With the decade coming to a close, it’s a great time to make major financial moves.
Each new year is an opportunity to create and accomplish goals.
But each new decade is also an opportunity to supercharge those goals.
One of the biggest and most important goals to focus on is investing.
If you’re new to investing, you may not know where to start…
…this is where we can help you.
Here are three things to remember as a beginning investor:
Step One: Start investing – ASAP
Sure, investing can be intimidating.
But nothing ventured means nothing gained!
It is time to stop procrastinating.
The longer it takes to get started, the more time you spend missing out on gains.
It is a common misconception that you need tons of money to invest.
This is not true.
Invest early, invest often, and invest what you can!
It will all add up significantly over time.
Step Two: Stay Positive
Markets naturally rise and fall over time.
But in general, the stock market trends upward.
So, if you see it dip…
Even the most experienced investors fail when they try to predict market changes.
It is impossible!
So, stay strong and ride the waves.
Step Three: Keep it Simple
To reduce the risks that come along with investing, remember to do these two things:
Simplify and diversify.
You can simplify by taking advantage of virtual help in managing your finances.
To diversify, you can aim for a solid mix of stocks and funds.
And, if you stick to these three starter steps, you will be off to a great start!
Most new investors become discouraged by these (inaccurate) hurdles:
- It’s too expensive to start investing
- Investing is too hard
These may have been true in the past…
…but not anymore!
Today, investing is easier than ever.
In fact, apps like Robinhood and E*Trade make investing verrry easy.
You can use these apps to find lucrative investment options and set yourself up for a healthy financial future.
But, which app is better?
Today, we are here to find out the answer!
That is why we are bring you…
…Robinhood vs. E*TRADE.
Here is where hurdle number three comes in:
There are too many investing options!
Well, fret not, fellow investors…
…we have that covered for you, too.
And we have chosen a clear-cut winner (but you must read on to find out).
Robinhood vs. E*TRADE: Overview
Robinhood: An Overview
Robinhood is an up-and-comer in the virtual investing space.
But don’t let their age fool you…
…they’re already one of the best!
More than ten million users are investing through Robinhood, already.
What is all the hype about?
Robinhood is FREE.
If you have ever used another investing app, you can see why they are a big deal!
Trading stocks, exchange-traded funds (ETFs), options, and cryptocurrencies often entails hefty fees.
Even the smaller fees are problematic, and they add up significantly over time.
But not here.
In fact, earlier this year, Robinhood was awarded the title of Best for Low Costs.
Needless to say, Robinhood is changing the game.
And it’s really easy to get started.
Just download the app, enter your info, fund your account, and invest!
E*TRADE: An Overview
On the opposite side of the age spectrum, we have E*TRADE.
This company has been helping investors for over 30 years.
The biggest difference between Robinhood and E*Trade?
It is the fees.
You will get a much broader product line, but you will pay for it.
E*TRADE investors can trade stocks, ETFs, mutual funds, options, bonds, and futures.
U.S. Treasury auctions and initial public offerings (IPOs) are also available.
Cryptocurrencies are not one of the trade options they offer currently.
But, keep an eye out, because that may change!
With all of the extra options, it seems that E*TRADE is great for more active investors.
But is it better overall?
We shall see.
However, one thing is for sure:
When it comes to signing up, they’re both incredibly easy.
You can follow the same process as Robinhood to get started with the E*TRADE app.
Robinhood vs. E*TRADE: Investment Options
Robinhood: Investment Options
The Robinhood app allows you to trade stocks, ETFs, options, and cryptocurrencies.
In fact, there are over 5,000 stocks to choose from.
This includes most U.S. equities and ETFs, along with over 250 global stocks.
When trading you can issue market, limit, stop-limit, and stop orders.
Each stock trade is completely free.
Robinhood’s options contracts include U.S. exchange listed stocks and ETFs.
There are no commissions, per-contract fees, exercise fees, or fee assignments.
The filters on the app make it easy to advance your strategies when you get comfortable.
Use trading options to boost your margins.
And, last but not least, is cryptocurrency.
This is becoming more and more popular each year.
You can invest in Bitcoin, Ethereum, Litecoin, or Dogecoin…
…and make trades any time, day or night.
Cryptocurrency trades are free and a great way to keep up with investing trends.
E*TRADE: Investment Options
E*TRADE users can trade stocks, ETFs, mutual funds, futures, bonds, and options.
They can participate in IPOs and U.S. Treasury auctions, too.
The app makes it easy to move between all of your investment options.
This means easier management of your multitiered portfolio management.
Remember, simplify and diversify.
Their advanced trading features make them overshadow Robinhood in this category, too.
Robinhood vs. E*TRADE: Accounts
Robinhood keeps it simple by offering only one account option.
This is an individual taxable investment account.
From there, there are three subaccount options: Robinhood Instant, Robinhood Gold, and Robinhood Cash.
Instant is the default account when you sign up.
You can use it for instant deposits and trading with extended hours.
Gold is the next level up.
You can make larger instant deposits and you’ll have more buying power to play with.
Cash gives you the ability to make commission-free trades in regular or extended hours.
E*TRADE has worked hard to appeal to a variety of different investors.
One of the ways they do this is offering multiple account options.
Six, to be specific:
- Brokerage account
- Core portfolios
- Premium savings account
- Traditional IRA
- Roth IRA
- Rollover IRA
If you’re starting out with investing and trading, the brokerage account is the one you want.
Core portfolio accounts give you a diversified portfolio that they’ll monitor and manage for you. The extra help makes it easier, but it’ll have a $500 minimum and a 0.30% advisory fee.
This is harder to justify for a beginning investor.
The premium savings account has no minimum deposit and offers an APY that’s currently 17x the national average.
If you’re in the market for a new savings account, this is a good one to consider.
