Have you heard of Robinhood? It is a controversial online trading platform that has been losing its investors and is now on the lookout for the best Robinhood alternatives.
Available on desktop and mobile, Robinhood was launched in 2013 as a beginner-friendly trading platform. You can trade stocks, real estate investment trusts (REITs), ETFs (exchange-traded funds), cryptocurrencies, and options without any commission charges.
Sounds good on paper, but then, a series of unfortunate events happened.
This article will look into this promising platform’s story and the alternatives that investors can consider for their investments.
Let’s start at the beginning.
What Is Robinhood?
For the past decade, it’s all been about online trading platforms and online investing.
Robinhood is one of those platforms that offer online trading services as part of your investment strategy.
Charging only fees for ETFs and regulations made Robinhood a big name in online stock trading. The minimum fee policy was a big selling point because it allowed new users to jump into online trading without incurring big charges.
Moreover, offering free stock and bonuses to new users hooked the crowd in droves. Premium Robinhood accounts, or Robinhood Gold, give users the ability to pre and post-market trade.
Robinhood also has the option to trade, and they do not charge any commission. However, the following items are charged by the Financial Industry Regulatory Authority (FINRA) to the investor, the amount of which depends on the amount invested: Regulatory Transaction Fee, Trading Activity Fee (TAF), and American Depositary Receipt (ADR) Fees.
Regulatory Trading Fees
- Regulatory. $22.90 per $1,000,000 of principal (sells only), rounded up to the nearest penny. (effective May 14, 2022)
- TAF. $0.000130 per share (equity sells) and $0.00218 per contract (options sells).This fee is rounded up to the nearest penny, no greater than $6.49.
What Happened to Robinhood?
Robinhood tried to “protect” its users by banning users from buying certain stocks, such as GameStop, AMC, and Nokia, from justifying its platform’s name. As a result, the trading platform came under fire for manipulating the stock market to protect its investors. Robinhood replied to these claims by saying it did it to keep its users safe from market volatility.
Despite that, the platform faced lawsuits regarding these actions and backlash from its user base for limiting their options to buy stocks.
If things weren’t bad enough, the trading platform was a victim of a hacking attack in November of the same year. Due to this massive security breach, the personal data of over 5 million users was leaked. Naturally, this raised many questions about Robinhood’s credibility combined with the ongoing lawsuits.
Last year was disastrous for this trading platform as it saw a steep decline in its market shares. New and old users pondered whether they should stay or join this platform to continue trading or start their investment portfolio.
These factors combined didn’t paint a very good picture for Robinhood. Most people left it after the security breach because no one wants to risk their information being leaked on the internet, especially related to their hard-earned money.
Some went as far as to say that the glory days of Robinhood are over.
Why Look for Robinhood Alternatives?
If the lawsuits and security break combined with the dwindling market value isn’t enough for you, then there are other reasons why you should look for Robinhood alternatives.
Let’s start with the biggest red flag.
- Security Issues. Suppose you purchase any cryptocurrency or digital assets on Robinhood. In that case, you might as well throw your money away as it doesn’t give you the private key for the assets or the transfer of your digital currency in your web wallet. Plus, there was that previous security breach.
- Information Limitations. It has inaccurate real-time information on the stock you want to buy, which shouldn’t even be an issue for a platform for trading and investing, but unfortunately, it is. In addition, it has considerable delays in updates that result in users unable to make accurate and sound decisions regarding their investments.
- Less Investment Options. For people interested in IRA accounts and dividing their investment into parts to not suffer huge losses, Robinhood is not for you as it doesn’t have IRA accounts or the option for mutual funds.
- Lack of Analytical Tools. Crucial for investors to make accurate, timely decisions, analytical tools are not provided by Robinhood. Thus, you can’t analyze the stocks. This is one of the biggest drawbacks of this platform. Instead, it offers the option to view real-time data and create a watchlist. A trading platform not having analytical tools is like a burger joint with no burgers.
15 Best Robinhood Alternatives
1. M1 Finance
The high customizability and automated services of M1 Finance are perfect for experienced and new traders. It offers the option to automate your investment, meaning the tools on M1 Finance will handle most of the work.
- No initial investment needed
- Great for long-term investments
- IRA accounts available
- Zero fees
- No financial advising
- Tax-loss harvesting is not available
M1 Finance offers a feature called “Pie.” It is a pre-made portfolio that investors can use to have total control over their portfolios. Users can use the one that fits their needs, change it, or make a new one.
Read our full M1 Finance review for more details on the platform.
[Related Read: M1 Finance And Crypto – When Is This Happening?]
Acorns have a feature that allows you to invest the change you have left after purchasing something—all you have to do is link your card to your Acorns account. Of course, you can deposit money into your account too.
- Minimum account fee of $0
- $10 signup bonus
- Has three service tiers to choose from
- Cash back option
- No tax-loss harvesting
- No financial advisors on the platform
- High fees charged
New users have pre-made portfolios to choose from, and auto rebalancing is also offered so you can catch up with the latest market trends. Read our detailed Acorns review and learn more about the platform’s services.
eToro is widely referred to as the best online trading platform. Like Public, it is also a social trading platform with unique features such as Copy Trading, making it a prime choice for new users and veterans.
