While researching for an investment broker, I was amazed to find that most of the top brokerages charge $0 commissions. The account minimums required too are almost nil.
In the era of $0 commissions, you may get stuck in choosing one of the best securities firms for your investments. The discounts & offerings from brokers are very tempting and you may find it difficult to make up your mind.
If you are in a fix between “E*Trade and Robinhood”, then this article will be of great help as you will be in a position to compare both the brokerages side by side.
If you are in a hurry, here is a brief comparison to help you decide better.
Brief Comparison E*Trade vs Robinhood
| Particulars | E*Trade | Robinhood |
| Broker | Full service | Limited offerings |
| Trading/ Investing Assets | Stocks, ETFs, mutual funds, futures, bonds, and options. Participate in initial public offerings (IPOs) and U.S.Treasury auctions | Stocks, ETFs, options, cryptocurrencies and fractional shares |
| Fees/ Commission | E*Trade | Robinhood |
| Account Minimum | $0 | $0 |
| On Stock, ETFs and Option trades | $0 | $0 |
| Option contract fees | $0.50-$0.65 per contract, depending on trading volume | $0 |
| Futures contract commission | $1.50 per contract, per side | N.A. |
| On Mutual Fund | $19.99 | N.A |
| Margin Amount | E*Trade Margin Rates | Robinhood Margin Rates |
| Lowest margin Less than $10,000 | 8.95% | 2.5% |
| Highest margin Above $1,000,000 | 5.45% | Highest margin amount not specified 2.5% |
| Account Fees | E*Trade | Robinhood |
| International Wire fee | $25 | $0 |
| Domestic Wire fee | $25 | $0 |
| Paper confirmation fee | $0 | $2 |
| Paper Statement fee | $2 | $5 |
| Trading Platforms | Power E*TRADE app Power E*TRADE Platform (web) | Mobile trading Web-based trading |
| Robo Advisor | Yes, a low fee Robo-advisor | N.A. |
| Research Offerings | In house reports, expert analysis, stock recommendations and investment ideas | 1700 Morningstar premium reports only with Gold Plan |
| Customer Support | Live chat Phone contact |
If you want to go into details of both the established brokerages, continue reading the full review.
E*Trade Review
E*Trade brokerage company, founded in 1982, helps you with its broad range of investment products and services. One can invest in assets like; stocks, ETFs, mutual funds, futures, bonds, and options.
If you are looking to participate in initial public offerings (IPOs) and U.S. Treasury Auctions then E*Trade is a great option for you.
The full-service brokerage is based out of Arlington, VA and listed on Nasdaq. Retail investors can reach E*Trade through email, phone, live chat and 30 branches across the U.S.
The USP of E*Trade is:
- $0 Trades
- Linked E*Trade Savings Bank
- Power E*Trade trading platform
- Different account types catering to needs
Investment Support
When you open an account with E*Trade, you get access to low-fee premium E*TRADE Savings Bank account. The savings account is fully integrated with your E*Trade securities account.
The savings account carries 0.05% APY with no minimum monthly account fee. One can view investing and savings accounts in the same view.
Max-Rate and E*Trade are the other checking account offered by E*Trade Bank.
When it comes to trading technology, E*Trade has one of the best platforms, i.e. Power E*Trade.
Using Power E*Trade, one can formulate trading strategies with 100+ technical studies and 30+ drawing tools.
You have on your disposal interactive charts, technical pattern recognition tool, snapshot and spectral analysis facility when you trade.
The best part is that you can practice paper trading on the E*Trade platform before you go live.
To help you trade on the go, the Power E*Trade platform is also available in the form of a mobile app.
The Power E*Trade app is for active traders that lets you quickly trade stocks, ETFs, futures and complex options on a single trade ticket.
Similar to the platform, you can spot potential trades, view interactive charts and access technical studies on the app too.
The other mobile app is the E*Trade Mobile app. The app helps you:
- Invest in stocks, ETF, options and mutual funds
- Manage cash, transfer money
- Bill pay
- View Bloomberg TV and access research
Coming to the account types E*Trade offers plenty to choose from, for all types of investors be it an individual trader, family, non-profit or a trustee.
The account types are as under:
- Brokerage Account
- Retirement IRA accounts – Traditional, Roth & Rollover
- Managed Portfolios – Core, Blend and Dedicated
- Retirement Account for small businesses
- Bank Accounts – Premium Savings, Max-Rate, E*Trade Checking Account
However, you can trade in securities only on brokerage and managed portfolio accounts.
The brokerage account is for individual active traders with zero minimums and $0 fees on stock, ETF investments.
Whereas, managed portfolio accounts come with a personalized investment, build along with an E*Trade financial consultant’s advisory.
The managed portfolio accounts require account minimums ranging from $500 to $250,000.
Minimum Investment
The E*Trade brokerage account can be opened with a zero minimum.
