When Robinhood, a mobile-only brokerage, introduced new, ground-breaking capabilities in late 2014, many investors rushed to it since they had previously found traditional online brokerages frightening. These youthful stock market investors were drawn to Robinhood by its user-friendly smartphone app and commission-free trading.
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| 10 Online Brokers That Are the Best Alternatives to Robinhood |
Robinhood made it easier for investors to get started investing by not requiring minimum account balances. The limitations of many investment platforms, such as account minimums and high trading costs, were no longer in place. With minimal initial investment, young people might trade equities and cryptocurrencies on their phones.
Robinhood Troubles
With the viral stock rallies that swept the market during the COVID-19 outbreak, things started to change for Robinhood. Although the commission-free trading program attracted millions of new investors, many felt left out when Robinhood limited trading in joke stocks.
Many of these people believed that investing might become a widespread movement and felt misled by Robinhood's response.
Due to Robinhood's $3.69 billion loss in 2021, many investors started looking for alternatives. Robinhood has also assessed a $70 million punishment by FINRA for deceiving clients and causing system breakdowns that hurt investors. Many said that the business failed to adequately educate its customers.
The way that Robinhood handled these meme stock surges infuriated some of its detractors. They believed that Robinhood encouraged new investors to approach investing like a game by misleading them about margin trading.
The corporation made investments in more customer support representatives and instructional materials for investors as a result. However, many individuals believe that Robinhood should have made these changes far earlier, and many are leaving the well-known investment app. There are other options than Robinhood, which is still a fantastic choice for novice investors.
The best Robinhood substitutes
As demand for websites like Robinhood has grown over time, a number of rivals have appeared. If you're looking for an online broker similar to Robinhood, here are the top 10 options to take into account.
| Robinhood | Fidelity | Charles Schwab | Public | M1 Finance | Q.ai | Ally Invest | Webull | Stash | Stockpile | SoFi Invest | |
| Monthly fees? | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $1-$9 | $0 | $0 |
| Trading fees? | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0.99-$3.99 plus a 3% debit/credit card processing fee | $0 for stocks and ETFs. 1.25% for crypto trades. |
| Fractional shares? | ✓ | ✓ | ✓ | ✓ | ✓ | Y | X | X | ✓ | ✓ | ✓ |
| Stocks? | ✓ | ✓ | ✓ | ✓ | ✓ | Y | Y | ✓ | ✓ | ✓ | ✓ |
| Funds? | ✓ | ✓ | ✓ | ✓ | ✓ | Y | Y | ✓ | ✓ | ✓ | ✓ |
| Crypto? | ✓ | X | X | X | X | X | X | ✓ | X | X | ✓ |
| Margin accounts? | ✓ | X | ✓ | X | X | Y | Y | ✓ | X | X | X |
| Options? | ✓ | X | ✓ | X | X | Y | Y | ✓ | X | X | X |
1) Fidelity
With more than 34.4 million individual brokerage accounts, Fidelity is one of the biggest brokerages in the US. Although Robinhood is frequently recommended as the best investing app for beginners, Fidelity offers a variety of alternatives, including IRA accounts and research tools, which Robinhood does not.
In addition, Fidelity offers no account minimum requirements, zero commission fees for stocks and ETFs, and a highly regarded mobile app. Fidelity charges a $0.65 contract fee for options, in contrast to Robinhood.
With over 10,000 mutual funds and its Fidelity Go service (which has no fees for account balances under $10,000), Fidelity offers a wide range of investing possibilities.
Fidelity has one disadvantage in that it isn't as easy to use as Robinhood, making it first a little more frightening. Since the brokerage forbids trading in cryptocurrencies, you won't find any coin here either.
However, according to a recent Wall Street Journal story, Fidelity is considering making cryptocurrencies available. Earlier this year, the business said corporate clients may include bitcoin into their 401(k) plans. A crypto sector ETF is currently available for anyone to buy.
2) Charles Schwab
You can manage all of your finances with Charles Schwab with only one login, making it a possible Robinhood substitute. Major stockbroker Charles Schwab has made efforts to stay current with fintech, update its mobile app, and provide fractional shares. In addition, Charles Schwab provides no-commission trading in stocks and ETFs and there is no opening balance needed to begin investing.
