Robinhood and E-TRADE all offer different ways to build a portfolio of investments. E-TRADE was one of the first online brokerages, and Robinhood is the first of a new wave of online brokers that let you trade stocks for free. You can decide which brokerage to use by comparing Robinhood and E-TRADE.
A quick look at Robinhood and E-TRADE
Bill Porter, a physicist and inventor, started E-TRADE in the 1980s. At the time, it was one of the first places where people could trade online. The company kept building on and improving this platform, which led to its first public offering (IPO) in 1996.
Today, E-TRADE is a part of Morgan Stanley, and it still makes online trading easy for millions of investors.
Robinhood is a newer platform for investing.
It was started in 2013 with the goal of making investing easier and more affordable for more people. The original trading platform for the brokerage was based on commission-free stock and exchange-traded funds (ETFs).
IPO trading and trading in cryptocurrencies were added later. In 2022, Robinhood announced a new feature that would let investors earn extra money by lending out their stocks.
The fees charged by Robinhood and E-TRADE
In the past few years, more brokerages have moved towards a model where traders don’t have to pay fees. Even E-TRADE and Robinhood follow this rule.
Robinhood and E-TRADE both let you trade U.S. stocks, ETFs, and options with no trading fees. Robinhood, on the other hand, doesn’t charge any trading fees at all.
At both Robinhood and E-TRADE, there are fees for trading options. Each contract for options costs $0.65 at both brokerages. At E-TRADE, if you make 30 or more trades per quarter, that goes down to $0.50 per contract. E-TRADE doesn’t charge anything for online trades of U.S.
Treasury auction bonds or U.S. Treasury secondary trades. However, online secondary trades cost $1. At Fidelity, trades with a broker cost $19.95 and at E-TRADE, they cost $20.
You won’t have to pay anything to buy or sell No Transaction Fee funds that aren’t from Fidelity. If you want to get your money back after less than 60 days, you’ll have to pay $49.95. For Transaction Fee funds that aren’t from Fidelity, the fees are set up in the opposite way.
E-TRADE doesn’t charge anything for funds with no fees or loads, but it does charge $19.99 for funds with fees. Mutual funds with no load and no transaction fees also have an early redemption fee of $49.99.
Fund expense ratios haven’t been included in the costs we’ve talked about so far. There are a lot of funds with low or no expense ratios to choose from at Fidelity. Both E-TRADE and Robinhood offer a variety of low-cost fund choices.
If you choose a managed portfolio with either Robinhood and E-TRADE, you will also pay a different fee. You’ll have to pay an advisory fee based on how much money you have under management. The annual advisory fee goes down at both brokerages as your balance goes up.
What Services and Features Do Robinhood and E-TRADE Offer?
Morgan Stanley is the bank that E-TRADE uses to offer brokerage accounts, IRAs, IRAs for minors, small business retirement accounts, and bank accounts.
If you want to automate your investment strategy without having to open a separate account with a robo-advisor, you can also use core portfolios or managed portfolios.
Robinhood’s business model is based on brokerage accounts, but the company said in early 2022 that it would start supporting IRAs and pensions. You only need $1 to get started with Robinhood if you want to open a brokerage account.
How to Use Robinhood and E-TRADE Online and on Mobile
You can invest with Robinhood and E-TRADE online or through an app on your phone. When it comes to using the E-TRADE website, it’s easy to get around and find information about different investment accounts and products.
On the other hand, Robinhood’s website is a bit simpler because it has fewer account options. But that can be good for a beginner investor who doesn’t want to get too much information.
The app from E-TRADE gets 4 stars, while Robinhood gets 3.9 stars. According to reviews of the Robinhood app, investors find it easy to use overall, but they complain that it doesn’t have some features and functions that other apps do.
Who Should Use E-TRADE, Robinhood, or Fidelity?
Robinhood might be a good choice for people who are just starting out as investors or who only want to trade stocks and cryptocurrencies.
Its no-fee model is appealing to people who are trying to build wealth on a tight budget and don’t want to pay expensive commissions like other brokerages do.
Robinhood and E-TRADE could be a good choice for both new and more experienced investors who want to trade stocks without paying any fees but also want a wider range of investments to choose from.
The E-TRADE platform has a good reputation for meeting investors’ needs, and the fact that automated portfolios can be set up may be interesting to people who are thinking about using a robo-advisor.
If you’re not sure whether to use Robinhood and E-TRADE a good place to start is to look at how they’re the same and how they’re different.
Each platform has made a name for itself as a leader in the world of investing, and they all make it easier to trade without paying fees. Taking a close look at your investment goals and needs can help you decide which brokerage to use.