Webull vs. Robinhood: Which Is Best for You in 2022?

By Katy Hebebrand

March 28, 2022

scyther5 / iStock.com

Learning about investments was once out of reach for many Americans. When you think of investing money in the stock market, after all, you probably imagine the New York Stock Exchange. But thanks to financial technology, all you need to invest are a phone or tablet and an account with a company like Webull or Robinhood — two fintech companies that have made investing friendly enough for anyone to feel comfortable doing.

Webull and Robinhood are top competitors for investing opportunities, but how do you know which one is right for you? We’re breaking down the pros and cons of each site so you can make an educated decision.

What Are Fintech Companies?

The greatest benefit of online trading platforms is that you can dabble in investing without paying commissions to brokers. If you like to be hands-on with knowing where your money is going, these online platforms are the way to go.

Webull and Robinhood both make investing easy, but each caters to a niche market. Webull positions itself as being more sophisticated, while Robinhood strives to make “democratize” investing. Both offer a desktop and app experience for users.

Keep in mind that Webull and Robinhood are designed for active, engaged investors. If you prefer a hands-off approach where you’re not making individual decisions about trading, neither site may be for you.

Know the Risks of Online Trading

Online trading has its share of pitfalls. Instances of fraud are high, and you’re at risk of scammers hacking into your account. If you decide to invest through an online platform, beware of:

• Phishing emails that appear to be from Webull, Robinhood or other investing sites
• Imposter websites designed to steal your login information when you try to access your account
• Denial of service warnings that make you think your account is locked out

As long as you stay vigilant in protecting your personal information and assets, investing online is safe.

Pros and Cons of Webull

Webull maintains an air of sophistication around investing. The site feels professional and serious, catering to investors who know about the stock market. Yet even with the site being a little more polished, it’s still accessible to the average person.

Pros

• There isn’t a minimum deposit amount to open an account.
• You don’t have to pay commissions to trade stocks, exchange-traded funds, options or cryptocurrency.
• Fractional shares are available ($5 minimum).
• Offerings include individual retirement accounts and margin accounts.
• You can access real-time investment quotes at no charge.

Cons

• The platform doesn’t offer joint brokerage accounts, education savings accounts or automated investing options.
• Investors have no access to mutual funds.
• Webull has fewer tools and resources available to users compared to other sites.
• The website is awkward to navigate and search.

Pros and Cons of Robinhood

Robinhood works to make stock trading easy and fun. The site removes some of the seriousness that is typical with investments and strives to ensure trading is easy to understand.

Pros

• It’s free to trade stock, options, ETFs and cryptocurrencies
• You can buy partial shares.
• You can try margin investing.
• A spending account for cash management is coming soon.
• The app and website are easy to navigate.
• Robinhood has a wealth of educational content for new investors.

Cons

• It has fewer investing tools and resources available to users compared to other sites.
• The platform doesn’t offer retirement accounts, joint accounts, education savings accounts or mutual funds.
• You can’t name beneficiaries on your account.

How Do I Know Which Investment Option Is Right for Me?

Consider the following factors when deciding between Webull and Robinhood as your investment platform.

Ease of Account Opening

You can set up either account completely online. The application process takes about 10 minutes, and many users receive instant approval. Requirements include:

• Being at least 18 years old
• Having a valid U.S. Social Security number
• Providing a physical address in the U.S.
• Proving your U.S. citizenship by providing a license, ID card or passport

You’ll be prompted to take and upload a picture of supporting documents like identification. Keep in mind that your address and other personal information should match the card you provide.

Fees

Robinhood doesn’t charge commission on trades, and it doesn’t charge for options contracts. To trade stocks on margin, you’ll have to upgrade to the Gold account option and pay a $5 fee each month, which includes your first $1,000 of margin. There’s also a 3% annual fee for margins greater than $1,000.

Webull doesn’t charge commission fees, either, nor does it charge a contract fee for options. However, it does charge a slightly higher rate of 6.99% for margins up to $25,000. After that, the fee lowers in half-of-a-percent increments for margins up to $3 million.

Day Trading

Consistent with day-trading regulations, both sites limit you to three day trades per five-day period from a margin account. If you have a minimum account balance of $25,000 with either site, you can get around this limit.

Minimum Opening Deposit

Neither account has a minimum opening deposit. However, you won’t be able to buy securities from a cash account until you make a deposit to cover your purchase.

Account Types

Both companies offer similar basic accounts and upgrades. Webull has both cash and margin accounts, but it doesn’t offer any paid account options aside from incentivizing larger deposits. Robinhood offers three account types:

Withdrawal Options

ACH withdrawals are free on both platforms. Neither allows transfers using credit cards, debit cards or digital wallets. Both sites limit you to $50,000 in withdrawals per day. Domestic transfers cost $25 on Webull, and international transfers cost $45. Robinhood doesn’t charge a fee for moving money between your brokerage account and bank account.

Security

Your money is equally safe no matter which platform you choose. The Securities Investor Protection Corporation protects your investments against losses in the event the brokerage goes under. If either company goes broke, your SIPC protection is $500,000 and includes a $250,000 limit for cash. Robinhood takes that a step further by guaranteeing it’ll cover any direct loss due to unauthorized activity on your account.

User Experience

Robinhood and Webull are very similar when it comes to account and fee structures. Both offer educational materials, although you’ll need to access them using the mobile app if you go with Webull. With this in mind, your choice may come down to the user experience.

Webull Interface

Webull is simple yet sophisticated. There aren’t as many bells and whistles to catch your attention. The desktop interface is less user-friendly than the app. And although you can use some tools, such as a screener, and read financial news snacks on the website, you won’t find much educational content there.

Robinhood Interface

The draw of Robinhood is the excitement behind trading. Since the platform turns stock trading into a more game-like experience, it’s easy to get in over your head. If you choose Robinhood for investments, explore before making too many financial moves. Whether you use the app or the website, you’ll find plenty of educational information to get you started on the right foot.

Keep in mind that the excitement may lead you to add more money to your account. Even if you don’t invest it in the stock market, you’ll have to wait four to five days for the funds to clear before you can withdraw your cash.

Other Considerations

Seek Professional Advice

The aspiration for DIY investing doesn’t mean you have to do it alone. Speaking to a financial advisor is always a good idea before moving too much of your money into the stock market.

An advisor can explain some of the financial acronyms and lingo so you know what everything means. They can also talk to you about selecting assets that are a good match for your budget and your risk tolerance so you can make investment decisions within your comfort level.

Advice

While investing can be fun and exciting now, it’s important to set long-term goals and maintain your commitment after the newness wears off. Make sure you continue learning about the stock market and best practices for investing in today’s market.

Both of these platforms will encourage you to deposit large sums of money. But don’t feel tempted to change your investment flow away from retirement accounts and into a platform like Webull or Robinhood.

Instead, maintain your automatic transfers to 401(k) and retirement accounts and set aside a little extra for your investments. This strategy ensures that you don’t lose your retirement money by making a misstep with investing decisions.

Daria Uhlig contributed to the reporting for this article.

Editorial Note: This content is not provided by the companies mentioned. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by the companies mentioned.

About the Author

Katy Hebebrand

Katy Hebebrand is a freelance writer with eight years of experience in the financial industry. She earned her BA from the University of West Florida and her MA from Full Sail University. Since beginning to work full-time as a freelance writer three years ago, she has written on topics spanning many fields, including home building, families and parenting, legal and professional/corporate communications.