Robinhood vs Webull vs TD Ameritrade
If you’re new to the world of investing, you might want to consider starting out with a commission-free trading platform. This way, you can buy and trade stocks on the cheap while learning as you go. To help you decide, here’s a look att three of the most well-known trading platforms online: Robinhood, Webull, and TD Ameritrade.
- Summary of Robinhood, Webull, and TD Ameritrade
- Is Robinhood good for beginners?
- Can you actually make money on Robinhood?
- What’s the downside to Robinhood?
- Is Webull legitimate?
- Is Webull really free?
- Does Webull check your credit?
- How much does it cost to open a TD Ameritrade account?
- Does TD Ameritrade charge a monthly fee?
- Is TD Ameritrade good for beginners?
- The bottom line
About each brand
Robinhood is a free-trading mobile app that gives users the ability to trade stocks, options, and exchange-traded funds (ETF). The platform also offers cash management accounts and cryptocurrency trading. Its account minimum is $0 and new account users are offered one free stock just for signing up.
The platform also offers a Gold account that starts at $5 per month. According to the Robinhood website, the Gold account gives users access to research from Morningstar, Nasdaq, and Nasdaq TotalView level II Market Data.
Robinhood is available for both iOS and Android devices and it’s completely free to create an account. To use the app, users are required to enter their social security number, date of birth, citizenship status, mailing address, and bank account information. For those who prefer a desktop experience, Robinhood also offers a web-based version of its app.
Webull is a low-cost, easy-to-use platform that offers users $0 trades on stocks and ETFs. The platform also provides $0 option trades and allows users to buy or sell cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), and Litecoin (LTC), at a $1 minimum.
What’s more? Webull doesn’t require users to have a minimum account balance, either. However, customers who want to short stocks are required to open a margin account, which has a minimum deposit of $2,000.
New account-holders must be 18 years or older to complete the sign-up process. New users are also asked to enter their social security number, mailing address, financial information (including their net worth and annual income), marital status, and gender. Webull is available on both desktop and mobile and provides users with a high-level view of the market, in addition to news headlines and consolidated analyst ratings.
TD Ameritrade offers low prices, educational tools, an easy-to-use interface, and advanced investor options. Since its launch in 1975, TD Ameritrade has become a popular option for investors with more than 11 million funded broker accounts and more than $1 trillion in client assets.
TD Ameritrade provides investors with a variety of trading choices, including common stock, preferred stock, bonds, mutual funds, ETFs, options, and money market accounts. In addition to offering a number of investment options, TD Ameritrade has more than 100 branch offices in the US.
With TD Ameritrade, there’s no minimum opening deposit required. TD Ameritrade doesn’t charge commission fees on online stock, option, or ETF trades, either. This broker also offers two mobile apps (in addition to its desktop-based platform) making it easier for users to trade on the go.
- Account minimum. With Robinhood Instant, there are no account minimum and zero commission fees to buy or sell stocks, ETFs, or options—regardless of how much money a user intends to invest. Users who’d like to open a Gold account, however, are required to have a minimum balance of $2,000. Gold account-holders are also asked to pay $5 per month to keep their Gold subscription active.
- Protection. Robinhood Financial and Robinhood Securities are members of SIPC, which protects securities customers of its members up to $500,00. This includes up to $250,000 for claims for cash. According to the company’s website, Robinhood also provides its brokerage customers with “excess of SIPC coverage” via underwriters at Lloyd’s of London.
- Fractional shares and recurring investments. Robinhood now has fractional shares, which means users can pay as little as $1 for a portion, or a “fraction,” of a share. Yes, even if that specific share’s full price is in the hundreds. Fractional shares make it easier for account-holders to build a diversified portfolio, even if they’re low on funds.
- Extended hours. Webull offers a trading solution for aspiring investors with full-time jobs: extended hours. Webull begins its extended hours trading at 4 a.m. EST until the market opens (9:30 a.m. EST). Then, from the market close (4 p.m. EST) to 8 p.m. EST. This means Webull customers have the opportunity to start trading nearly five hours before the opening bell and four hours after the market closes.
- Analysis tools. For those who need trading advice, Webull provides users with “intuitive and powerful” charts and graphs on one, easy-to-use interface.
- Margin trading. Margin accounts are available to Webull users at no extra cost. To open a margin trading account, users are required to have a minimum balance of $2,000. According to the Webull website, with a margin account, users may have up to 4x day trade buying power and 2x overnight buying power. Account-holders who have $25,000 or more in their margin account meet the criteria to be a pattern day trader, which means unlimited day trades.
TD Ameritrade’s features
- Educational resources. TD Ameritrade is ideal for newbies and seasoned investors alike thanks to its up-to-date educational resource hub, which includes market news, webcasts, in-depth articles, and how-to guides on how to shape your path as a smart investor. What’s more? TD Ameritrade provides users with in-person educational seminars.
- Mobile experience. TD Ameritrade gives users the option to use two apps. The TD Ameritrade Mobile App is a basic app that allows account-holders to trade stocks, ETFs, and options, explore TD resources, and set up price alerts. While the thinkorswim Mobile App allows users to do everything that they can with the TD Ameritrade Mobile App in addition to the option to participate in live text and screen sharing with trade specialists and access to multi-leg options, stocks, futures, forex, and 24/5 trading.
- Commission-free trading. TD Ameritrade offers users a commission-free investing experience, which means $0 commissions on online stock, ETF, and options trades for new and existing customers.
