Robinhood vs Interactive Brokers: Compare Features
Interactive Brokers | Robinhood | |
|---|---|---|
Investing Options | Full Access To Almost Any Asset | Over 5,000 securities, most U.S. stocks and ETFs listed on U.S. exchanges |
Investing Types | Stocks, Options, Futures, ETFs, Crypto, Bonds & CDs, Margin, Mutual Funds, Hedge funds, Forex, Commodities | Stocks, Options, Futures, ETFs, Crypto, Margin, Fractional Shares |
Automated Investing | Yes | No |
Paper Trading | Yes | No |
IPO Access | No | Yes |
Dedicated Advisor | No | No |
However, where Robinhood shines is in its approachability and mobile app experience, making self-directed investing accessible on the go.
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Self Investing And Fundamental Analysis Options
Interactive Brokers is our winner when it comes to self-investing due to its broader investment types, access, and analysis options.
IBKR is a powerhouse for both new and experienced investors. Investors can trade stocks, options, futures, forex, bonds, ETFs, and mutual funds, along with access to global markets in over 150 countries.
IBKR also provides a vast selection of global markets and asset classes, offering unmatched access for those interested in international investing.
Furthermore, IBKR’s research tools, including the IBKR Global Analyst and PortfolioAnalyst, allow for deep dives into financial data, which is invaluable for meticulous fundamental analysis.
Robinhood excels in simplicity and ease of use, making it ideal for newer investors who want a straightforward, commission-free trading experience.
Its platform is highly intuitive, with user-friendly charts and basic fundamental data that are easy to navigate, making stock analysis accessible to everyone.
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Trading Options And Technical Analysis Tools
Interactive Brokers is our winner when it comes to trading options and tools for traders, as it offers more advanced tools than Robinhood. However, the Robinhood user interface is much more comfortable.
Robinhood also offers basic technical analysis tools, including charts and indicators like moving averages, but these features are relatively limited in scope.
Its trading interface is clean and straightforward, allowing users to execute trades quickly.
In contrast, IBKR stands out with its Trader Workstation (TWS), which is designed for the advanced trader with over 100 technical indicators are available, including moving averages, Bollinger Bands, RSI, MACD, and more, enabling traders to conduct in-depth analysis of market trends.
The platform also supports advanced charting features like backtesting, which allows traders to test their strategies against historical data to evaluate their effectiveness.
Additionally, TWS offers real-time data feeds and pattern recognition tools that can automatically detect chart patterns like head and shoulders, triangles, and trendlines, helping traders identify potential trading opportunities.
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Robo Advisor And Automated Investing
Only IBKR offers robo advisors at this moment.
IBKR’s automated investing service, Interactive Advisors, caters to investors who desire more customization and control, even within a robo-advisor framework.
Interactive Advisors offers a variety of portfolios that are color-coded by risk level and investment style, allowing investors to choose from a wide range of strategies, including socially responsible and income-generating portfolios.
The entry point is low, with a minimum investment of just $100, and fees range up to 0.75% depending on the portfolio.
Robinhood doesn't actually offer a robo-advisor or automated investing options, which means users must manually select and manage their investments.
This makes Robinhood better suited for those who prefer hands-on control of their portfolios or are more interested in active trading rather than automated, long-term investing.
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Retirement Accounts
Robinhood offers a straightforward approach to retirement investing, making it easy for users to open traditional, Roth, or rollover IRAs.
One of Robinhood's standout features is its IRA match, even for non-employer plans. This match, which can go up to 3% for Gold members, is a unique offering that adds extra value to retirement savings, especially for those just getting started.
Interactive Brokers (IBKR) offers a variety of Individual Retirement Account (IRA) types, including Traditional, Roth, SEP, SIMPLE, and Inherited IRAs. These accounts are available in either cash or margin formats.
IBKR surpasses Robinhood in the variety of account types and investment options, making it better suited for investors looking for a more sophisticated and customizable retirement strategy.
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Fees
When it comes to fees, there is no clear winner – both Robinhood and IBKR are considered among the cheapest brokers in the industry.
Robinhood is known for its commission-free trading, making it a cost-effective option for those who want to trade stocks, ETFs, and cryptocurrencies without incurring fees. However, there is a monthly fee to leverage your options with Robinhood Gold.
While Interactive Brokers is not always commission-free, it offers very low trading fees, particularly for active traders. IBKR provides both tiered and fixed pricing models, which can be more cost-effective for high-volume traders or those dealing in international markets.
Robinhood | Interactive Broker | |
|---|---|---|
Fees | $0 – $6.99
$0 for basic account, $6.99 for Robinhood Gold | 0% – 0.75%
$0 online commission on U.S. listed stocks and ETFs, Options: $0.15 – $0.65 per-contract, Futures: $0.25 – $0.85 per-contract. For Interactive Advisors: asset-based management fees of 0.10% to 0.75% |
When it comes to Robo Advisory, the Interactive Brokers fee depends on the chosen portfolio and can be anywhere between 0.10% to 0.75%.
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Cash Management And Savings Rates
When it comes to banking options, only Interactive Brokers offers cash management accounts. Both brokers offer competitive rates on uninvested cash (you should have Robinhood Gold to get the high rates).
Robinhood | IB Universal Account | |
|---|---|---|
Savings APY | 1.00% – 4.50%
You’ll earn 0.01% Annual Percentage Yield (APY) as a Robinhood Gold member on your uninvested brokerage cash that is swept to the banks in our program. | 3.83%
There will be no interest paid on the first USD 10,000 of cash. Accounts with NAV less than 100k earn a proportional rate |
IBKR’s Universal Account offers a more investment-focused approach with its cash management features. While IBKR provides a Bank Deposit Sweep Program with FDIC insurance up to $2.5 million, it is primarily designed for investors who want to maximize their uninvested cash within a trading context.
Robinhood customers can earn competitive interest rates on uninvested cash, and the funds are FDIC-insured through partner banks.
The Robinhood Cash Card also provides everyday rewards, making it appealing for users who want to earn while they spend, with features like 5% cash back on travel booked through Robinhood's portal.
Bottom Line
While Robinhood is an excellent choice for beginner and casual investors, Interactive Brokers is better suited for experienced and active traders or investors looking for a wide range of investment options. Both brokers are known for their cheap fee models.
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