Choosing an investing platform may seem impossible with all of the options you have today. Some brokerages focus on offering as many options as possible while others focus on a few more popular investment types.
Both TD Ameritrade and Robinhood offer the most popular investment types, but they focus on meeting their customers’ needs in different ways. Robinhood focuses on helping younger investors start investing, while TD Ameritrade works to provide their customers with a wide range of in-depth tools, research, and investment options.
Robinhood vs. TD Ameritrade summary
You can open a brokerage account with both Robinhood and TD Ameritrade. TD Ameritrade is a more traditional brokerage. Robinhood is one of the newer app-focused brokerages.
Both companies are regulated but take different approaches to offer value to their customers.
|Trade fee||$0||$0 for stocks, ETFs, and no-transaction-fee mutual funds with online purchases. Other transaction types or broker-assisted trades may have trade fees.|
|Margin rates||$5 per month for first $1,000 – 2.5% after that||7.5% to 9.5% (varies based on a base rate and dollar range)|
|Tradable assets||Stocks, ETFs, options, cryptocurrency||Stocks, options, ETFs, mutual funds, futures, forex, managed portfolios, cash management, bonds, CDs, annuities|
|Platforms||iOS, Android, Web||Web, Desktop, iOS, Android|
|In-app analytics||Morningstar ($5 per month Robinhood Gold subscription required)||Many powerful tools and charts depending on the platform you choose|
Robinhood launched in 2016 to help change how people invest. It was one of the first companies to offer no-fee trades, other than the regulatory fees everyone must pay. Robinhood allows you to invest in common investment options including stocks, ETFs, and even cryptocurrency.
Robinhood’s investing style requires you to pick your investments and doesn’t offer portfolios that they manage on your behalf. This can be daunting for new investors but can be viewed as a benefit for those that want more control over their investments.
In addition to commission-free trades, Robinhood also has helped make fractional share investing more popular. This means you can buy an investment in a company without needing enough money to buy a whole share. Now, anyone can invest in a company with a $1,000 plus stock price with just a few bucks.
Advertiser Disclosure – This advertisement contains information and materials provided by Robinhood Financial LLC and its affiliates (“Robinhood”) and MoneyUnder30, a third party not affiliated with Robinhood. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Securities offered through Robinhood Financial LLC and Robinhood Securities LLC, which are members of FINRA and SIPC. MoneyUnder30 is not a member of FINRA or SIPC.”
About TD Ameritrade
TD Ameritrade traces its roots back to 1975 when it started as First Omaha Securities, Inc. Over the decades that followed, the company merged with other companies and has grown into the TD Ameritrade we know today. Currently, TD Ameritrade services over 11 million client accounts with over $1 trillion in assets.
TD Ameritrade offers a huge variety of investment options. They provide no commission trade options for many more common investments, such as stocks, ETFs, and mutual funds. They also allow you to invest in other offerings such as bonds, annuities, IPOs, forex, and futures.
TD Ameritrade’s massive size allows them to provide a wide variety of detailed investing tools, too. They offer several trading platforms including web-based, desktop-based, and app-based. The platforms provide a variety of tools and information to help you make informed trades.
Robinhood vs. TD Ameritrade investment performance
Will you get better investment performance from a Robinhood account or a TD Ameritrade account? That’s a trick question there is no answer to. Comparing brokerages isn’t like comparing the investment potential with a single stock. Both firms offer many investment options. Your returns will depend on which of those options you choose and how you invest in them over the long term.
Both firms offer commission-free trades on the most common types of investments, but regulatory fees must be paid no matter which brokerage you use. This puts both firms on equal footing as far as most fees go.
If you decide to trade on margin, which may not be the best option for beginners, the firms have different fee structures. Robinhood charges $5 per month for their Gold service, which provides access to 30 days of margin on up to $1,000. Then, you must pay 2.5% for any margin of over $1,000. TD Ameritrade charges 7.5% to 9.5% based on the dollar amount and may change as the interest rate markets change.
Robinhood investment options
Robinhood sticks to some of the more mainstream investment options by offering:
- Cryptocurrency trading.
Robinhood doesn’t offer special account types, such as retirement accounts or managed accounts.