The platform doesn't support trading in cryptocurrencies, and Charles Schwab levies an option fee of $0.65 per contract, similar to Fidelity.
Investor education facilities provided by Charles Schwab, which aid customers in learning more about both general investing and particular equities, help the company stand out. The business provides access to conventional financial advisors as well as 24/7 customer service choices.
Although it may not appear like younger investors are thinking about retirement, Charles Schwab is the market leader in that area. If you're considering life after a profession, as Robinhood just provides a taxable brokerage account, go into Charles Schwab for the range of individual retirement accounts.
3) Public
2019 saw the introduction of Public, and since then, the business has received more than $300 million from backers like Tony Hawk and Will Smith.
In offering free stock transactions, a great mobile app, fractional shares, and cryptocurrency trading, Public is comparable to Robinhood. However, neither service is well-known for its automated investing solutions or Robo-advisors.
The social trading platform that Public offers customers allows them to learn from other investors and professionals, making it unique. In reality, Public is intended to be a social investment platform where users may interact with one another through community groups and portfolio following. This sense of community has aided the Public's positioning as a Robinhood substitute.
The Public's non-participation in the contentious Payment for Order Flow program is their most distinctive quality (PFOF). Instead, Public offers an alternative commission structure and a tipping option in the app. This organizational structure promotes greater openness and shows that the business acts in the interests of its customers.
The public does have a markup between 1-2% for cryptocurrency exchanges, unlike Robinhood, so you will ultimately have less bitcoin for each transaction.
For first-time buyers on a tight budget seeking a product with a built-in community, Public is ideal. We live in a social environment, after all, and we want to feel supported in our financial decisions.
4) M1 Finance
With conventional investing services and a Robo-advisor component, M1 Finance provides a hybrid approach. As the firm promotes personalized portfolios and automatic contributions, M1 Finance's hybrid platform is all about giving you complete control and automation over your money.
In addition to providing full banking services, M1 Finance is more than simply a mobile brokerage. The M1 Owner's Rewards Card offers cash-back rewards of up to 10%, and its checking account offers a staggering annual percentage yield (APY) of 2.5%.
Anyone wishing to leverage their investment for more capacity or to acquire extra capital may utilize M1 Borrow services to employ margin loans. At a 6.5% interest rate, you can borrow up to 40% of your portfolio's value.
To provide consumers control over where their money is invested, M1 Finance employs a special pie chart method for robo-advisors. You may make your own pie using the stocks and ETFs of your choosing, or you can select one of the readymade expert pies, thanks to the tools and analysis provided by M1. Your contributions can be automated once you've made your choice of pie.
Keep in mind that M1 Finance does not provide instantaneous transactions like Robinhood, making it inappropriate for day traders or investors wishing to buy and sell stocks often. The platform works well for long-term investors who are just starting out in the world of investing.
If you want to invest in more well-known firms but don't have a lot of money, you may buy fractional shares, much like Robinhood. You have alternatives at M1 Finance to meet your investing requirements, including brokerage, cryptocurrency, and retirement accounts.
5) Q.ai
You may utilize artificial intelligence to handle the task for you if you want to remove the element of guessing from investing. The innovative investing kits from Q.ai manage your money with AI.
The investing kits from Q.ai are individually created using a mix of equities and ETFs. Themes for these kits include energy, cutting-edge technology, and even vices. Make a deposit, select your investment package, and then let AI handle the rest.
There are four types of investment kits:
- Options like cutting-edge technology and world trends are offered in Foundation Kits.
- Limited edition Kits based on current events, such as Bitcoin's breakout or inflation protection.
- Specialty Kits include clean-tech and cryptocurrency.
- The Community Kit invests in US and international equities as well as ETFs using data and analysis from Forbes.
For those seeking a hands-off approach to investing, this Robinhood substitute is perfect. The fact that Q.ai is totally free and allows you to manage your risks amid market turbulence makes it stand out from the competition. Additionally, Q.ai refreshes its kits on a weekly basis so you can keep up with trends.
Artificial intelligence (AI)-powered investing uses technology to manage every aspect of your investment decisions, including risk evaluation and kit correlation analysis. Your portfolio may be tailored to fit your investing preferences and risk tolerance, and Q.ai offers portfolio protection to anticipate potential dangers in advance. Additionally, there are no fees or charges associated with investing.