- 120+ Cryptocurrencies supported
- Gives new users 100K funds to experiment with
- Good education and analytical tools
- Social and Copy Trading
- Has fractional assets
- Customer support is lacking
- Non-trading fees are high
eToro offers copy trading and copy portfolios. Copy portfolios are developed and maintained by eToro, meaning you just have to invest and forget about it. Copy-trading allows you to mimic the trading of an experienced individual, and the algorithm will copy and adjust it according to your portfolio.
SoFi is beginner-friendly with an easy-to-use mobile app and an excellent Robinhood alternative. It is best for new investors because it offers zero-commission trading and a cash-back option.
- Regulated by SEC and FINRA
- Trusted platform
- Cashback option
- Active and automated investing services
- Free stocks
- Available only in the US
- For every crypto purchase, a 1.25% fee is charged
SoFi has the option to talk to a financial advisor for free. Moreover, it offers sign-up bonuses, automated services that handle your investments, no withdrawal or deposit fees, etc.
Gemini has a wide array of cryptocurrencies to choose from. It allows its users to fully own the coins they purchase—a significant advantage over Robinhood.
- Effortless trading
- Have ownership of the assets you purchase
- Can move coins into your web or Gemini wallet
- High-end analytical tools offered
- Gemini charges a 5% fee on all transactions
- A minimum commission of 1.49% is charged
You can own the cryptocurrency you purchase through Gemini and shift it into your digital wallet. This trading platform also has a special offer for new users, where trading $100+ in Bitcoins will result in your receiving $20 in Bitcoins.
If you’re coming from Robinhood, you’ll be happy with the layout of Public as it is very similar. However, Public leans more towards a social trading platform where you can be part of a community, follow others, and ask for help and guidance.
It is one of the highest recommended Robinhood alternatives.
- Allows buying and selling of fractional shares
- A well-knit community of investors
- Can ask for help and guidance from experienced members
- Zero commissions on trades
- $10 signup bonus
- Managed funds not available
- Support is lacking
- No IRA
Public is great for new users or people who want to trade and invest casually. It allows you to be a part of a community, learn from it, and ask for help whenever needed. Follow experienced individuals of the community to learn from them and follow their investment advice.
Webull offers new users excellent signup bonuses, and once you’re on the platform, there is no time limit for trading, as you can do it before and after the market opens or closes.
- Offers free stocks to new users
- Commission-free trading
- Supports short selling
- Supports margin trade
- A vast array of cryptocurrencies available
- IRA and taxable accounts available
- No credit or debit card supports
- Payments must be made through wire transfer
- Available only in the US
- Wire transfer is costly
The great part about choosing Webull as an alternative is its quick signup and free stock offer. In addition, it has a maximum of $500,000 investor protection, regulated by SEC, FINRA, and SFC, making it a trusted and easy-to-use platform.
You may check our full Webull review here.
Fidelity provides many investment options such as ETFs, stocks, crypto, bonds, etc. It also has a library of advanced analytical and research tools at your disposal that helps you with your financial goals.
- Advance research and analytical tools are available
- No commission on US-based stocks and assets
- Strict regulation policies
- Multiple options to invest in
- Does not support credit or debit cards
- It has a comparatively high trade fee
The educational material on Fidelity, combined with powerful research and analytical tools, makes it a great option for new and experienced traders.
Moomoo offers investor protection for up to $500,000. It is fast and secure as solid authorities regulate it. Moreover, this brokerage shines in the foreign exchange market due to its after-hour trading.
- No commission on stocks and ETFs
- Advanced analytical tools
- Zero minimum deposit fee
- Pre and post-market trading and quotes are available
- Support only through email
- Credit and debit cards are not supported
- Crypto transactions not supported
This online brokerage has a fast account setup with no deposit fee. It offers Forex trading as well as before and after-hours trading. It also has a good collection of analytical tools at your disposal.
So, If you’re interested in trading Forex, you may look up the list of top online Forex brokers, to find a broker that can assist you in making informed trading decisions across a wide range of currency pairs.
Betterment is an excellent replacement for Robinhood as a brokerage platform. It only deals in ETFs. It allows people outside the US to invest and offers diverse portfolios made by modern portfolio theory.
- Has tax-loss harvesting
- Has tax impact and coordinate preview tool
- Multiple pre-made diverse portfolios are available
- Free automatic rebalancing for everyone
- IRA available
- Only has ETFs
- No direct indexing
The great thing about Betterment is that you can set your goal and leave the rest to Betterment when you set your account. It automatically invests and adjusts everything to match your goal in the desired time frame.
11. Interactive Brokers
This trading platform has been in the market for a very long time. While having all the usual options to invest in, Interactive Brokers offers international stocks and futures trading.
It also has an excellent collection of tools that offer in-depth analysis.
