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Does One Outperform The Other?

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Robinhood and E*TRADE are two online investment platforms that can help you grow your investment portfolios. Although both could be helpful for experienced investors, Robinhood provides a unique experience for new investors. So, which is right for your specific situation?

I’ll take a closer look at each of these popular investment platforms to help you make a decision about which is right for your financial goals. 

Robinhood vs. E*TRADE summary

You might be thinking that Robinhood and E*TRADE are both investment platforms, so how different can they be? Although both offer high-quality investment platforms, each offers different features to set themselves apart. 

As you explore these investment options, consider what you are looking for. Are you looking to start your investment portfolio with assistance? Or are you a seasoned DIY investor that is searching for lower costs?

Features Robinhood E*TRADE
Sign-up fees $0 $0
Commission $0 $0
Trade fee $0 $0 (plus $0.65 per options contract)
Minimum initial investment $0 $500 (for Core Portfolios)
Cryptocurrency available Yes No
Types of accounts available Taxable accounts Taxable accounts, traditional IRAs, Roth IRAs, rollover IRAs, SEP IRAs
Margin rates $5/month for up to $1,000; 5% after $1,000 threshold 6.45%; discounts and upcharges on base rate will vary by debit balance
Tradable assets Stocks, options, ETFs, cryptocurrency Stocks, options, ETFs, Bonds, Futures
Platforms iOS, Android, Desktop iOS, Android, Desktop
In-app analytics Morningstar (Robinhood Gold requires $5/mo) Access to research and interactive charts, snapshot analysis, spectral analysis, live action, and more.

About Robinhood

Robinhood launched in 2016 and made a name for itself by pioneering commission-free trades. You’ll be able to trade stocks, ETFs, options, and cryptocurrency on this platform without facing any fees beyond the standard regulatory fees that all brokerage firms charge. 

In order to get started with Robinhood, you won’t have to save up a large deposit. In fact, you can get started today without any minimums involved and even purchase fractional shares of companies with higher stock prices.

Although you’ll need to pick out your own investments, there are many built-in resources to help you learn how to invest. Once you are more comfortable with your knowledge, you can pick out your own investments on Robinhood. 

Unfortunately, there aren’t any robo-advisor assistants programmed into Robinhood. With that, you’ll be in charge of your own trades. With a user-friendly interface, you’ll be able to learn more about your trading opportunities and build a unique portfolio to reflect your goals. 

Advertiser Disclosure – This advertisement contains information and materials provided by Robinhood Financial LLC and its affiliates (“Robinhood”) and MoneyUnder30, a third party not affiliated with Robinhood. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Securities offered through Robinhood Financial LLC and Robinhood Securities LLC, which are members of FINRA and SIPC. MoneyUnder30 is not a member of FINRA or SIPC.”

About E*TRADE

Robinhood Vs E*TRADE: Does One Investing Platform Outperform The Other? Find Out! - E*TRADEE*TRADE is an online investment platform that has been around since the early 1980s. With that, it is a well-known platform that has stood the test of time. 

In the past, E*TRADE has been known as a great platform for investors who want to buy and trade independently. Although you still have the opportunity to manage your own portfolio with E*TRADE, you’ll also be able to work with a core portfolio that is managed by a professional. 

E*TRADE stands out with a wide range of learning and analysis tools to effectively manage your investments. 

Robinhood vs. E*TRADE investment performance

In terms of investment performance, neither platform provides a big edge over the other for self-managing investors. Of course, the investment returns you’ll see in your account will vary based on your investment choices.

But since these platforms don’t charge a commission, you won’t be missing out if you choose one platform over another. 

Robinhood investment options

Robinhood Vs E*TRADE: Does One Investing Platform Outperform The Other? - Robihood investment options

Robinhood offers investors the opportunity to trade stocks, ETFs, options, and cryptocurrency. Although there are no prebuilt portfolios available, there are a wide variety of individual investments available. One individual investment worth noting is the ability to buy fractional shares. This can be helpful if you don’t have over $1,000 to invest in a particular stock. 

Within the platform, you’ll find extensive resources to help you learn more about investing. If you are a new investor, this can be especially useful information. However, you’ll need to pay $5 per month to access Robinhood Gold with its Morningstar investment insights. 