Summary of Robinhood, Webull, and TD Ameritrade
|Header||Account minimum||Stock trades||Options trades||Account fees|
|Robinhood||$0/$2,000 for Gold Account||$0||$0||No annual, inactivity, or ACH transfer fees (Gold Account costs $5 per month)|
|Webull||$0/$2,000 for margin accounts||$0||$0||No annual or inactivity fees|
|TD Ameritrade||$0/$2,000 for margin accounts||$0||$0||No annual or inactivity fee|
Costs and fees
Although Robinhood offers commission-free trading, other fees may apply. Here’s a brief summary of Robinhood’s “hidden” fees:
- Robinhood charges $75 to transfer an account to competing brokerage firms via the Automated Customer Account Transfers System (ACATS).
- Paper statements are $5 each and paper confirmations are $2.
- If an account-holder finds that their account has been restricted, there’s a $10 surcharge per trade.
- Robinhood Gold account-holders are required to pay a monthly subscription fee of $5. Gold members must have a minimum balance of $2,000.
- There’s a Trading Activity Fee (TAF) of $0.000119 per share (equity sells) and $0.002 per contract (options sells). This fee is rounded up to the nearest penny and caps out at $5.95.
Similar to Robinhood, Webull offers $0 commission trading with no minimum balance requirement. Even so, that doesn’t mean Webull is completely fee-free. Here are some of the fees Webull charges:
- Webull users with a margin account must have a minimum account balance of $2,000. Webull’s margin rates start at 6.99% and grow from there. For margin rates, visit Webull’s pricing chart.
- There’s a TAF of $0.000119 per share (sells only) with a $0.01 min and a $5.95 max per trade.
- Users are offered one free wire transfer. After that, wiring less than $25,000 costs $8 per domestic wire and $12.50 per international wire.
TD Ameritrade offers $0 commission trading, no minimum account balance, and a variety of trading options. Here are a few things TD Ameritrade does charge for:
- Using a live, human broker via the telephone will cost you $25.
- Options trades impose an additional $0.65 per contract.
- Futures contracts are $2.25 each.
- There’s a TAF of $0.000119 per equity share and $0.002 per options contract.
Pros and cons
Robinhood pros and cons
- With Robinhood, there’s no account minimum.
- Robinhood can be used via desktop or mobile. (It’s also super user-friendly!)
- Robinhood offers cryptocurrency trading.
- Users are given the option to open a cash management account that includes a Mastercard debit card. (There are no account minimums, transfer fees, and no foreign transaction fees.)
- Robinhood gives users the ability to buy fractional shares as small as 1/1000000 of a share.
- The Robinhood app may be unreliable, according to recent stats.
- Unlike TD Ameritrade, Robinhood has minimal educational tools/data available.
- With Robinhood, users can only open one type of account: a taxable brokerage account.
- Robinhood doesn’t support mutual funds, preferred stocks, or offer retirement accounts.
Webull pros and cons
- Webull doesn’t require an account minimum, annual fee, or inactivity fee.
- With Webull, users have access to cryptocurrency.
- Webull gives users the option to open a free IRA.
- There’s a trading simulator that allows users to “trade” risk-free.
- Some users may experience “information overload” with Webull.
- Webull doesn’t offer fractional shares.
- Webull does not support mutual funds.
TD Ameritrade pros and cons
- With TD Ameritrade there’s no account minimum.
- TD Ameritrade offers tons of free research and educational materials for beginners to seasoned investors.
- TD Ameritrade has phenomenal customer support.
- Users can choose to use one or both mobile apps.
- TD Ameritrade is available on desktop and mobile.
- There’s no annual or inactivity fee.
- TD Ameritrade offers a variety of tradable securities, including stocks, bonds, mutual funds, ETFs, options, futures, forex, etc.
- New users may feel overwhelmed by the number of resources and educational tools.
- TD Ameritrade charges $25 for broker-assisted trades (stocks and ETFs).
- TD Ameritrade’s thinkorswim app may be overwhelming for new traders.
- TD Ameritrade has expensive margin rates.
Is Robinhood good for beginners?
Robinhood is a commission-free trading platform that makes it easy for anyone to invest, even beginners.
Can you actually make money on Robinhood?
Yes, you can make money with Robinhood investments. If you’re a new investor, however, it will be more difficult for you than it would be for a seasoned professional. To ensure that you’re getting the most out of your Robinhood experience you should do your research and take advantage of the site’s resource library.
What’s the downside to Robinhood?
Although Robinhood is free to use, the platform has limited options when it comes to account types. For example, Robinhood doesn’t support mutual funds, preferred stocks, or offer retirement accounts.
Is Webull legitimate?
Yes, Webull is a legitimate company. It’s a commission-free trading app that allows active traders to invest in thousands of companies. According to the Webull website, Webull Financial LLC is registered with and regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
Is Webull really free?
Yes! Webull is a free trading platform. There are no commission fees for trading stocks, ETFs, and options.
Does Webull check your credit?
Webull may run a soft inquiry on your credit for background check purposes.
How much does it cost to open a TD Ameritrade account?
There’s no minimum to open a TD Ameritrade account. Users who plan to open a margin account, however, must deposit a minimum of $2,000.
Does TD Ameritrade charge a monthly fee?
No, TD Ameritrade does not charge a monthly fee.
Is TD Ameritrade good for beginners?
TD Ameritrade is ideal for beginners as it provides tons of educational resources and research tools. It’s also free and easy to use!
The bottom line
Comparing online brokers isn’t an easy task, but hopefully, this mini-review will help you make an informed decision. Remember: it’s important to do research on your own to ensure that the brokerage you choose will meet your investing needs and goals.
If you’re still on the fence, all three of the options above can be taken for a test drive free of charge.