On the other hand, managed portfolio accounts require the following minimums:
| Managed Portfolio Account | Minimums |
| Core Portfolio Account | $500 |
| Blend Portfolio Account | $25,000 |
| Dedicated Portfolio Account | $150,000 |
| Fixed Income Portfolio Account | $250,000 |
Fee & Charges
| Particulars | Fees & Charges |
| Stock and Option Trades | For 0-29 trades per qtr – $0 For 30+ trades per qtr – $0 |
| Option contract fees | For 0-29 trades per qtr – $0.65 For 30+ trades per qtr – $0.50 |
| Broker assisted trades | $25 |
| ETF | For 0-29 trades per qtr – $0 For 30+ trades per qtr – $0 |
| Bonds (online secondary trades) | $1 per bond (minimum $10, maximum $250) |
| Futures contract commission | $1.50 per contract, per side |
| Commission for Bitcoin futures | $2.50 per contract, per side |
| No load, no transaction fee Mutual Funds | $0 |
| Transaction fee fund | $19.99 |
| Index option fee | Up to $0.51 per contract depending on the index |
Margin Amount and margin rates charged at E*Trade is under:
| Margin Amount | E*Trade Margin Rates |
| Less than $10,000 | 8.95% |
| $10,000 to $24,999.99 | 8.70% |
| $25,000 to $49,999.99 | 8.45% |
| $50,000 to $99,999.99 | 7.95% |
| $100,000 to $249,999.99 | 7.45% |
| $250,000 to $499,999.99 | 6.95% |
| $500,000 to $999,999.99 | 6.45% |
| Above $1,000,000 | 5.45% |
What I Liked About E*Trade
- $0 fee for stock, options and ETF
- $0 minimum brokerage account
- Wide range of products & accounts
- Power E*Trade platform and 2 mobile apps
- Linked E*Trade Savings Bank Account
What I Didn’t Like About E*Trade
- $49.99 early redemption fee for mutual funds
- $25 charges for broker-assisted trades
- $25 for outgoing wire transfers
Best For
E*Trade is best for investors looking for multiple services that include trading, banking, investing (bonds, ETF, retirement & mutual funds) along with research advisory.
Check out – E*Trade Vs Fidelity
Robinhood Review
Robinhood was founded in 2013 by Baiju Bhatt, Vladimir Tenev. The California based brokerage house has grown to 11 million+ traders.
Robinhood is known in the brokerage industry for its unique commission-free trading across products. One can trade stocks, ETFs and options with zero commission fees. Robinhood does not even charge a contract fee on options.
The best and unique offering at Robinhood is a full suite of crypto products that you do not find even with top diversified full-service brokerages.
The present list of tradable crypto include:
- Bitcoin
- Bitcoin Cash
- Bitcoin SV
- Dogecoin
- Ethereum
- Ethereum Classic
- Litecoin
You can trade all of them at zero brokerage charges. The crypto is available to traders in 46 states and Washington DC.
However, the crypto trades are collared up to 1% for buys, and 5% for sells.
This effectively means that your order won’t be executed if the price of the cryptocurrency moves more than 5% while selling or more than 1% (higher than its last traded price) when you placed a buy order.
The USP of Robinhood is:
- Commission-free trading
- Mobile trading
- Availability of Crypto products
- Trading in fractional shares
However, the investment products are limited and it does not offer investment in futures, mutual funds and bonds or IRA accounts.
Apart from that, Robinhood allows four day trades within five days for accounts valued less than $25,000. This means in order to trade freely you need to have an account balance of $25,000 or above.
Investment Support
When you open a brokerage account, you get access to the cash management service of Robinhood.
One can use both (brokerage + cash management) service in tandem for spending, investing and savings.
The savings under cash management yields 0.30% APY. Additionally, you get free:
- A Robinhood debit card by Sutton Bank
- An ACH account number and routing number
- Lost and stolen replacement cards
Moving on to the trading platform
Robinhood is primarily focused on the concept of mobile trading. So, you get access to a well-designed and developed Robinhood compatible with iOS and Android smartphones.
- For iOS devices, you need to have running iOS 11
- Android devices need 6.0 Marshmallow OS and above
Apart from that, Robinhood offers web trading support on most browsers like Chrome, Firefox, Safari and Edge. You can access the web platform both on Mac and PC.
Next, let us explore the account types.
Robinhood offers three account types:
| Account Types | Particulars |
| Robinhood Instant | Instant is the very first account that you get when you sign up. Access to instant deposit (up to $1000) Extended trading hours |
| Robinhood Gold | Just like the Instant account but with More buying power Larger instant deposits Research reports Access to margins Charged at $5 per month Need to have $2000 account balance to use margins |
| Robinhood Cash | Basic account where you can trade extended hours. But do not have access to Instant deposits or Instant settlements |
Robinhood gives you the facility to downgrade from Gold Account to Robinhood Instant or Cash Account anytime.
