Robin Hood competitors

RobinHood Competitors

RobinHood vs competition: fees, rates, and rankings. Who are top RobinHood competitors? List of largest RobinHood rival brokerage firms.

Overview of Robinhood’s Competitors

Robinhood is the brokerage industry’s ultimate low-cost firm, offering $0 commissions. Although its customers receive this unbelievable price, it doesn’t come without sacrifices in other areas; so other brokerage houses overall may provide very competitive investment services. In particular, Robinhood traders should consider Merrill Edge, TD Ameritrade, and Interactive Brokers, all of which provide low-cost trading in certain situations plus a host of benefits that Robinhood doesn’t offer.

M1 Finance

M1  rating

The only other company that offers completely free investing is M1 Finance. A new hybrid robo/self-directed brokerage firm is trying to shake up the investment industry. With a style of financial management that incorporates features of both automated investing and self-directed strategies, this company is sure to attract a lot of interest.

Learn more in M1 investing review »

Merrill Edge

Merrill Edge rating

Merrill Edge is Bank of America’s on-line discount brokerage arm. It normally offers stock and ETF trades at $6.95, but customers who qualify for a Preferred Rewards Platinum or Platinum Honors membership will receive free trades every month. The Platinum tier offers 30 free equity trades per month, while a Platinum Honors membership comes with 100 commission-free trades per month.

Both of these are Bank of America/Merrill Edge programs, and they come with a host of other benefits. For example, a Platinum membership provides a $400 reduction in the bank’s mortgage origination fee, while the Platinum Honors tier offers a $600 rebate.

To qualify for the Platinum level, the financial company requires a Bank of America checking account plus $50,000 on deposit with a combination of the company’s three financial arms: Merrill Edge, Merrill Lynch, or Bank of America. The amount doesn’t need to be in cash; it could be all securities, but you still have to have the checking account open. The Platinum Honors program requires $100,000.

Most investors won’t need more than 50 or 100 trades per month, so Merrill Edge traders can get the same commissions as they could at Robinhood plus a host of other great features that the Medieval broker doesn’t offer, such as advanced trading technology, including a robust desktop platform. Merrill also provides managed accounts, a very sophisticated website, mutual funds, options, fixed-income products, and cash management tools. Robinhood offers none of these services, although Merrill customers must have significant assets to get the free trades, which Robinhood doesn’t require.

Read Merrill Edge review »

TD Ameritrade

TD Ameritrade rating

Free trades can also be had at TD Ameritrade. The broker has an on-going special for new customers who deposit at least $3,000. This amount will receive commission-free trading for two months. A joint, individual, or retirement account can be used for this special. Depositing more will qualify for something that Robinhood does not offer: a cash bonus. A deposit of $25,000 or more will earn $100, while $100,000 receives a $300 bonus. Depositing $250,000 will earn the broker’s top prize of $600. Promotion link: Trade free for 60 days + get up to $600.

Because the free trades are valid for 60 days, you could create a portfolio of various ETF’s and stocks, all at no charge. There would, however, be a $6.95 charge per security on the sell side, assuming it was more than two months later.

Like Robinhood, TD Ameritrade offers zero account fees. Unlike Robinhood, TD Ameritrade offers a large selection of financial services. These include Individual Retirement Accounts, which Robinhood still does not offer. Also available is free trading technology, including the very sophisticated thinkorswim, all at no charge. TD Ameritrade’s mobile platform far exceeds Robinhood’s simple app, which offers almost nothing except trading. All of TD Ameritrade’s trading platforms offer live streaming of CNBC at no cost.

TD Ameritrade also has a very reasonably-priced robo-advisory account called Essential Portfolios. This service provides computerized account management for just 0.30%. Human advisors are available for less than 100 basis points.

TD Ameritrade is one of the few brokerage houses to also provide access to forex and futures. Of course, many securities are available, too, including a large selection of mutual funds. Over 2,000 of them carry no transaction fees - they are commission-free. TD Ameritrade also has an on-going list of 296 ETF’s that are always free to trade.

Read TD Ameritrade review »

Interactive Brokers

Interactive Brokers rating

Interactive Brokers does not offer promotions like TD Ameritrade, but it does provide very low pricing for active traders. There are actually two pricing schedules: a fixed-rate plan and a tiered schedule. The fixed-rate program costs just half a penny per share with a $1 minimum order amount. There is a maximum commission of 0.5% of trade value. An order of 200 shares would cost just $1.

With tiered pricing, commissions vary based on the total number of shares an account trades per month. At less than 300,000 shares, the price is 0.35¢. The commission gradually decreases to 0.05¢ per share for accounts that can trade 100,000,000 shares every month. There is a minimum commission of $0.35 and a maximum of 0.5% of trade value. Most accounts would trade less than 300,000 shares, so a 35¢ commission would be the norm. Although this is higher than Robinhood, it is still very low.

Both commission schedules receive commission-free ETF’s from Global X, Infrastructure, O’Shares, Cambria, Eaton Vance, ACSI, and ETF Securities. One notable difference between Robinhood and Interactive Brokers is that IB requires $10,000 to open an account, while Robinhood has no minimum.

IB also has a monthly inactivity fee of $10. Any account that does not generate at least $10 in commissions every month will be billed the difference. So every account will pay at least $10 every month to the broker.

An IRA at Interactive Brokers can be opened with just $5,000, and as of 2018, there is no longer any termination fee for closing one. A retirement account with the broker can be denominated in any currency, and a variety of financial instruments can be traded in one. Besides securities, forex and futures are both available.

Read Interactive Brokers review »

RobinHood Competitors Summary

Robinhood has the advantage of always providing zero commissions on stock and ETF trades. But that is all the broker seems to be able to deliver. For a little more in trading fees, investors can find much better values elsewhere, especially if they trade frequently or have large account balances.