Retail investors have a number of choices when it comes to online brokerages. Three of the main ones are Webull, Robinhood and TD Ameritrade. Comparing and contrasting them reveal significant differences among them. The unique features of each that emerge from a comparison may prompt you to use one over the other two. Let’s compare the fees, platform features and use of these three online brokerage leaders. A financial advisor can help you find an online brokerage platform that suits your skills, interest and specific needs.
What Webull, Robinhood and TD Ameritrade Offer
TD Ameritrade is a decades-old brokerage, founded in 1971. They have educational events at their branches, as well as virtual events, to educate investors. It has more than 11 million client accounts that add up to over $1 trillion in assets. Being large, however, does have its disadvantages. It makes it harder to adapt its business model to changing conditions.
Robinhood is one of the leading online mobile apps. It has a simple interface that is attractive to beginning investors. It also offers a web-based version of the app. Robinhood is growing, but it is still only available in the U.S. and not in all 50 states. It advertises as being a commission-free app, but it does earn money from price spreads and other fees.
Webull has both desktop and mobile apps. It is a low-cost platform with no commission fees for stocks, ETFs, options or cryptocurrency. Beginning investors can certainly use Webull, but it may be more tailored to investors with some investing and trading experience due to the market research offered. Webull is a popular investment platform with a considerable share of the market.
Fees
Robinhood is attractive to younger, less experienced investors because of its low fees. Robinhood advertises no commission trading and no minimum balance for accounts. It also offers commission-free cryptocurrency investing. If you want to open a margin account, however, there is a $2,000 minimum balance required.
The Robinhood Cash Account and Robinhood Instant Account are both free but offer slightly different options. If you want to upgrade, you can use the Robinhood Gold Plan which costs $5 per month. The Gold Plan has the same basic features as the Instant Plan except that it also comes with premium features. One of the premium features is that you will have access to detailed stock reports and other investing material from companies like Morningstar. Robinhood offers very little educational material itself.
Robinhood does have some hidden fees you should consider. It assesses trading activity fees (TAFs) of $0.000145 per equity share and $0.00244 per option sale. The fee totals a maximum of $7.27. If you want to transfer your account to an existing brokerage, there is a $100 charge. Paper confirmations and paper statements are $2 each.
Webull is similar to Robinhood since it also offers no commission trading and no minimum balance for accounts except a $2,000 minimum balance requirement for margin accounts. Webull’s margin rates start at 9.49% and go down from there. They also have a TAF of $0.000145 per share for sells only and a $7.27 maximum per trade.
TD Ameritrade offers no commission trading and no minimum account balances. It also offers a wide variety of trading options. They also assess a $0.000145 TAF for equity shares and $0.00244 for options contracts. There is a charge for futures and options trading. Each futures contract is $2.25 each and options contracts are $0.65 each. You do have the option to talk to a live broker by phone and that cost is $25, in addition to the $0.65 fee per contract. TD Ameritrade is usually attractive to more experienced investors. TD Ameritrade offers two mobile apps and one desktop app.
Platform Features and Use
Robinhood and Webull are both relatively new mobile trading apps while TD Ameritrade has been in business for decades. Robinhood and Webull are more attractive to newer and younger investors due to the cost and interests of the audience. You can also trade fractional shares on both platforms. TD Ameritrade does not offer fractional share trading. Robinhood has a very attractive platform to young investors, but it offers very little research. It may not be suited to medium to advanced investor’s tastes for this reason. TD Ameritrade offers a wealth of research on their ThinkorSwim platform that is important to medium to advanced investors. Webull also offers significant market research to investors.
Both Webull and Robinhood support cryptocurrency although Robinhood only supports buying relatively few types of coins and you cannot exchange your cryptocurrency for other types of investments. Webull supports both buying and selling crypto, but its selection of coins is even more limited than Robinhood’s. If you want the full functionality of trading crypto, Webull is a better bet than Robinhood. TD Ameritrade does not support trading in cryptocurrency.
Robinhood and Webull do not offer a full line of investment securities. Robinhood offers stock, options, ETFs, ADRs and limited cryptocurrency. It does not offer preferred stock or debt securities. Webull offers stocks, options, ETFs and cryptocurrency. Like Robinhood, Webull does not offer preferred stock or debt securities investing. TD Ameritrade is a full-service brokerage offering everything but cryptocurrency. The only platform offering mutual fund investing is TD Ameritrade. Robinhood offers a cash management account.
Webull and Robinhood both offer signup bonuses of free stock. TD Ameritrade does not. Webull and TD Ameritrade offer retirement accounts while Robinhood does not. Customer support at TD Ameritrade is excellent while it is very limited at both Webull and Robinhood.
Bottom Line
Each of these online brokerages, Webull, Robinhood and TD Ameritrade, is strong in many areas. Each one attracts different types of investors due to the variations in investment instruments, costs, benefits and other factors.
Tips on Investing
- Picking an online brokerage should match your goals, familiarity with investing, timeline and risk profile. A financial advisor can help you find a suitable online brokerage. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors in your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor, get started now.
- If you are a frequent trader, you may want to keep a close eye on your capital gains tax. SmartAsset’s capital gains calculator will help you do that.
- Asset allocation is important in reaching your investment goals. SmartAsset’s asset allocation calculator can help keep your portfolio aligned with your personal investing goals.
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