- It has a SmartRouting system
- Powerful tools available such as Options Spread Grid and Order Entry Wheel
- No minimum account balance restriction
- Low trading fees
- Complex fee structure
- Not beginner-friendly
- Tools offered can be intimidating to use
Interactive Brokers is one of the best alternatives to Robinhood due to the sheer amount of analytical data you can gather using its tool. The learning curve is steep, but the payoff is well worth it.
Also, it has no withdrawal, deposit, or inactivity fee.
Stash is a user-friendly online brokerage for experts and beginners. It offers its users pre-built portfolios to invest in. Its robo-advising feature guides users to make the most beneficial, accurate, and timely decisions.
- Fractional stocks are available
- No deposit fee
- It has a dividend reinvestment tool
- $5 signup bonus
- No tax-loss harvesting
Stash offers its users a dividend reinvestment tool to reinvest ETFs and other stocks, expanding their investments. Perfect for people looking for a long-term investment plan.
13. Ally Invest
Ally Invest allows you to invest in multiple options, such as bonds, futures, ETFs, etc., with minimum hassle due to its beginner-friendly layout, making it easy to understand.
- Zero commission in the US stocks
- Solid research and analytical tools
- Easy to understand layout
- It does not support cryptocurrencies
14. Charles Schwab
This online brokerage allows you to buy fractional stocks with zero commission fee. Those fractional shares are in the S&P 500. Moreover, Charles Schwab has a high-end library of automated tools, IRA accounts, and more.
- Can meet financial advisors and consultants in person
- S&P 500 fractional shares offered with zero commission
- Limited variety of fractional shares available
The most outstanding feature of this trading platform is that you can meet its advisors in person. They can guide you regarding your account setup, investment plan, goal tracking, etc.
Launched in 1982, eTrade has been in the game for a long time. This platform is trusted and offers a huge variety of assets. One of the best platforms for mutual funds, it allows trade on margin and will build a portfolio for you upon an investment of $500.
- No minimum deposit
- Commission-free trading of stocks and ETFs
- Automatic investment tools are available
- Free rebalancing available
- Credit and debit cards are not supported
- Not ideal for short selling
With eTrade, you can simply invest your money and forget it. You don’t have to balance or look at the market fluctuations. eTrade will handle everything for you.
How to Choose the Best Robinhood Alternative?
Depending on your goal, multiple options might be the right fit. Generally, there are important factors you should consider while choosing an alternative for Robinhood.
In this day and age, a mobile application is vital. You can trade on the go and keep an eye on market fluctuations. The app will also notify you of changes to quickly analyze and decide.
So, a good mobile app with easy-to-understand features and navigation is on top of the list.
Robinhood has the option to trade in multiple assets with zero commission. Many platforms offer the same free trade option, while some charge a small fee. Both have pros and cons, so choose the one that benefits you most.
Opening Account Deposit
Suppose a platform charges a high account opening deposit. In that case, you should probably look for another option, as there are great platforms available that do not charge any account opening fee while offering excellent features.
The user interface (i.e., how a user interacts with a website or app) shouldn’t be too complex so that there is a steep learning curve. The desktop and mobile applications should be easy to maneuver and understand.
There is no point in using a platform that does not offer you the assets you want to invest in. For example, Betterment only deals in ETFs, so if you want to invest in bonds or cryptocurrency, Betterment is not your option. Make sure that the platform offers and supports the assets you’re looking for.
Frequently Asked Questions (FAQs) – Robinhood Alternatives
Should I Stop Using Robinhood?
Seeing how Robinhood has suffered from a decline in its stocks and a security breach, it is probably better for you to look for an alternative.
Is Acorns Better Than Robinhood?
Both trading platforms are good in their own right and cater to different audiences. Robinhood offers new users the ability to invest in independent stocks.
In contrast, Acorns is more suited for people looking for a long-term investment plan and a more laid-back approach. In addition, Acorns offer automated rebalancing and investment options that fit your goals.
Is Fidelity Better Than Robinhood?
Fidelity has a broader selection of assets and advanced analytical tools and is strictly regulated. Robinhood is more user-friendly and charges a lower fee.
It boils down to what you’re looking for and your goal.
Is SoFi Like Robinhood?
SoFi and Robinhood share many similarities, such as no maintenance fees, no commissions, etc. However, these two platforms differ in their type of accounts.
Robinhood has taxable, individual investment accounts, whereas SoFi offers Roth, IRAs, traditional, and joint accounts.
Conclusion – Robinhood Alternatives
With the alternatives discussed in this article, you can choose your pick of the crop depending on your investment needs and plans. Your initial considerations could include the trading app’s financial requirements (minimum opening/maintaining balance and trading-related fees), a variety of available trading options, appropriate and easy online/mobile UI, and information support.
Investment choices do not only refer to the mutual fund, stocks, and options you will hedge your hard-earned money. The investment vehicles you will use for your investment products are as important as these choices. Your online trading account is your wallet for your online investment, so make a wise choice on the platform you will choose.
Investing your money, being clear about your financial goals, and doing your research are very important steps. Only then can you make the best decision based on available information and your particular circumstances.