E*Trade VS Robinhood – Which Broker is Right For You in 2024

Choosing an online broker is a crucial first step for anyone entering the world of investing. Two of the most popular options are E*Trade and Robinhood. Both platforms offer commission-free stock and ETF trades, making them particularly attractive to beginners. But beyond the surface, they have distinct strengths and weaknesses that accommodate different investor types.

This blog is a complete guide on ETrade VS Robinhood to help you determine the best broker for your investments.

ETrade Vs Robinhood – Overview

ETrade, owned by Morgan Stanley, is an online brokerage platform for investing. They offer commission-free trading on stocks, ETFs, and mutual funds. You can use their website or mobile apps to trade and research investments. ETrade serves both beginner and experienced investors with various account types and educational resources.

On the other hand, Robinhood is a financial app that lets you buy and sell stocks, ETFs, and cryptocurrency commission-free. They target young investors with a user-friendly interface. Their main revenue source comes from directing trades to certain market makers, rather than prioritizing best execution for investors.

ETrade Vs Robinhood – Investment Options

ETrade and Robinhood are both popular investment platforms, but they serve different investor needs. Here’s a breakdown of their investment options:

E*Trade offers a wider range of investments, including:

  • Stocks and ETFs: Commission-free trades for stocks and ETFs.
  • Mutual Funds: Thousands of no-load mutual funds with no transaction fees.
  • Options Contracts: For more experienced investors.
  • Bonds: Invest in corporate and government bonds.
  • CDs: Certificates of Deposit for fixed-income returns.
  • Futures Contracts: For advanced traders.

Robinhood focuses on simplicity and low costs:

  • Stocks and ETFs: Commission-free trades for stocks and ETFs.
  • Options Contracts: Available, but may require upgrading to Robinhood Gold (subscription service).
  • Fractional Shares: Invest in portions of a share, good for beginners with limited capital.
  • Cryptocurrency: Buy and sell cryptocurrencies (not available on E*Trade).

Choosing the Right Platform:

  • E*Trade is better for investors who want a wider variety of investment options, research tools, and educational resources. It’s also a good choice for those seeking mutual funds, bonds, and other asset classes besides stocks and ETFs.
  • Robinhood is better for beginners who prioritize low costs and a simple, mobile-friendly interface. It might also be a good fit for those interested in fractional shares and cryptocurrency trading.

ETrade Vs Robinhood – Fees

E*Trade and Robinhood both offer commission-free trades on stocks and ETFs, but there are some key differences in their fee structures:

Feature E*TradeRobinhood
Stocks & EFTs$0 commission$0 commission
Mutual FundsCommission-free on over 6,400 no-load fundsCharges commissions
Options $0.65 per contractCommission-free
OTC Stocks$6.95 commissionNo account fees
Margin RatesStarts at 14.20%Starts at 6.75%

ETrade – Pros and Cons

Pros Cons 
Many investment options (stocks, ETFs, mutual funds, options, futures, bonds)Less user-friendly interface
Strong research & tools (charts, screeners, idea generators, reports)Limited fractional shares
Educational resourcesLower interest on uninvested cash
Retirement accounts
Integrated bank accounts
Strong customer support

Robinhood – Pros and Cons

Pros Cons 
Simple and user-friendly interfaceLimited investment options (fewer mutual funds, no bonds/futures)
Commision-free trading (stocks, EFTs,options) Basic research tools
Fractional sharesLimited customer support
High interest on uninvested cash Potentially higher margin rates than ETrade
Cryptocurrency trading

ETrade Vs Robinhood Customer Service

E*Trade generally gets higher marks for customer service than Robinhood. Here’s a breakdown:

ETrade:

  • Offers multiple contact methods: phone, online chat, email, and an FAQ section.
  • Known for having more easily available phone support.

Robinhood:

  • In the past, it offered limited options like email and an FAQ.
  • Recently added 24/7 phone support, but it might be newer and potentially have growing challenges.

Here’s a quick way to decide:

  • Choose E*Trade if:
    • You want a wider range of investment options.
    • You value advanced research and charting tools.
    • You need access to customer support.
  • Choose Robinhood if:
    • You prioritize low fees and a simple interface.
    • You primarily trade stocks and ETFs.
    • You prefer a mobile-first experience.

FAQs

No, both E*TRADE and Robinhood offer commission-free stock and ETF trades.

  • Both offer taxable brokerage accounts, traditional IRAs, and Roth IRAs.
  • E*TRADE offers a wider selection including checking, savings, and credit card accounts, while Robinhood offers a margin account with a fee for premium margin rates (Robinhood Gold).

No, both E*TRADE and Robinhood have no account minimums.

  • ETRADE offers a web platform, a downloadable desktop platform (Power ETRADE), and mobile apps.
  • Robinhood offers a web platform and mobile apps.

E*Trade offers a wider variety of research tools, including access to free proprietary and third-party research reports. Robinhood’s research is limited, with some available for a fee in their Gold subscription.

Robinhood is known for its simple and easy-to-use mobile app. E*Trade offers a wider range of features and a more complex platform, but also provides a mobile app.

Conclusion 

In conclusion, both ETrade and Robinhood are commission-free stock and ETF trading platforms, but they serve different investors. ETrade is a better choice for experienced investors who want a more extensive range of investment options, in-depth research tools, and educational resources. Robinhood, on the other hand, shines with its user-friendly interface, fractional shares, and cryptocurrency trading, making it ideal for beginners who prioritize low costs and mobile-first investing.

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