TD Ameritrade investment options
TD Ameritrade offers a massive number of investment options. These include:
- Mutual funds.
- Managed portfolios.
- Cash management.
You can choose your investments yourself or, if you’d prefer, you can use their managed portfolios service. The managed portfolios service offers three levels of options depending on the amount of money you have set aside. The smallest level starts at $500 with a 0.30% fee and the highest level begins at $250,000 with fees that vary based on your portfolio and investment amount.
Robinhood vs. TD Ameritrade investment performance summary
Neither company has better investment performance than the other. Instead, you should focus on picking the company that provides the investment options you’re interested in, along with the tools you need to be a successful investor. Consider your goals and investing style to help make the decision easier.
Robinhood vs. TD Ameritrade pros
- Simplified investing for new investors – Robinhood doesn’t overwhelm you with every investment type available and instead sticks to stocks, ETFs, options, and cryptocurrency.
- Most popular investment options available – Most new investors will likely invest in stocks or ETFs, so they have the most popular options available for beginner investors.
- A leader in fee-free trades – Robinhood was one of the first companies to offer commission-free trades, which shows they’re on the brokerage industry’s leading edge.
TD Ameritrade pros:
- A massive number of investment options – TD Ameritrade offers most major investment types an average person would want to invest in at any point in their lives.
- Both individual investment picking and managed portfolios available – With TD Ameritrade, you have the option of whether you want to pick your investments yourself or pay them to manage your portfolio for you with their managed portfolio services.
- Detailed investing tools and platforms – The company offers four platforms you can use to invest with several investing tools depending on your needs.
Robinhood vs. TD Ameritrade cons
- A relatively new company – Robinhood is only a few years old compared to major brokerages that have been around for decades.
- Not as many investment options – If you want to invest directly in bonds, annuities, forex, CDs, or managed portfolios, Robinhood doesn’t offer those options.
- Not as many tools – TD Ameritrade provides many tools, platforms, and research options while Robinhood only includes Morningstar research with a paid Gold subscription.
TD Ameritrade cons:
- Analysis paralysis – You have so many potential options when investing with TD Ameritrade that you may get stuck analyzing forever and never start investing.
- It may be too complicated for beginner investors – TD Ameritrade’s platforms have tools for advanced investors that may be too complex for someone starting to invest.
- Huge companies move slower – As a giant brokerage firm, they won’t be on the cutting edge of the latest trends and may react slower to significant changes in the brokerage firm world.
Why choose Robinhood
Easy to get started
Robinhood is focused on making it easier to start investing and has built its platform around this. For this reason, Robinhood could be the better choice if you want to start investing quickly.
Can invest in cryptocurrency directly
While TD Ameritrade allows you to invest in cryptocurrency futures, Robinhood enables you to invest directly in some cryptocurrencies. If this is important to you, Robinhood is the clear choice.
More likely to stay current faster
As a company founded on disrupting the traditional brokerage firm world, Robinhood is more apt to stay up to date on current trends or even create them. This can help you stay up to date and have access to the latest investing options.
Why choose TD Ameritrade
An established company that has served clients for decades
TD Ameritrade has withstood the test of time after serving its clients for decades. Their long track record shows you what you can expect from their company, which should ease your mind.
Detailed platforms with plenty of investing tools
If you’re looking to dig into the weeds to find good investment options, TD Ameritrade’s four platforms and detailed tools can help. They also offer educational resources to help you maximize your investments.
More investment options
TD Ameritrade simply has more investment options available than Robinhood. This can be useful as you grow as an investor. You won’t likely have to switch to a different brokerage because you suddenly need access to a new investment type you didn’t consider as a beginner investor. Chances are, TD Ameritrade offers it.
Robinhood and TD Ameritrade are both solid investing platforms you can use to start investing. They both offer commission-free trades on popular investment options and have a wide variety of investments to choose from.
Ultimately, you’ll have to decide which better meets your needs. Robinhood is easier for a new investor to get started with as long as they want to pick their investments. TD Ameritrade provides a more in-depth brokerage service for the long-term investor and provides managed portfolios for those that would rather let someone else take the reins.