Robinhood vs Interactive Brokers (2024)


Interactive Brokers IBKR vs Robinhood—which is better in 2024? Compare IRA/Roth accounts, online investing fees, stock broker mutual fund rates, and differences.


Interactive Brokers vs. Robinhood Introduction


Although Robinhood was the first broker to offer free commissions on stock and ETF trades, Interactive Brokers has also dropped its equity trade fees to zero. Plus, it offers many features that Robinhood lacks. Has Robinhood met its match? Let's find out.


Fees


Broker Fees Stock/ETF
Commission
Mutual Fund
Commission
Options
Commission
Maintenance
Fee
Annual IRA
Fee
IB $0 $14.95 $0.70 per contract $0 $30
Robinhood $0 na $0 per contract $0 $0


Services


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


Promotion Links


Interactive Brokers: Use this referral link to get up to $1,000 of IBKR stock for free!

Robinhood: 1% IRA match and up to $200 FREE stock at Robinhood.



Category #1: Available Investments


Interactive Brokers:

Interactive Brokers operates globally, opening accounts for clients worldwide and offering trading on numerous foreign exchanges. The asset classes include:

  • Precious metals
  • Funds (mutual, exchange-traded, and closed-end)
  • Warrants
  • Futures
  • Options
  • Forex
  • Cryptocurrencies
  • Stocks
  • Bonds

The exchanges include:

  • Toronto Stock Exchange
  • Frankfurt Stock Exchange
  • Budapest Stock Exchange
  • Euronext
  • Hong Kong Stock Exchange
  • Tokyo Stock Exchange

Robinhood:

Robinhood only accepts U.S. residents and offers trading on U.S. exchanges. Its list of tradable instruments is much smaller, missing precious metals, mutual and closed-end funds, warrants, futures, forex, and bonds.

The one advantage Robinhood has is offering more cryptocurrencies for trading. Robinhood currently offers eleven coins, while Interactive Brokers offers just four.

Neither brokerage offers investment advice or any type of managed account.

Winner: Interactive Brokers


Category #2: Margin Trading


Interactive Brokers:

Margin borrowing is consistently inexpensive at Interactive Brokers. The broker charges a flat 7.83% for loans across all balance tiers. Customers who sign up for IBKR Pro get even lower rates, ranging from 6.83% to 5.83%.

Another advantage at Interactive Brokers is the margin information provided on its software. Both its desktop platform and mobile app deliver details like short maintenance margin and initial long margin requirements.

Robinhood:

Robinhood’s software does not display such information. The broker currently charges 6.75% for margin balances under $50K and it goes down from there.

Winner: Robinhood


Category #3: Websites


Interactive Brokers:

The client portal at Interactive Brokers is a gateway to a robust trading experience. It includes a messaging center, an AI named iBot, an advanced trading ticket, and excellent charting (courtesy of TradingView).


Interactive Brokers vs Robinhood


Charts have eleven plot styles including point & figure, baseline, and Renko. There are around a hundred technical indicators and many ways to customize a chart.

The order ticket on the client portal has six trade types and integrated bracket orders (take profit and stop loss).

Robinhood:

Robinhood's site is more basic, with charts offering just two plot styles (line and candlestick) and only four technical studies.


Robinhood or Interactive Brokers


Robinhood's order ticket has six trade types but lacks bracket orders. It has two duration options compared to IB's three.

Robinhood's site also lacks resources like AI and alerts, which Interactive Brokers offers.

Winner: Interactive Brokers


Category #4: Other Software


Interactive Brokers:

Trader Workstation is IB's advanced desktop platform. It features top-tier trading tools like full-screen charting, a sophisticated order ticket, and excellent options tools. These tools include a volatility lab, a strategy builder, and a probability lab. Plus, Bloomberg Business News streams free of charge.


