock reports from Morningstar only. Moreover, these reports aren’t free. A subscription to Robinhood Gold is required. The cost is $5 per month.
Perhaps the worst part of Robinhood’s security analysis is the lack of a screener of any kind. The firm does offer groups of stocks (and funds) in categories of investments. These collections have icons for easier browsing. But the lists themselves don’t have many columns (just price and market cap). Profiles have earnings histories and trade recommendations (but not reports) from multiple analysts.
Winner: Schwab
Margin Borrowing
Don’t have enough cash to trade the securities you want? No problem. Both firms have margin accounts that will enable you to trade with borrowed money. Borrowed money always comes with fees, of course.
Schwab charges anywhere from 12.075% to
10.375%, depending on how much you borrow.
Robinhood likes to be unorthodox, and as such, it charges a flat $5 every month for the ability to
borrow. Above a thousand dollars, the margin rate is a flat 6.5%.
Winner: Robinhood
Website Trading
Schwab customers get to use a very well-designed website that by itself offers good trading resources. There is a trade bar at the bottom of the screen that can quickly deliver trade data on any entered ticker symbol. A browser platform is available for more advanced trading.
Robinhood has a single website with an integrated order ticket and full-screen charts. But the order form doesn’t have the number of advanced order types that Schwab offers. Moreover, Robinhood’s charts have fewer graph styles and zero drawing tools.
Winner: Schwab
Desktop Software
StreetSmart Edge is Schwab’s very powerful but very user-friendly desktop software. Highlights include Market Depth, charting with right-click trading, live streaming of CNBC, and direct-access routing. Practicing StreetSmart Edge is risk-free thanks to a demo login.
Robinhood doesn’t provide simulated trading on its browser platform—and it has no desktop platform to speak of.
Winner: Schwab
Mobile Apps
Schwab’s app delivers many useful features, including mobile check deposit, bill pay, and a media center with market updates in audio format and live streaming of CNBC once again. The software’s trade ticket can submit orders for mutual funds, option contracts, stocks, and ETFs. There are four trade types for equities: market, limit, stop, and stop limit. (A second app has even more order types.) A dashboard posts data on market movers and much more.
Robinhood’s app has far less information and tools on it. For example, there is very little in terms of market news, and just forget about mobile check deposit. The software’s graphing program only provides vertical charts with no tools. Schwab’s second app, by comparison, has horizontal charting with technical indicators.
Winner: Schwab
Options
Stocks and funds aren’t always the right investment, and that’s why there are option contracts. Schwab customers can trade them on all of the broker’s platforms. During our research, we found several integrated spreads on Schwab’s regular mobile app, including the iron butterfly and a custom mode to create your own order (up to four legs). StreetSmart Edge and Schwab’s website have many advanced tools, including Greek values, an option screener, and profit-loss diagrams.
Robinhood does have some integrated multi-leg option trades on its mobile app, but for some odd reason, the firm’s browser platform doesn’t have them. There is a tool to create your own multi-leg trades. Other than that, there are no advanced tools of any kind at Robinhood.
Winner: Schwab
Cryptocurrencies
Robinhood traders can invest in these cryptocurrencies — Bitcoin (BTC), Ethereum (ETH), Ethereum Classic (ETC), Dogecoin (DOGE), Litecoin (LTC), Bitcoin Cash (BCH), USDC (USDC), Cardano (ADA), Solana (SOL), Polygon (MATIC), Shiba Inu (SHIB), Avalanche (AVAX), Uniswap (UNI), Chainlink (LINK), Steller Lumens (XLM), Compound (COMP), and Bitcoin SV (BSV) — while paying $0 commissions the whole time. While the broker’s software doesn’t provide a lot of research tools, full-screen charting is available.
Schwab doesn’t offer cryptocurrency trading directly, but it does offer futures trading, which, as we have already seen, is absent at Robinhood. Bitcoin contracts are currently tradable, and derivatives on Ethereum will be soon. Trades are $1.50 each, per contract.
Winner: Robinhood
Other Services
Dividend reinvestment program: If you don’t like spare change sitting in your core cash position, you can set up a DRIP plan. Available at both brokers.
Fractional-share trading: One of the great features Robinhood recently added is whole-dollar investing in stocks and ETFs. Cryptos of course are tradable in whole dollars, too. Schwab for some reason is starting slowly on this issue; it only offers partial-share trading in the 500 stocks that make up the Standard & Poor’s index.
IRAs: Despite all the changes Robinhood has made over the past few years, it still has no retirement accounts. Schwab does, and they have no fees.
Automatic mutual fund investing: Schwab has it.
IPO availability: If you want to invest in IPOs before the general public, Schwab is the place to be. Robinhood only provides IPO trading after an offering hits the secondary market.
Extended hours: With a brokerage account at either firm, you can trade in a pre-market session or an after-hours period. Schwab has longer sessions on both sides.
Winner: Schwab
Recommendations
Retirement savers and long-term investors: Without any IRAs, Robinhood is obviously not an option here.
Small accounts: Both brokerage firms have zero minimums and zero account fees.
Stock/ETF trading: Schwab’s computer platforms are much better than Robinhood’s simple web-based system. But with whole-dollar investing in more than just the S&P 500, Robinhood seems better for fractional-share trading.
Beginners: We do like Schwab’s educational materials so much better than Robinhood’s. And with branch locations, around-the-clock customer support, and demo trading on its desktop program, Schwab really is the only choice.
Promotions
Charles Schwab: Get commission-free online stock trades.
Robinhood: Up to $200 in FREE stock + transfer fee reimbursement.
Webull:
12 FREE stocks valued $34-$30,600 give-away at Webull.
Charles Schwab vs Robin Hood: Which is Better?
Other than cryptocurrency trading and margin borrowing, Robinhood does not look very competitive against the unwavering
Charles Schwab.
Anyone looking for the top-rated brokerage firm on the market
should go with TD Ameritrade
or read TD Ameritrade review.
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Chad Morris is a financial writer with more than 20 years experience
as both an English teacher and an avid trader. When he isn’t writing
expert content for Brokerage-Review.com, Chad can usually be found
managing his portfolio or building a new home computer.
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