Minimum Investment
Like E*Trade, opening an account with Robinhood too does not require account minimums. You can trade the amount you keep in your brokerage account.
Fee & Charges
Investing with Robinhood is commission-free, the fee details are under:
| Particulars | Fees & Charges |
| Stock and Option Trades | $0 |
| Option contract fees | $0 |
| ETF | $0 |
| Crypto trades | $0 |
Robinhood offers margin only on the Gold account. In order to use margin, you need to have at least $2000 in your brokerage account.
The margin and other details related to Gold account are under;
| Margin Amount | Margin fee/ rate |
| Price for 30 days Includes $1000 of margin | $5 per month |
| Margin over $1000 | 2.5% interest rate |
The $1000 margin comes at no additional cost for 30 days, you only need to pay $5 for the Gold account. In case, if you use margin above $1000, then the excess margin is charged at 2.5%.
Robinhood does not disclose the upper margin amount available.
What I Liked About Robinhood
- Commission-free trading across available products
- Lets you invest in Crypto & Fractional shares
- Cash management services
What I Didn’t Like About Robinhood
- Limited investment products (stocks, options, ETFs and crypto)
- Only email support
- $2000 balance for using margin
- 4 day trades for account balance less than $25,000
Best For
Robinhood is best for self-directed individuals who need minimal resources (like research, advisory & support) or managed services.
Also read – Robinhood Vs Vanguard
Common Feature Between E*Trade and Robinhood
Both E*Trade and Robinhood accounts come with SIPC (Securities Investor Protection Corporation) coverage.
The cover protects investor’s funds from broker failure. That is up to $500,000 in securities and cash, including a maximum of $250,000 in cash.
The other similarities between both the brokers are under:
| Particulars | E*Trade | Robinhood |
| Account Minimum | $0 | $0 |
| Trading Fees | ||
| On Stock | $0 | $0 |
| On ETF | $0 | $0 |
| Option trades | $0 | $0 |
Also read – How to invest in index funds
Difference Between E*Trade and Robinhood
| Particulars | E*Trade | Robinhood |
| Broker | Full service | Limited offerings |
| Trading/ Investing Assets | Stocks, ETFs, mutual funds, futures, bonds, and options Participate in initial public offerings (IPOs) and U.S.Treasury auctions | Stocks, ETFs, options, cryptocurrencies and Fractional shares |
| Based out of | Virginia | California |
| Branch Offices | 30 local branch office | None |
| Account Types | Both taxable and traditional IRA and Roth IRA | Taxable Accounts |
| Fees/ Commission | E*Trade | Robinhood |
| Option contract fees | $0.50-$0.65 per contract, depending on trading volume | $0 |
| Futures contract commission | $1.50 per contract, per side | N.A. |
| On Mutual Fund | $19.99 | N.A |
| Broker Assisted Trades | $25 | N.A |
| Margin Amount | E*Trade Margin Rates | Robinhood Margin Rates |
| Less than $10,000 | 8.95% | 2.5% |
| $10,000 to $24,999.99 | 8.70% | 2.5% |
| $25,000 to $49,999.99 | 8.45% | 2.5% |
| $50,000 to $99,999.99 | 7.95% | 2.5% |
| $100,000 to $249,999.99 | 7.45% | 2.5% |
| $250,000 to $499,999.99 | 6.95% | 2.5% |
| $500,000 to $999,999.99 | 6.45% | 2.5% |
| Above $1,000,000 | 5.45% | 2.5% |
| Account Fees | E*Trade | Robinhood |
| International Wire fee | $25 | $0 |
| Domestic Wire fee | $25 | $0 |
| Paper confirmation fee | $0 | $2 |
| Paper Statement fee | $2 | $5 |
| Trading Platforms | Power E*TRADE app Power E*TRADE Platform (web) | Mobile trading Web-based trading |
| Robo Advisor | Yes, a low fee Robo-advisor | N.A. |
| Research Offerings | In house reports, expert analysis, stock recommendations and investment ideas | 1700 Morningstar premium reports only with Gold Plan |
| Trader education | Lots of articles, videos, and webinars | Few resources |
| Customer Support | Live chat Phone contact |
You may also like to read – Charles Schwab Vs Vanguard
Why You Might Prefer E*Trade
E*Trade provides holistic investment services (also bank accounts) where you can create a diversified portfolio with assets that include mutual funds, ETFs and treasury bonds.
If you require any Robo advisory or managed portfolio then E*Trade is a better option just because Robinhood does not offer them.
E*Trade gives you the option to open taxable and non-taxable accounts IRA accounts for building long term wealth.
Why You Might Prefer Robinhood
But, if your focus is on cutting trading cost or self-directed trading then Robinhood is the best pick between both the brokerages. Robinhood does not bother you with trading advisory.
Robinhood benefits include $0 option contract fees and low 2.5% margin rates on the sums borrowed.
Robinhood is one of the few brokerage houses where you can trade and invest in cryptocurrencies too.
