Robinhood Alternatives – Forbes Advisor - Investing - Forbes
Robinhood is a popular brokerage app for investors who want to trade cryptocurrency and conventional assets. It's built a strong reputation for ease of use, but it has a few drawbacks.
Many investors may be better served by other platforms that are tailored to their preferred trading strategies. Let's take a look at Robinhood alternatives for both crypto investors and conventional traders.
Robinhood Profile
- Forbes Advisor Rating: 3.0 stars
- Trading Commissions: $0 for stocks, ETFs and options
- Account Minimum: $0
Launched in 2013, Robinhood made a name for itself as a no-fee online broker. The platform's commission-free approach proved so popular that it changed the entire investing landscape. Today, few online brokers charge commissions for basic trading.
Robinhood provides stock, ETF and options trading. Plus, customers can use margin on the platform to leverage their purchasing power. Traders can set up recurring investments and purchase fractional shares. They can also get access to new companies by investing in initial public offerings. Robinhood is even launching a individual retirement account (IRA) option that features a 1% match for contributions.
The platform offers 24/7 customer support and a modest selection of educational materials.
Robinhood offers commission-free trading in 18 cryptocurrencies. Although this doesn't come anywhere near capturing the range of the entire crypto universe, Robinhood supports the most well-known coins, which should satisfy the needs of crypto beginners.
The platform's ease of use presents drawbacks, and critics have accused Robinhood of "gamifying" investing. This critique became common during the GameStop saga of 2021.
Robinhood
Account Minimum
$0
Trading Commissions
$0 for stocks, ETFs and options
Account Minimum
$0
Trading Commissions
$0 for stocks, ETFs and options
- No account minimum, no monthly fee
- Very easy to use
- Allows cryptocurrency and fractional share trading
- Instant access to deposited cash
- App design may encourage active trading, which is not appropriate for most investors
- Delayed price quotes
- Limited education and research tools
- Accepts payment for order flow
- No access to mutual funds, bonds or IRAs
Robinhood Alternatives: Online Brokers
For traders interested in traditional investment vehicles such as stocks, ETFs and derivatives, the world of online brokers offers Robinhood alternatives that provide more complete investing features.
Charles Schwab
- Forbes Advisor Rating: 4.3
- Trading Commissions: $0 for stocks, ETFs and options
- Account Minimum: $0
Charles Schwab has an impressive array of offerings for investors. The platform is rated the best for customer service in our best online broker platforms and in our best online broker platforms for beginners.
Schwab offers 24/7 phone support to its customers, as well as email and in-person help at physical branches. The company has robust research and educational offerings, including podcasts, magazines and live events.
This is in stark contrast to Robinhood. Although Robinhood offers phone support and text chat, phone support can be hard to reach. There's no displayed customer service number, and users need to be signed into their accounts to receive a callback.
Like most online brokers in the post-Robinhood era, Schwab charges no commissions for stock, ETF and option trades. There are contract fees for options as well as additional fees for more advanced trades like commodities futures and over the counter (OTC) equities.
Robinhood does not support futures and only trades approximately 650 American Depository Receipts (ADRs) over the counter.
Fidelity Investments
- Forbes Advisor Rating: 4.4
- Trading Commissions: $0 for stocks, ETFs and options
- Account Minimum: $0
Our best overall online broker platform is Fidelity Investments. Fidelity offers an excellent platform for long-term investors and active traders. In addition, the platform is quite beginner-friendly.
Fidelity offers exceptionally low fees, fractional share trading, and relatively fast order execution speeds, which can help active traders lock in the best prices for their trades.
The Fidelity platform has excellent educational and research materials for seasoned traders and beginning investors alike. This is in contrast to Robinhood where educational materials exist but remain slim.
With an array of managed portfolios and coaching from financial advisors, Fidelity offers a robust support system, far beyond anything Robinhood has the ability to provide.
Like Schwab, Fidelity offers nearly every type of account an individual may need, including Solo 401(k)s for the self-employed and 529 accounts for college savings. Robinhood is only now branching into the world of traditional retirement offerings with its IRA offering.
