Robinhood vs Interactive Brokers


Interactive Brokers IBKR vs Robinhood—which is better in 2022? 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-dealer to charge $0 commissions on stock and ETF trades, it’s not the only one to do so now. Interactive Brokers has reduced its trading fee on equity trades all the way to zero. Plus, it has a lot of features that Robinhood lacks. Has Robinhood met its match? Let’s have a look.


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 na
WeBull $0 na $0 per contract $0 $0


Services


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


Promotion Links


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

Robinhood: Up to $200 in FREE stock when you open an account with this referral link.

Webull: 12 FREE stocks valued $34-$30,600 give-away at Webull.



Category #1: Available Investments


Interactive Brokers:

Interactive Brokers, although based in the United States, is really a global brokerage firm. It opens accounts for clients outside the United States and offers trading on a lot of foreign exchanges. Asset classes include:

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

Exchanges include:

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

Robinhood:

The situation over at Robinhood is vastly different. Right off the bat, the company only accepts applications from legal U.S. residents. Those legal U.S. residents can only trade assets on American exchanges because that’s all the broker offers. And the list of tradable instruments is much smaller than Interactive Brokers’. You can take off precious metals, mutual and closed-end funds, warrants, futures, forex, and bonds.

The one advantage that Robinhood has over its rival in this category is more digital currencies. Currently, Robinhood offers eleven coins for trading, while Interactive Brokers has just four.

Neither brokerage house in this contest 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. Currently, the broker charges a flat 5.58% for loans across all balance tiers. Customers who sign up for IBKR Pro get even better rates. The tiered scale ranges from 4.58% to 3.58%.

Another great advantage of margin trading at Interactive Brokers is margin information that the broker provides on its software. Its desktop platform and mobile app deliver data points like short maintenance margin and initial long margin requirements.

Robinhood:

Robinhood’s software does not display such information, which is strike one in this category for the broker-dealer. All margin accounts pay a flat monthly fee, whether they borrow funds or not. That’s strike two. Currently, the fee is $5. That fee includes the first $1,000 of borrowed money at no cost.

Beyond $1,000, Robinhood currently charges a flat 5.75% for margin balances, and that is strike three.

Winner: Interactive Brokers


Category #3: Websites


Interactive Brokers:

Client portal is the term Interactive Brokers uses for its website. This portal is definitely a gateway to a great trading experience. There is a messaging center, an artificial intelligence named iBot, an advanced trading ticket, and very good charting (courtesy of TradingView).


Interactive Brokers vs Robinhood


Charts have eleven plot styles. Possibilities include point & figure, baseline, and Renko. We counted around a hundred technical indicators, and there are lots of 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 doesn’t come with any special name, and this is perhaps appropriate as it doesn’t provide a gateway to the same level of trading. Charts have just two plot styles (line and candlestick), and there are only four technical studies.


Robinhood or Interactive Brokers


As for order entry, Robinhood’s ticket has six trade types but no bracket orders. There are two duration options (IB offers three).

Besides charting and order entry, Robinhood’s site also has fewer resources on it. For example, there is no AI. Although there is a watchlist, there are no alerts. Interactive Brokers’ client portal, by contrast, does have alerts.

Winner: Interactive Brokers


Category #4: Other Software


Interactive Brokers:

Trader Workstation is IB’s very good desktop platform. It has tons of professional-level trading tools. These include excellent charting in full-screen mode, a very sophisticated order ticket, and fantastic option tools. Examples include a volatility lab, a strategy builder, and a probability lab. To top it all off, Bloomberg Business News streams free of charge.


IBKR or Robinhood


And then there’s the mobile app. Once again, there are many advanced tools. The software has two order tickets, just in case one isn’t enough. One of these is a horizontal wheel order-entry system that pre-populates fields with scrollable numbers.

Charts on IB’s mobile app can be displayed horizontally, and there are several graphing tools. Examples include technical indicators like the Williams Oscillator and Bollinger Bands.


Interactive Brokers vs Robinhood


Other great resources on Interactive Brokers’ app include iBot, global trading, and mobile check deposit.

Robinhood:

Robinhood does not (yet) have a desktop platform. It does have a decent mobile app, although many features we found on IB’s app are missing. Robinhood’s order ticket is borrowed from its website. Order types include limit, trailing stop, and recurring.


Robinhood vs IBKR


Charting on the Robinhood app needs serious improvement. A graph cannot be displayed horizontally, and there are no tools of any kind. The platform’s watchlists are the same ones that show up on the website.


Robinhood vs Interactive Brokers


Winner: Interactive Brokers


Category #5: Day Trading


Level II Quotes. Available at both firms (for a fee).

Direct-access Routing. Available only at Interactive Brokers.

Shorting. Robinhood does not permit shorting, but Interactive Brokers does.

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

Interactive Brokers:

Trader Workstation displays the number of day trades an account has. The relevant information will be found in the Account Window, which will be found under the Account tab.

An account at Interactive Brokers that has been flagged as a PDT account can be reset. The tool to do this will be found in the messaging center. Click on the Help link at the top of the client portal and then select Secure Message Center. Next, select Trade Issues and then Pattern Day Trader Reset Request.

Robinhood:

Robinhood’s website displays the number of day trades an account has made (look for this feature on the Investing tab under the Account menu). The broker’s website also has a toggle switch for pattern day-trade protection. This feature will prevent an account from placing a trade that would make the account a PDT account. The toggle switch will be found on the Settings tab under the Account menu.

Winner: Interactive Brokers


Category #6: Other Services


Cash Management Features: Both brokerage firms in this competition offer debit Mastercards. Only Robinhood has round-ups, bonuses, fee-free ATM withdrawals, and the ability to send checks.

Periodic Mutual Fund Investing: Neither company offers this service.

Initial Public Offerings: Robinhood, but not Interactive Brokers, delivers access to upcoming equity launches.

Fractional Share Trading: Stocks, ETFs, and cryptocurrencies can be purchased with whole dollars at either brokerage firm in this survey.

Individual Retirement Accounts: Interactive Brokers has Roth, Inherited, traditional, and SEP retirement accounts. Robinhood does not have any IRAs.

Extended Hours: Both investment firms offer pre-market and after-hours trading for stocks and ETFs.

DRIP Service: Robinhood customers can sign up for auto dividend reinvesting for ETFs and stocks. Interactive Brokers has a DRIP for stocks but not for ETFs.

Winner: Robinhood


Our Recommendations


Small Accounts: Cash accounts will be better off with Robinhood. Margin traders should go with Interactive Brokers.

Long-Term Investors and Retirement Savers: As the only investment firm with IRAs, Interactive Brokers is the only real choice.

ETF & Stock Trading: With its great mobile app and very good desktop software, Interactive Brokers gets our endorsement.

Mutual Fund Trading: Interactive Brokers is the only option.

Beginners: This one is easy. Interactive Brokers is intended only for experienced traders, and this emphasis is reflected pretty much everywhere—its pricing schedule, its software, its educational materials, etc. Robinhood is much better for new traders.


Promotion Links


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

Robinhood: Up to $200 in FREE stock when you open an account with this referral link.

Webull: 12 FREE stocks valued $34-$30,600 give-away at Webull.



Robinhood vs Interactive Brokers Judgment


Zero-dollar commissions are no longer enough. Interactive Brokers has these plus many more features that won’t be found at Robinhood.


Updated on 6/22/2022.


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.