Traditional and Roth IRAs are available for retirement contributions and investing.
Lastly, their rollover IRA lets you consolidate your assets from an old employer’s retirement plan.
Robinhood vs. E*TRADE: Similar Features
Stocks, ETFs, and options trading
You can trade in all three of these categories on each app.
They both have the core three and they’re easy to use.
Both apps provide you with free learning materials.
These materials are really helpful, especially for beginning investors.
Minimum balance requirements
For both Robinhood and E*TRADE users, there is no minimum balance requirement.
Robinhood vs. E*TRADE: Unique Features
Robinhood: Unique Features
One of the best things about Robinhood is that their trades are completely free.
This can be really helpful if you’re starting out or low on funds.
E*TRADE offers commission-free trading on stock and ETF trades.
But for options on E*TRADE, you’ll have to pay between $0.50-$0.65 for each contract, depending on the number.
Even at this low price point, that will add up over time.
Free trades are incredibly valuable.
Most beginning investors are worried about what it will cost, but Robinhood eliminates this worry.
Robinhood takes a lot of the guess work out of the equation by offering only one account type.
This app is slightly easier to use, particularly for new investors.
More experienced or advanced investors might prefer the wide variety of options you find in the E*TRADE app, but it may be more confusing in the beginning.
You can always level up later, but start simple.
As you learn and watch your investments grow, there will always be room for improvement.
E*TRADE: Unique Features
Advanced and intuitive investment options
E*TRADE gives you multiple accounts to choose from.
One even gives you the option to have E*TRADE monitor it for you.
If you have no budget restraints and you want someone else to do the work for you, this is something to consider.
They can help you meet a variety of financial goals.
However, the addition of multiple new options will often scare new investors off.
It’s typically easier to start off simple and build from there.
You can do this by choosing the account you want and ignoring the rest.
Don’t get overwhelmed by bouncing back and forth between all of them.
Tools and resources
Robinhood provides educational resources like price alerts, stock charts, and watch lists.
But overall, their educational tools are minimal and below average.
Their research and analysis options are very limited.
This is unfortunate since they’re otherwise so great for beginning investors.
Hopefully they’ll ramp it up in the future.
E*TRADE, on the other hand, has an entire portal dedicated to educating their investors.
You can find tons of articles, videos, and informative webinars here.
There are spreadsheets available to track current data and they provide a technical analysis.
They’ll teach you the basic principles of investment and beyond.
You can also find information on their other account types there…
…which brings us to our next point:
E*TRADE offers three different retirement account options.
If you’re not already contributing to your retirement, you should start.
It may be helpful to have both your investment and retirement accounts in the same place.
Robinhood does not offer any retirement accounts.
Robinhood vs. E*TRADE: Minimum Deposit, Commissions, and Fees
Robinhood is known among investors for its affordability.
There simply aren’t any fees incurred when you use this app.
There is also no account minimum.
But it’s important to remember that there are trading fees that are outside of Robinhood’s control.
There are fees that are imposed by the U.S. Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
These fees are minor.
The SEC will charge $13 for each $1,000,000 in principal.
FINRA’s fee is $0.000119 per share.
There is no way around these fees but, thankfully, they’re very minimal.
Robinhood also has an optional premium account (Gold) for $5 each month.
Most investors can get by just fine using the free account.
With E*TRADE, you’ll also enjoy commission-free trading of ETFs and stocks.
Like Robinhood, there is no account minimum here, either.
But that’s where the fee similarities end.
With E*TRADE, options trading will cost you $0.65 per contract starting out.
If you trade more than 30 times within a quarter, that will drop to $0.50 per contract.
If you have more than $250,000 in your account, that will drop it down to $0.50 per contract, too.
Futures contracts will cost $1.50 per contract.
Additional SEC and FINRA fees will apply to these accounts, too.
Robinhood vs. E*TRADE: Accessibility
Both apps can be accessed with Android and Apply smart phones.
You can also log in using your tablet, laptop, or desktop if you need a bigger screen.
Wherever you have Wi-Fi, you have your investments.
Yet another reason for you to get started today!
Robinhood vs. E*TRADE: Which is better?
And the winner is…
It was a really tough call, but E*TRADE’s extra years of experience put them ahead of the pack.
At first glance, it looked like Robinhood would be the winner.
Their app is easy to use and glaringly affordable.
If we just stopped there, the outcome may have been different.
But when it comes to something as important as investing, that’s just not enough.
Robinhood put up a good fight.
They may have won Best for Low Costs but E*TRADE won awards in several other categories.
The most notable: Best for Beginners.
This is exactly what we needed to see from one of these top contenders.
A Best for Beginners award is a tremendous accomplishment.
- Best Stock Trading Apps
- Best for Options Trading
- Best for Roth IRAs
- Best for ETFs
- Best Web Trading Platform
New investors can really benefit from all of the educational tools E*TRADE has to offer.
The additional options may throw you off at first, but they’ll walk you right through it.
The option to open a retirement account on the same app was also a huge plus.
Keeping your accounts together can help simplify the process.
Their spreadsheets and analysis of current data alone make the extra fees worth it.
They’ll help you make the best decisions in your investments.
When you keep it simple and stay informed, you’re more likely to stay motivated.
However, the choice is ultimately yours.
We’ve taken the guess work out of the decision, but you still have to determine which one is better for you.
If you’d rather have just one account option, save money, or invest in cryptocurrency…
…Robinhood may actually be the better option for you.
The points listed above are just a few examples to help get you started.
Both apps are easy to use and help you accomplish your goals.
They’re both worth checking out.
If you’ve already tried one, tell us what you like about it!
Tell us what you don’t like, too.
If you’ve already tried both, tell us which one you like better and why.
Leave a comment below to share your experience with these valuable investment apps.