IBKR or Robinhood


The mobile app from Interactive Brokers also offers advanced tools. It includes two order tickets—one of which is a horizontal wheel system that pre-populates fields with scrollable numbers.

The charts on IB's mobile app can be displayed horizontally and come with several tools, such as the Williams Oscillator and Bollinger Bands.


Interactive Brokers vs Robinhood


Additional features on Interactive Brokers' app include iBot, global trading options, and mobile check deposit.

Robinhood:

Robinhood does not currently have a desktop platform, but it does offer a mobile app. However, it lacks many of the features found on IB's app. The order ticket is similar to its website version, with types like limit, trailing stop, and recurring.


Robinhood vs IBKR


Charting on Robinhood's app is very basic, lacking horizontal display and any technical tools. The watchlists on the app are the same as those on the website.


Robinhood vs Interactive Brokers


Winner: Interactive Brokers


Category #5: Day Trading


Level II Quotes. Both firms offer Level II quotes, though they come with a fee.

Direct-access Routing. Only available at Interactive Brokers.

Shorting. Robinhood does not allow short selling, but Interactive Brokers does.

Routing Fees and Rebates. Maker-taker fees are found at Interactive Brokers, not at Robinhood.

Interactive Brokers:

Trader Workstation shows the number of day trades on an account in the Account Window under the Account tab.

An account at Interactive Brokers flagged as a PDT can be reset using the messaging center. Click "Help" at the top of the client portal, then "Secure Message Center," select "Trade Issues," and "Pattern Day Trader Reset Request."

Robinhood:

Robinhood's website shows the number of day trades under the Investing tab in the Account menu. It also has a pattern day-trade protection toggle to prevent trades that would classify the account as a PDT. This can be found under Settings in the Account menu.

Winner: Interactive Brokers


Category #6: Other Services


Cash Management Features: Both Interactive Brokers and Robinhood offer debit Mastercards. Only Robinhood offers round-up savings, cashback bonuses, free ATM withdrawals, and the ability to send checks without additional fees. The broker also pays high 5% APY on uninvested cash.

Periodic Mutual Fund Investing: Neither Interactive Brokers nor Robinhood offers regular investment plans for mutual funds.

Initial Public Offerings: Robinhood provides its users access to upcoming stock launches, unlike Interactive Brokers.

Fractional Share Trading: Both Interactive Brokers and Robinhood allow the purchase of stocks, ETFs, and cryptocurrencies using any dollar amount.

Individual Retirement Accounts: Interactive Brokers offers various types of IRAs including Roth, Inherited, traditional, and SEP. Robinhood provides a 1% free match for its IRAs, which Interactive Brokers does not.

Extended Hours: Both Interactive Brokers and Robinhood allow trading before the market opens and after it closes.

DRIP Service: Robinhood lets customers automatically reinvest dividends from ETFs and stocks. Interactive Brokers offers this for stocks but not for ETFs.

Winner: Robinhood


Our Recommendations


Small Accounts: For both cash and margin accounts, Robinhood is preferable.

Long-Term Investors and Retirement Savers: Robinhood's 1% free match for IRAs makes it a strong choice for retirement savings.

ETF & Stock Trading: With superior mobile and desktop platforms, Interactive Brokers is the recommended choice.

Mutual Fund Trading: Interactive Brokers is the better option as Robinhood does not offer mutual fund trading.

Beginners: Robinhood's simpler approach and educational support make it more suitable for those new to investing. Interactive Brokers targets more experienced traders with its advanced tools and features.


Promotion Links


Interactive Brokers: Use this referral link to get up to $1,000 of IBKR stock for free!

Robinhood: 1% IRA match and up to $200 FREE stock at Robinhood.



Robinhood vs Interactive Brokers Judgment


While zero-dollar commissions are standard now, Interactive Brokers offers additional features not found at Robinhood, making it a more robust platform for serious traders. Robinhood remains a strong choice for those just starting out.


Updated on 5/22/2024.


About the Author
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.