Robinhood vs. E-Trade: Which Is Best for Retail Investing?

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Retail investing is becoming more than just a hobby. With the massive gains made by some amateur investors in 2021’s GME frenzy, more and more folks are looking to get in on the action. Trading stocks, exchange-traded funds and cryptocurrency is an engaging pastime as well as a legitimate way to grow wealth thanks to the accessible nature of digital trading platforms.

Digital investment options have exploded over recent years, subverting the need to hire a broker. Investors have many options when it comes to picking a digital trading platform. But which retail investing platform brings the most ease of use for the lowest fees: Robinhood or E-Trade?

Robinhood vs. E-Trade: The Basics

Robinhood is a browser- and app-based brokerage platform with commission-free trades and “digestible financial news” for amateur investors looking to learn more about the ins and outs of the market. Robinhood’s mission is to democratize market trades, not unlike the company’s legendary namesake who evened the financial playing field for the poor. Robinhood’s user-centric mission brings new investors into the game without the expense or the pressure of advanced brokerage options.

E-Trade is known for its early entry into online trading. In fact, E-Trade hosted the first internet stock trade in the 1980s. Since then it has continued offering innovative and simple ways to trade online, and in 2020 it was acquired by Morgan Stanley and renamed “E*TRADE from Morgan Stanley.” When it comes to digital trading platforms, investors look to E-Trade for its legitimacy and longevity.

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Best Features of Robinhood and E-Trade

Getting to know how the features of Robinhood and E-Trade compare can help investors pick the right app for them.

Freebies

Robinhood edges out E-Trade when it comes to freebies. The platform is well known for its commission-free trades, but the feature that entices customers is the free share or fractional share of stock offered with sign-up. That, combined with investing rewards you can earn with the Robinhood Cash Card, which will be available soon, gives new investors two ways to earn free stock.

A new stock lending feature, available to users who meet eligibility criteria, pays investors a monthly fee for loaning their stock to financial institutions and other market participants.

Robinhood makes it possible for those new to investing to learn about stock trading as they make their first moves. Its “Snacks” financial content and podcast deliver valuable information in a brief format to help users get familiar with the market.

E-Trade also offers commission-free trading for stocks, options and ETFs. In addition, you’ll find extensive basic and advanced investing information, in-depth insights and information to help you plan your retirement.

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Array of Investment Options

Robinhood can’t compete with the wide array of investment options available on E-Trade. In addition to commission-free stock and ETF trades, you can trade mutual funds, options, bonds and futures. Robo-investing is available through E-Trade’s Core Portfolios program, and you can also invest in a managed portfolio or individual retirement account.  

The E-Trade app also offers banking products, such as a savings account, basic and interest-bearing checking accounts and a line of credit against your investments.

Robinhood’s banking-like product is a cash-management account with a debit card that earns you weekly investment bonuses when you make purchases using the card. In addition to using the card at over 90,000 fee-free ATMs, the card lets you send checks. The card isn’t available yet. However, you can join the waiting list.

Cryptocurrency

Robinhood is the clear winner when it comes to cryptocurrency investing. You can buy or sell 13 different currencies, including bitcoin, ethereum, dogecoin, litecoin, ethereum classic, bitcoin cash, polygon and solana — commission-free. Coins you buy are held in “cold” storage — that is, offline storage that’s less vulnerable to hacking and other threats than wallets that are connected to the internet.

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E-Trade’s cryptocurrency offerings are limited to securities that track cryptocurrency, own cryptocurrency assets or provide services to the cryptocurrency industry. They give you exposure to cryptocurrency without owning coins directly.

Fee Overview

When it comes to fees, it’s a wash between Robinhood and E-Trade.

Robinhood’s claim to fame is its commission-free stock trading. However, its Gold subscription, which includes perks like larger instant deposits, margin investing and more advanced market data, is $5 per month. Robinhood also charges for some optional services such as paper statements and overnight check deliveries for transfers.

E-Trade wants its users to “focus on your future, not on fees.” It spells out its fees very clearly, noting that it offers $0 commission trades, $0.50 to $0.65 options contracts, $1.50 futures contracts and $1 bond trades.

E-Trade investors who get into some deeper trading options may encounter fees associated with those options. They include large block transactions, over-the-counter transactions and forex transactions.

Mobile Apps: On-the-Go Trades

With the hobby-like atmosphere of stock trading these days, many like to scroll through their portfolio and make moves over their lunch break. They need trading apps that are simple and responsive enough to get the job done on the go. Both Robinhood and E-Trade offer app versions of their platforms so that users can make trades easily, wherever they are.

The Robinhood App Experience

The Robinhood app has trading tools built in so that users can access the full array of financial tools from their mobile device. These trading tools include news articles, live market information and ratings from analysts. Investors can also use smart notification settings to stay on top of their buy/sell thresholds and other events in the app.

Included alongside the trading options in Robinhood are typical cash management abilities like direct deposit and digital checking.

Users rate the Robinhood app 3.8 out of 5 stars on the Google Play store and 4.2 out of 5 stars on the App Store.

The E-Trade App’s Capabilities

E-Trade offers two apps: a basic E-Trade investment and savings platform and Power E-Trade, an advanced trading app. The E-Trade app includes functions for buying and selling, banking and educational content. Power E-Trade is designed for sophisticated investors and offers advanced charting and access to futures and options trades.

Users rate the E-Trade app 4.1 out of 5 stars on the Google Play store and 4.6 out of 5 stars on the App Store.

Good To Know

Everyone gets a free share or fractional share of stock when they sign up for Robinhood. Some of the stocks have come from companies such as Staples, Southwest and Home Depot. The free shares are worth anywhere from $3 to $225, with about 98% having a maximum value of $10.

Robinhood vs. E-Trade: Which App Is Best for Consumers?

For the average beginner trader, Robinhood offers a streamlined process and the ability to trade cryptocurrency at no extra cost. Its educational features allow users to dive in with enthusiasm while still gaining wisdom along the way. But its simplicity and low buy-in options make it attractive to those checking out trading as a pastime.

Given the diverse tools and accounts available, investing on E-Trade makes the most sense for those who have gotten serious about saving, planning for retirement and investing in a variety of asset classes. E-Trade has all the tools necessary for a more mature investment strategy compared to the hobby-like tone of Robinhood.

Daria Uhlig contributed to the reporting for this article.

Information is accurate as of July 15, 2022.

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About the Author

Emily Cahill is a writer with over three years of experience creating digital content. Previous to that, she worked as a freelancer in publishing while attending Trinity College for English/Rhetoric. She specializes in SEO-driven content that highlights the unique properties of a product or service while making them digitally “findable,” particularly for the finance, geek culture, and lifestyle niches.
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