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ETRADE vs Robinhood


2019 Robinhood or ETRADE - which discount broker is better? Compare IRA/Roth accounts, online stock trading fees, and mutual funds offerings.




The Challenge


Two very different brokerage firms are E*Trade and Robinhood. While the former advertises heavily, the latter is less well known. This article will make a detailed comparison of the two brokers, evaluate their strengths and weaknesses, and determine which is better - Robinhood or E*Trade?


Categories


Broker Review Cost Investment Products Trading Tools Customer Service Research Overall Rating
Etrade
Robinhood
Firstrade


Cost


Broker Fees Stock/ETF
Commission
Mutual Fund
Commission
Options
Commission
Maintenance
Fee
Annual IRA
Fee
Etrade $0 $19.95 $0 + $0.65 per contract $0 $0
Robinhood $0 na $0 $0 na
Firstrade $0 $0 $0 $0 $0


Promotions


Etrade: Get $2,500 cash bonus when you open an account with $1 million.

Robinhood: Get one free $3-$7 value stock when you open an account.


Customer Service


An E*Trade associate can be reached by phone 24 hours a day, 7 days a week. The broker's website has a helpful on-line chat function. The company has 30 brick-and-mortar locations in 17 states. There is also a phone number for clients who are temporarily outside the US.

Robinhood does not provide its customers an international phone number. Moreover, it doesn't even provide a toll-free US number. Customer service representatives are available only during market hours, which will eventually be a problem for some traders. It took 48 hours for an agent to respond to a test e-mail.

Looks like E*Trade is the better choice in this category.


Trading Tools


E*Trade's website is user friendly. Helpful menus make finding different areas of the site fairly straightforward. There are good charting tools available, and a graph can be shown full screen. Disappointingly, the broker does not have a trade bar on its site. Instead, trades are simply placed on basic web pages. Trades can also be placed on the company's advanced desktop software, which is available to active traders. A mobile app and platform for Apple Watch are both available at no cost. On-demand CNBC videos can be viewed on tablets and phones, while active traders can watch a live stream of the business channel.

An advanced platform is not available at Robinhood. Instead, trades are placed on a very simple mobile app. The charting on this mobile platform is less advanced compared to E*Trade's app. Surprisingly, the Robinhood app does not have the capability to display a chart horizontally. There is no other charting program available from this broker, although Robinhood does have a platform for Apple Watch.

E*Trade succeeds in this category, too.


Robin hood vs Etrade


Research and Education


Investors at E*Trade will find a large selection of research and educational materials on the broker's website. Several videos and articles provide basic information on a wide variety of topics, including fixed-income products and 401(k) rollovers. Free stock reports are available from independent analysts such as Thomson Reuters and S&P Capital IQ. Effective screeners can be used to search through all security types E*Trade offers. There is also educational material on futures contracts, which E*Trade customers can buy and sell. Live web-seminars are held frequently throughout the week, and in-person events are also available at some of the company's local branches.

Surprisingly, there are no educational resources at Robinhood. The website is used mainly for account application, although there is a limited help section. The broker's mobile app has a small amount of information on individual stocks, but the E*Trade website has a lot more.

Robinhood fails again.


Commissions and Account Requirements


Robinhood (and Firstrade) can certainly claim that it has the lowest possible commissions. Stock and ETF trades cost $0. That's not a typo. Trading at Robinhood is free. The company says it is able to do this by charging for paper versions of statements and trade confirmations. The firm also passes on regulatory and exchange fees to traders. A $10 fee is also assessed for placing a trade over the phone with a living, breathing agent.

E*Trade is charging $0 for stock and ETF trades. Using a live representative to place a trade over the phone carries a $25 charge.

A brokerage account at either company has no special fees. There is no minimum deposit required to open a Robinhood account, although E*Trade requires $500.

Robinhood wins here.


Mutual and Exchange-traded Funds


All US-listed ETF's can be traded at either firm. E*Trade clients have access to more than 240 commission-free ETF's, while Robinhood offers all ETF's commission-free. In the realm of mutual funds, Robinhood has no offerings. This must disappoint some traders. Over 7,800 mutual funds are available for purchase at E*Trade, with more than 2,100 having neither load nor transaction fee.

This category is awarded to E*Trade.


Cash Management


E*Trade customers have two checking accounts to choose from— E*Trade Checking and Max-Rate Checking. Both accounts come with FDIC insurance, free bill pay, and a free debit card. The basic checking account does not earn interest and does not offer ATM refunds. The Max-Rate checking account offers both, but requires a balance of $5,000 in order to avoid a monthly fee. Conveniently, an E*Trade Bank account can be linked to a securities account.

Regretfully, Robinhood does not offer any cash management functions for its clients. Free trades apparently come at a cost in other areas.

E*Trade succeeds again.


Promotions


Etrade: Get $2,500 cash bonus when you open an account with $1 million.

Robinhood: Get one free $3-$7 value stock when you open an account.


Robinhood vs E*Trade: Judgment


E*Trade won five categories, and Robinhood succeeded just once. E*Trade wins by a mile. While Robinhood customers receive free trades, they don't get much else. Anyone looking for $0 commission trades will find a better deal at the Firstrade.