Robinhood and E*TRADE are as different as night and day. Well-established E*TRADE offers deep discount commissions and a broad product line. Upstart Robinhood takes on the financial industry with commission-free stock, ETF, options, and cryptocurrency trading. E*TRADE has been around for over 30 years, while Robinhood rapidly made a name for itself in the smartphone era. E*TRADE used those years to develop better trading platforms, apps, and educational materials. Are they worth the extra fees? We'll find out as the two brokerages go head to head.
In our 2019 Best Online Brokers Awards, Robinhood received an award for Best for Low Costs.
E*TRADE received awards for Best for Beginners, Best Stock Trading Apps, Best for ETFs, Best for Options Trading, Best for Roth IRAs, Best for IRAs, and Best Web Trading Platform.
- Account Minimum: $0
- Fees: $0
- Best for: Low Costs and a sleek app
- Account Minimum: $0
- Fees: No commission for stock/ETF trades. Options are $0.50-$0.65 per contract, depending on trading volume.
E*TRADE clients can trade stocks, ETFs, mutual funds, futures, bonds, and options. They can also participate in initial public offerings (IPOs) and U.S. Treasury auctions. Robinhood offers trading in only four venues: stocks, ETFs, options, and cryptocurrencies. Robinhood doesn't allow short selling, but you can buy puts. There's also no futures or IPO trading on Robinhood. Robinhood's cryptocurrency trading was available in most U.S. states as of 2019, and they are trying to reach full nationwide coverage.
While E*TRADE's order routing is average, Robinhood's trading technology is problematic at best. Price improvement is a critical consideration for frequent traders. Robinhood's free trades seem attractive to active investors, but poor execution is a high price to pay. Robinhood is really aimed at small investors using dollar-cost averaging, asset allocation, and other passive strategies.
- Commission-free trading
- Streamlined & intuitive for new investors
- Order routing needs to be improved
- Powerful mobile and desktop experience
- Multitiered portfolio management
- Easy navigation between investment options
Mobile and Emerging Tech
Robinhood initially only offered smartphone trading, and they expanded to web-based trading later. It should come as no surprise that Robinhood has a solid and easy to use mobile app. Watchlists are also synced between the app and the website.
Even so, E*TRADE wins this category hands-down. E*TRADE has a mobile app for typical investors that is just as easy to use as Robinhood. They also give users the Power E*TRADE app, which offers effortless access to advanced trading features that aren't available at all on Robinhood. Watchlists carry over between platforms on E*TRADE, and they also have an innovative robo-advisory service.
- Easy to use mobile app
- Watchlists are synced between the app and the website
- Mobile apps sync with the desktop
- Power E*TRADE app for advanced traders
- Low-fee robo-advisor
News and Research
E*TRADE’s graphically oriented traders will appreciate access to advanced charting tools. Those who rely on spreadsheets can thumb through analyst ratings, detailed trading data, financial statements, and asset screeners. Both groups will like calendars, expert analysis, stock recommendations, and investment ideas that span market activity, trends, and fundamentals. The Power E*TRADE platform's LiveAction widget lets clients scan for technical signals using real-time live data.
Robinhood's news feed features quality sources like Yahoo Finance, Seeking Alpha, and MarketWatch. These sources are available for free elsewhere, but Robinhood is also free. Research and charting are exceedingly basic, and the five years of price history available are far less than what you get on Yahoo Finance. Robinhood Gold gives you access to better research, such as Morningstar reports and Nasdaq Level 2 Market Data. Robinhood Gold costs an extra $5 per month, but it continues to improve on Robinhood's limited research capabilities.
- Limited research and analysis
- Robinhood Gold continues to improve
- Graphs and spreadsheets based on current data
- Expert analysis, stock recommendations, and investment ideas
- Power E*TRADE offers technical analysis of live data
Education and Security
Robinhood has yet to focus on investor education, which is unfortunate because so many of the firm's customers are new investors. E*TRADE shines in this category, with an educational portal that features dozens of articles, videos, and webinars that teach basic principles. Better yet, these resources cover a wide variety of market venues, including stocks, options, futures, ETFs, bonds, fixed income, retirement planning, and mutual funds.
Robinhood responded to security concerns by offering two-factor authentication. The upstart brokerage supported SMS text messages and authenticator apps, but not U2F, as of September 2019. E*TRADE offers two-factor authentication via Symantec's VIP. VIP is an authenticator app that is also available as a stand-alone hardware device for improved security and convenience.
- Few educational resources
- Two-factor authentication
- Webinars and in-person events
- A wide selection of videos
- Symantec VIP for two-factor authentication
Robinhood offers commission-free trading, making money through payments for order flow with third parties and interest on uninvested client funds. Robinhood Gold adds margin trading and research capabilities for a fee of $5 per month.
E*TRADE eliminated its base trading commissions on equities, ETFs, and options in the U.S., effective October 7th, 2019. Options trading is $0.65 per contract, though customers who trade more than 30 times per quarter, or who have more than $250,000 in their accounts are eligible for $0.50/contract commissions. Margin interest rates are near the top of the brokers we surveyed.
Investopedia is dedicated to providing investors with unbiased, comprehensive reviews and ratings of online brokers. Our reviews are the result of six months of evaluating all aspects of an online broker’s platform, including the user experience, the quality of trade executions, the products available on their platforms, costs and fees, security, the mobile experience and customer service. We established a rating scale based on our criteria, collecting over 3,000 data points that we weighed into our star scoring system.
In addition, every broker we surveyed was required to fill out a 320-point survey about all aspects of their platform that we used in our testing. Many of the online brokers we evaluated provided us with in-person demonstrations of their platforms at our offices.
Our team of industry experts, led by Theresa W. Carey, conducted our reviews and developed this best-in-industry methodology for ranking online investing platforms for users at all levels. Click here to read our full methodology.