A big drawback of Robinhood is that you can only open a traditional taxable investment account. You won’t have the opportunity to open a retirement account, which could be a dealbreaker depending on your financial goals. 

E*TRADE investment options

Robinhood Vs E*TRADE: Does One Investing Platform Outperform The Other? - E*TRADE investment options

E*TRADE provides a wide range of investment opportunities, including stocks, ETFs, options, and bonds. As a self-managing investor, you won’t need to worry about any commissions and very few fees. 

Although you can self-manage your investments with E*TRADE, you can also invest in managed portfolios. The managed core portfolios will require $500 to get started and charge a 0.30% advisory fee. You can choose portfolios with smart beta investments, socially responsible companies, and tax-aware opportunities. As a note, the historical performance data for E*TRADE’s managed portfolios are unavailable until you sign up for an account. At that point, you can evaluate whether you want to self manage or go with the managed options. 

If you are looking to open a retirement account, then E*TRADE is a good option because they offer most of the available retirement accounts. 

Robinhood vs. E*TRADE investment performance summary

If you want to make trades for your own investment portfolio, both Robinhood and E*TRADE provide platforms to accommodate that. You’ll be able to set up and manage your own portfolio without fees holding you back.

If you want to set up your investments and forget about them, then a managed portfolio could be a better option. E*TRADE provides an opportunity to invest in managed portfolios. 

Robinhood vs. E*TRADE pros

Let’s take a look at the pros that stand out. 

Robinhood pros:

  • Access to cryptocurrency – If you are interested in the opportunities provided by cryptocurrency, you’ll have access to it with Robinhood. 
  • No minimum balance requirements – With no minimum balance requirements, you won’t have to save up to get started. 
  • Easy to get started – A smooth interface and visual dashboard are perfect for new investors. 

E*TRADE pros:

  • Some brick-and-mortar locations – E*TRADE has over 30 physical locations. 
  • Established company – E*TRADE has been around since 1982.
  • Socially responsible investments available – You can choose managed portfolios that are socially responsible. 
  • Paper trading – You can test investment strategies without using real money with the paper trading option. 

Robinhood vs. E*TRADE cons

Everything has cons, here’s what stands out to me. 

Robinhood cons:

  • Investment limitations – You can’t invest in mutual funds or bonds. 
  • No automatic reinvesting – Your dividends will not be reinvested without your direct involvement. 
  • No assistance available – If you want some investment guidance in the form of prebuilt or managed portfolios, you won’t find that here. 
  • Taxable accounts only – No retirement accounts available.

E*TRADE cons:

  • Higher cost on managed portfolios – The fees for managed portfolios is relatively expensive. 
  • Limited phone support – You can speak to a team of specialists when you need help but only on weekdays. 

Why choose Robinhood?

A good place to get started

If you want to build a unique investment portfolio by picking individual investments and following them closely throughout your investment career, then Robinhood is a good choice. With helpful information available for new investors, you can learn as you build your investments. 

Cryptocurrency available

If you want to trade in cryptocurrency, Robinhood is a good option. Unlike E*TRADE, you’ll have access to cryptocurrency trading. 

Margin trading opportunities

If you upgrade to Robinhood Gold, you’ll be able to receive extra buying power when you enable borrowing. This buying power represents the cash you have already available to spend, plus the amount you may borrow on margin. 

Learn more about Robinhood today or read our full Robinhood review.

Why choose E*TRADE?

Investors looking for a mix of self-managed and managed portfolio

If you want to try your hand at DIY investing but want to leave some of your assets in professional hands, then E*TRADE is a good opportunity. You can select a managed portfolio that aligns with your investment goals. But also enjoy the freedom of self-directed investing through your account. 

Fund investors

Want to invest in ETFs or mutual funds? E*TRADE provides the opportunity to invest in 250 commission-free ETFs and 4,400 no-fee mutual funds. 

Learn more about E*TRADE today or read our full E*TRADE review.

Summary

Robinhood and E*TRADE are both user-friendly investment platforms that could help you reach your investment goals. Both offer investors the chance to build a self-directed portfolio with minimal fees. Plus, E*TRADE allows you to blend a managed portfolio into your overall portfolio. 

Robinhood is a good opportunity for new investors that want to self-manage their portfolio in a taxable account with access to cryptocurrency. E*TRADE provides investors a wealth of data for decision making and the option to choose a managed portfolio. 

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