Robinhood Alternatives: Crypto Exchanges
Robinhood's cryptocurrency features are limited compared to most exchanges. Investors who are looking for a deeper dive into the cryptosphere may want to check out our listing of the best crypto exchanges.
Kraken
- Forbes Advisor Rating: 4.6
- Fees: 1.5% flat fee / 0.9% flat fee for stablecoins
- Cryptocurrencies: 120+
Kraken earns the title of our best overall crypto exchange platform.
Although its "instant buy" program charges users a flat fee of 1.5% for cryptocurrencies and 0.9% for stablecoins, users can easily lower those costs by trading on Kraken Pro.
Small volume trades on Kraken Pro can run as little as 0.16% for makers and 0.26% for takers, which is comparable to other exchanges. Some users may find these fees worth it compared to Robinhood when taking Kraken's more robust offerings into consideration.
Kraken is one of the few U.S. platforms that provides advanced options like margin trading. With margin, customers use leverage to fund their purchases. Robinhood does not offer this feature for cryptocurrency.
Kraken also offers staking, which Robinhood lacks. Staking is a great way for crypto traders to generate passive income on their coins.
Finally, the site contains a wide range of cryptocurrency educational materials, far beyond Robinhood's offerings, and the company has excellent customer service from its chatbot and phone support.
Gemini
- Forbes Advisor Rating: 4.5
- Fees: 0.2% maker fee / 0.4% taker fee
- Cryptocurrencies: 120+
Our top crypto exchange for beginners, Gemini, is another good choice for crypto traders.
Gemini offers trading in a similar amount of cryptocurrencies as industry-leader Kraken, more than 120 different coins. This is significantly more than the 18 coins available on Robinhood.
Like Robinhood, Gemini has an easy-to-use interface. However, Gemini's educational materials are far superior.
Starting at 0.2% for makers and 0.4% for takers, Gemini's fees are a little higher than other crypto platforms, but Gemini makes up for this with its convenience and ease of use.
Gemini Staking also offers plenty of opportunities for crypto traders to earn passive income on the coins they're already holding.
The only real disadvantage to the platform are the convoluted, higher-than-average fee structures, which could be difficult to navigate.
Should You Choose Robinhood or an Alternative?
Since it offers the features of both an online broker and a crypto exchange, Robinhood could be a one-stop shop for some investors. However, despite its advantages, the platform has shortcomings.
Who Should Choose Robinhood
The Robinhood app features a user-friendly interface that is intuitive and straightforward. Combine this with the platform's $0 fees, and users with little to no experience can start trading whenever they'd like.
The cryptocurrency trading features of Robinhood benefit from this simplicity as well, which makes it easy for users to get started with crypto. The platform also supports its own crypto wallet, which is an important part of safe coin storage for crypto investors.
Who Should Choose an Alternative
More advanced traders might not find the tools and products they want on Robinhood, such as commodities futures trading and OTC equities. They also can't short stocks on the Robinhood platform. Short selling is when trader's aim to benefit from the decline in an asset's price.
On the other hand, beginning traders may want more than Robinhood's very basic educational or research materials. In addition, the company's customer support options are lacking. This can be detrimental for beginning users.
Investing can be difficult to grasp. Success requires a great deal of knowledge. Robinhood may not provide users with the tools they need.
How to Choose: Online Broker vs. Crypto Exchange
There are many factors stock and crypto investors should take into consideration when choosing platforms.
With cryptocurrencies, the first thing a trader may want to look at are the platform's fees. For example, fees can vary as significantly as from $0 in the case of Robinhood to 1.5% for Kraken's instant buy program.
Since most online brokers now offer $0 commissions on simple trades, fees are no longer a consideration for those interested in trading more traditional assets.
Instead, more advanced investors will want to make sure the platform they're choosing offers the tools they want. These can be features such as commodities and OTC trading in the case of brokers or staking in the case of crypto.
A platform's educational and support offerings are also something to take into consideration. Robinhood is lacking in both these departments. Those who want more robust offerings here might be better served looking elsewhere.
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