6) Ally Invest
Because Ally Invest is both a full-featured brokerage and a bank, you can manage all of your financial transactions on one platform, making it a strong Robinhood substitute. There is no initial deposit requirement and no commissions on stocks or ETFs with Ally Invest. For trading in options, the business levies a $0.50 per contract fee.
In contrast to Robinhood, Ally Invest is more of a full-featured broker with access to all possible account types. You may create a retirement account, purchase mutual funds, and open a bank account. In addition, Ally Invest offers a Robo-advisor service for consumers looking to automate their investment process.
Contrary to Robinhood, Ally does not provide bitcoin trading on its site despite having a superior variety of mutual funds (over 12,000 alternatives).
Those seeking an investment platform can choose from the following choices from Ally:
- Self-directed trading: allows you to manage your portfolio while paying no fees to buy stocks or ETFs. There is no account minimum to get started.
- Robo-portfolios: Invest $100 in a portfolio managed by a robo-advisor. Core, income, socially responsible, and tax optimized are the four alternatives.
- Wealth management: When you have $100,000 to invest, schedule a meeting for a personalised portfolio.
7) Webull
Another stock trading platform with no account minimums and commission-free transactions is Webull. Webull offers free bitcoin and options trading as well as a user-friendly mobile app for investors.
Webull is intended for advanced investors searching for professional tools, whereas Robinhood targets novice investors. You may evaluate your investing alternatives by looking at technical trading data thanks to Webull's powerful screener. Webull is said to be one of the greatest free stock research tools by many investors.
Investors may learn more about the stock market and investing on this site. Most importantly, Webull's investing simulator allows you to make investments to make sure you're comfortable with a choice without risking real money. Investors occasionally need to be mindful of the hazards associated with making stock market investments based solely on speculation, as the meme stock rallies have demonstrated.
Webull is the ideal choice for people who are new to investing and want to explore their possibilities because it enables you to follow stocks with personalized notifications and updates.
Webull, which is more geared toward intermediate investors than Robinhood, allows for short selling provided you have a margin account, which is a key distinction between the two platforms.
8) Stash
Instead of senior stock market experts trying to undertake difficult things like day trading or options contracts, Stash is more aimed toward newbie investors who want to hold long-term investments. You may invest in stocks and ETFs through it, but don't expect to go berserk—there are just 250 choices. It's more suited for folks searching for a straightforward experience because you will receive some aid in deciding which options are ideal for you.
Additionally, it provides a special feature that we haven't seen in other Robinhood alternatives: a debit card that gives back stock in the form of 0.125% to 5.000% of the value of the large firms you purchase from when you use it. Check out our thorough Stash review for additional details.
9) Stockpile
The stockpile was one of the first investment firms to provide fractional shares of equities, which are currently all the rage. Stockpile is advertised primarily as a gift card service, even though you can use it for the majority of beginner investor needs.
For fascinating corporations like Disney, or yes, even GameStop, you can purchase gift cards and "gift" fractions of shares and give them to friends and relatives. It's a useful strategy to spark young investors' interest in the stock market. Read our Stockpile review to find out more.
10) SoFi Invest
SoFi Invest provides two alternative investment options: Automated Investing, which functions more like a robo-advisor, and Active Investing, for those who prefer to do everything themselves.
Inexperienced investors who wish to dabble in buying and selling but aren't yet serious investors might consider active investing. Fractional shares, for instance, are only exchanged once every day, during which time their price may vary. With automatic investing, SoFi Invest assists you in developing and carrying out an automated investment strategy based on your objectives.
The Best Robinhood Alternatives: Concluding Remarks
Here it is: our ranking of the top Robinhood substitutes. As you can see, established brokerages are now competitive with the features that first drew new investors to Robinhood. Nowadays, the majority of trading platforms compete for novice investors by providing commission-free trading, simple mobile apps, and the option to buy fractional shares.
After the Gamestop stock craze in early 2021, many Robinhood customers will start seeking for alternatives. Several trading platforms may stand out for their high-quality educational investing materials.
As an investor, your demands could vary, therefore it's critical to compare the advantages and disadvantages of several trading platforms until you discover the one that best suits your present financial circumstances.
