Interactive Brokers vs. Robinhood Introduction
While Robinhood was the first brokerage to charge $0 commissions for stock and ETF trades,
it’s not alone anymore. Interactive Brokers has dropped its equity trading fees to zero,
too, and it provides many features that Robinhood doesn’t. Has Robinhood met its match?
Let’s see.
Fees
| Broker Fees |
Stock/ETF
Commission |
Mutual Fund
Commission |
Options
Commission |
Maintenance
Fee |
Annual IRA
Fee |
|
IB
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$0
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$14.95
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$0.70 per contract
|
$0
|
$30
|
|
Robinhood
|
$0
|
na
|
$0 per contract
|
$0
|
$0
|
Services
| Broker Review |
Cost |
Investment Products |
Trading Tools |
Customer Service |
Research |
Overall Rating |
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IB
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Robinhood
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Promotion Links
Interactive Brokers: Use this referral link to get up to $1,000 of IBKR stock for free!
Robinhood: 1% IRA match and up to $200 FREE stock at Robinhood.
Category #1: Available Investments
Interactive Brokers:
Although headquartered in the U.S., Interactive Brokers is really a global brokerage. It serves clients outside the U.S. and offers trades on many international exchanges. Products include:
- Precious metals
- Funds (mutual, exchange-traded, and closed-end)
- Warrants
- Futures
- Options
- Forex
- Cryptocurrencies
- Stocks
- Bonds
Exchanges include:
- Toronto Stock Exchange
- Frankfurt Stock Exchange
- Budapest Stock Exchange
- Euronext
- Hong Kong Stock Exchange
- Tokyo Stock Exchange
Robinhood:
Robinhood only accepts applications from legal U.S. residents, and it only offers trades on U.S. exchanges. Its tradable products list is much smaller. You can’t trade precious metals, mutual or closed-end funds, warrants, futures, forex, or bonds.
Robinhood’s one advantage in this category is more crypto choices. Currently, it offers eleven coins versus four at Interactive Brokers.
Neither firm here has managed accounts or investment advice.
Winner: Interactive Brokers
Category #2: Margin Trading
Interactive Brokers:
Interactive Brokers generally keeps margin rates low. Its IBKR Lite rate is 6.83%. If you sign up for IBKR Pro, you’ll get even better rates, which can range from 5.83% down to 4.83%.
IB’s software shows margin details, including initial and maintenance requirements, right on its desktop system and mobile app.
Robinhood:
Robinhood’s platform doesn’t display these details. The broker currently charges 5.75% for amounts below $50K, with slightly better rates for bigger balances.
Winner: Robinhood
Category #3: Websites
Interactive Brokers:
Interactive Brokers calls its website the client portal. This portal is a big help in trading. You’ll find a message center, an AI named iBot, an advanced trade ticket, and strong charting (from TradingView).
These charts have eleven plot styles, such as point & figure and Renko, and about a hundred technical studies. There are many customization options.
The trade ticket on IB’s portal has six order types and bracket orders (stop loss and take profit).
Robinhood:
Robinhood’s website doesn’t have a special name, which kind of fits its limited features. Charts have two plot styles (line and candlestick) and just four technical indicators.
Its order ticket has six trade types but lacks bracket orders. There are only two time-in-force choices (Interactive Brokers offers three).
Robinhood’s site has fewer tools overall (for example, no AI, no alerts). Interactive Brokers does have alerts.
Winner: Interactive Brokers
Category #4: Other Software
Interactive Brokers:
Trader Workstation is IB’s desktop platform with many high-level tools. You’ll find superb charts, a powerful trade ticket, and advanced option features, like a volatility lab and a probability lab. You can even watch Bloomberg TV for free.
IB also has a robust mobile app with advanced features. It provides two order tickets, including a wheel-based system in landscape mode with scrollable numbers. Charts can go horizontal and have technical studies like Bollinger Bands.
Other handy features include the iBot AI, global trading, and mobile check deposit.
Robinhood:
Robinhood has no desktop platform, just a mobile app. While it’s decent, many of IB’s features are missing. Robinhood’s order ticket mirrors the website’s (limit, trailing stop, recurring).
The app’s charting is very limited. You can’t rotate the screen to see charts horizontally, and there are no indicators. The watchlists match those on the website.
Winner: Interactive Brokers
Category #5: Day Trading
Level II Quotes. Both brokers have them (for an extra charge).
Direct-access Routing. Only at Interactive Brokers.
Shorting. Robinhood doesn’t allow short selling. IB does.
Routing Fees and Rebates. Interactive Brokers offers maker-taker fees, Robinhood does not.
Interactive Brokers:
Trader Workstation shows day-trade counts. Look in the Account Window under the Account tab. If your account is flagged for pattern day trading, you can reset it by going to the messaging center (under Help). Then pick Secure Message Center, Trade Issues, and Pattern Day Trader Reset Request.
Robinhood:
Robinhood’s site also shows day trades (under the Investing tab within Account). You can enable pattern day-trade protection, which blocks you from triggering PDT status. You’ll find this in the Settings tab within the Account menu.
Winner: Interactive Brokers
Category #6: Other Services
Cash Management Features: Both offer Mastercard debit cards. Robinhood additionally has round-ups, bonuses, free ATMs, and the option to mail checks. It pays a high 4.25% APY on idle cash.
Periodic Mutual Fund Investing: Not available at either brokerage.
Initial Public Offerings: Robinhood offers IPOs; Interactive Brokers doesn’t.
Fractional Share Trading: Both let you buy stocks, ETFs, and crypto in whole-dollar amounts.
Individual Retirement Accounts: IB has Roth, traditional, Inherited, and SEP IRAs. Robinhood offers a 1% match, which IB doesn’t.
Extended Hours: Both provide pre-market and after-hours sessions for stocks and ETFs.
DRIP Service: Robinhood has DRIP for both stocks and ETFs. Interactive Brokers offers it only for stocks.
Winner: Robinhood
Our Recommendations
Small Accounts: Robinhood is better for both cash and margin accounts.
Long-Term Investors and Retirement Savers: We like Robinhood for its 1% match.
ETF & Stock Trading: Interactive Brokers is our choice, thanks to its impressive mobile app and desktop software.
Mutual Fund Trading: IB is your only option.
Beginners: Interactive Brokers is intended for more advanced traders. Robinhood is friendlier to newcomers.
Promotion Links
Interactive Brokers: Use this referral link to get up to $1,000 of IBKR stock for free!
Robinhood: 1% IRA match and up to $200 FREE stock at Robinhood.
Robinhood vs Interactive Brokers Judgment
Just charging $0 commissions isn’t enough these days. Interactive Brokers has that plus many
extras that Robinhood lacks.
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