Robinhood and E*TRADE are well-known equity brokers, but which one should you trust for your investment portfolios?

I have conducted an in-depth review of Robinhood vs. E*TRADE to determine which broker is the better overall choice and which traders will benefit most from each.

Headquarters
United StatesUnited States
Regulators
N/ANFA
Tier 1 Regulator(s)?
Owned by Public Company?
Year Established
20131982
Execution Type(s)
Market MakerMarket Maker
Minimum Deposit
$0$0
Negative Balance Protection
N/A
Trading Platform(s)
Proprietary platformProprietary platform, Web-based
Retail Loss Rate
N/AUndisclosed
Minimum Raw Spreads
N/ANot applicable
Minimum Standard Spreads
N/AUndisclosed
Minimum Commission for Forex
N/A$1.50 per futures contract
Islamic Account
Signals
US Persons Accepted?
Managed Accounts
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Here is a snapshot of the most notable advantages of Robinhood:

  • Share dealing from $1 with an on-ramp for cryptocurrency traders on its mobile app
  • A robo-advisory service with its retirement portfolio builder
  • A stainless-steel, branded Visa debit card with 3% cashback on all transactions
  • A publicly listed US company
  • Private banking

Here is a snapshot of the most notable advantages of E*TRADE:

  • E*TRADE features superb order execution speed and excellent price improvement technology
  • The cutting-edge Power E*TRADE trading platform for active traders, including technical pattern recognition, the Earnings Move Analyzer, and risk/reward probabilities
  • A superb infrastructure for equity investors, traders, and retirement planners
  • “Core Portfolios” offering traders automated account management for a 0.30% fee
  • IPO trading for qualified clients and prebuilt portfolios

Features and Platforms

MT4
MT5
MT4/MT5 Add-Ons
N/A
cTrader
Proprietary Platform
Automated Trading
Social/Copy Trading
N/A
DOM?
Guaranteed Stop Loss
Scalping
Hedging
One-Click Trading
OCO Orders
Interest on Margin
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Available Markets

Currency Pairs
N/A
Cryptocurrencies
Commodities
Crude Oil
Gold
Metals
Equity Indices
Stocks (non-CFDs)
Bonds
N/A
ETFs
Options
Futures
Synthetics
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Both brokers offer fractional share investments, stocks, IPOs, ETFs, options, futures, and managed robo-advisories. Robinhood includes gold and select cryptocurrencies, while E*TRADE features mutual funds and bonds.

Here is why E*TRADE is a better choice for most traders:

  • E*TRADE has a well-balanced, diversified asset selection

Typical Spreads and Fees

Minimum Raw Spreads
N/ANot applicable
Minimum Standard Spreads
N/AUndisclosed
Minimum Commission for Forex
N/A$1.50 per futures contract
Deposit Fee
N/A
Withdrawal Fee
N/A
Inactivity Fee
N/A
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Robinhood and E*TRADE offer commission-free accounts, but which is cheaper?

Robinhood and E*TRADE provide commission-free equity and ETF trading. The former does not charge contract fees for options and futures trading, while the latter features volume-based options discounts. Therefore, the determination of which option is cheaper depends on the assets, as both brokers offer their own advantages.

Account Types

Account Types
Robinhood
E*TRADE
Commission-free Accounts
Yes
Yes
Commission-based Accounts
No
No
Demo Accounts
No
Yes
Islamic Accounts
No
No
Social / Copy Trading
No
No
Managed Accounts
Yes
Yes

Robinhood has a Gold account for a $5 monthly fee that offers superior trading conditions. Meanwhile E*TRADE lists 18 account types.

Are there any other noteworthy differences in the account structure between Robinhood and E*TRADE?

Here is what stands out the most:

  • E*TRADE managed accounts are available under its Core Portfolios service, which requires a minimum deposit of $500
  • E*TRADE offers banking services via Morgan Stanley Private Bank

Minimum Deposit

Deposit Snapshot
Robinhood
E*TRADE
Minimum Deposit
$0
$0
Deposit Fees
Third-party
Third-party
E-wallets
No
No
Cryptocurrencies
No
No
Localized Methods
Yes
Yes
Total Deposit Methods
2
4
Supported Deposit Currencies
USD
USD

How Difficult Is It to Deposit at Robinhood vs. E*TRADE?

While neither broker has a trader-friendly deposit infrastructure, depositing at Robinhood and E*TRADE is as simple as online banking. Robinhood and E*TRADE rely on bank-related payment processors, but Robinhood presents its branded Visa debit card with 3% cashback on all transactions, granting it an edge. Neither broker has a minimum deposit, but select services carry minimums.

Minimum Withdrawal

Withdrawal Snapshot
Robinhood
E*TRADE
Minimum Withdrawal
$0
$0
Internal Withdrawal Fees
$1 to $150 for withdrawals to external accounts
Third-party
Internal Processing Times
Three to five business days
Same-day to within one business day

Which Withdrawal Process Is Better: Robinhood or E*TRADE?

Neither Robinhood nor E*TRADE has a quality withdrawal process. Robinhood charges a withdrawal fee for withdrawals to external credit/debit cards and bank accounts and favors traders using its branded Visa debit card. E*TRADE prefers clients use banking services provided by its corporate owner, Morgan Stanley. Among bank-related options, ACH transfers are free and the fastest method.

Security and Trust

Country of the Regulator
United Kingdom, United StatesUnited States
Name of the Regulator
N/ANFA
Regulatory License Number
165998, 8-69188, 82359029106, 8-44112
Regulatory Tier
1, 11
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Which Broker Is More Secure and Trustworthy?

Robinhood is one of the pioneers of commission-free trading in the US but has a questionable operational track record, and supplements income with payment for order flow. Morgan Stanley, the corporate owner of E*TRADE, is publicly listed and a well-recognized bank. Both Robinhood and E*TRADE segregate client deposits from corporate funds and are FINRA members, but overall, E*TRADE is more trustworthy.

Robinhood versus E*TRADE Verdict

Robinhood

Pros
Cons
Fractional share dealing from $1.00 and access to IPO trading
Questionable business practices and lack of overall transparency
Debit card for swift financial transactions with weekly rewards
Beginner traders get a wealth of educational content in written form
Optimized mobile app

E*TRADE

Pros
Cons
Excellent order execution and price improvement technology
Limited payment processors
Cutting-edge trading platform and user-friendly mobile app
Commission-free trading and balanced asset selection
Excellent education and research for beginners

Which Forex Broker Is Better?

Robinhood and E*TRADE are well-known equity and ETF brokers, and I recommend traders evaluate their products and services to determine which suits their requirements.

My analysis has shown that Robinhood offers fractional shares ideal for smaller portfolios but has a controversial track record. The Morgan Stanley acquisition has added banking services and elevated E*TRADE to a prime broker for US clients with excellent price improvement technology.

FAQs

What are the disadvantages of E*TRADE?

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E*TRADE has limited payment processors and high financing fees for leveraged overnight positions.

Is there a better platform than Robinhood?

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It depends on the trader’s preferences, but there are many trading platforms that offer superior trading infrastructure and services to Robinhood.

What’s the difference between Robinhood and E*TRADE?

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E*TRADE has superior trading tools, better trading infrastructure, a cutting-edge trading platform, and is more trustworthy, while Robinhood caters to younger traders who prefer mobile trading social media trending assets.

What is the downside of Robinhood?

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Robinhood has a controversial track record, engages in payment for order flow, and this could potentially present a conflict of interest.