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Robinhood vs. TD Ameritrade vs. Fidelity: Fees & Features

·7 min read
robinhood vs td ameritrade vs fidelity
robinhood vs td ameritrade vs fidelity

When comparing Robinhood to TD Ameritrade and Fidelity, the differences are immediately obvious. While Fidelity and TD Ameritrade are two full-service brokerage firms that offer ample resources to investors, Robinhood is an app-based trading platform with limited information about the securities available for trade. If you want more hands-on help building your investment portfolio, you should consider working with a financial advisor who can allocate your assets and manage your whole portfolio or simply offer insight and guidance.

Overview of Robinhood vs. TD Ameritrade vs. Fidelity

Robinhood, TD Ameritrade and Fidelity each offer investors an opportunity to build their portfolios with limited trading fees. As an investor looking for a streamlined way to learn about stocks while you make straightforward trades, Robinhood has a lot to offer. However, both TD Ameritrade and Fidelity outshine Robinhood regarding the amount of information available within the platform. You can conduct detailed research within either platform, but that’s simply not possible within Robinhood’s basic account setup.

Additionally, you’ll find more help from customer service if you opt for TD Ameritrade of Fidelity. If you want more options for help along the way, including with a robo-advisor or human advisor, the more robust features offered by these brokerage firms stand apart from Robinhood. Let’s break down each cost and the most important features of each option to see which might be best for you.

Trading Platform Fees

The fees for any broker or investment advisor are one of the most important considerations when choosing what firm to work with. It’s important to pay close attention to the fees you’re being charged, before deciding to move forward with the relationship, because you could end up losing much of what you earn in your investments if you don’t understand how you’re charged.

Robinhood Fees

Robinhood made a reputation for itself when it splashed onto the scene offering the ability to make trades for nothing through the app. Users can make commission-free trades for all U.S. securities, such as stocks, options and ETFs. However, the company still has to make its money from somewhere. It charges customers who upgrade to Robinhood Gold $5 per month.

But not everything is how it appeared with Robinhood. The Securities and Exchange Commission publicly said in December 2020 that “Robinhood’s selling points to customers [between 2015 and late 2018] was that trading was ‘commission free,’ but due in large part to its unusually high payment for order flow rates, Robinhood customers’ orders were executed at prices that were inferior to other brokers’ prices.” Although Robinhood would not confirm or deny the allegations, it did agree to pay a civil penalty to the tune of $65 million.

TD Ameritrade Fees

TD Ameritrade offers the ability to make online trades for free. But broker-assisted trades cost $25 and placing orders over the phone costs $5. Additionally, some mutual fund trades involve a $50 trading fee and you’ll pay $0.65 per online options contract.

Fidelity Fees

Last but not least, Fidelity also avoids charging fees or commissions when trading stocks or ETFs online. But you’ll pay a $5 fee when trading over the phone and a $33 fee for a broker-assisted trade.

Services and Features

robinhood vs td ameritrade vs fidelity
robinhood vs td ameritrade vs fidelity

Services and features are important to any investor because this is the value that you’re receiving. If one of the options lacks certain features then it could prevent you from getting what you need.

Robinhood Services and Features

Robinhood offers users a streamlined trading platform on its straightforward app. Although you can make trades on a desktop version of Robinhood, the experience is more enjoyable on the app. The modern platform is designed with new investors in mind. As a new investor, you’ll appreciate how easy Robinhood makes it to execute trades.

It’s easy to buy and sell the assets available within the app, which includes select cryptocurrencies, but there aren’t too many other things you can do within Robinhood’s platform. You won’t find many resources to help you build out your knowledge before making a trade. The lack of additional data and technical analysis tools could be a dealbreaker for some. But as a new investor, you might prefer the bare-bones approach to prevent being overwhelmed.

At the moment, Robinhood offers margin accounts and cash accounts to investors. The types of accounts is lacking compared to both TD Ameritrade and Robinhood.

TD Ameritrade Services and Features

TD Ameritrade provides a full-service brokerage platform to investors through both an app and desktop option. You’ll have access to a wide range of assets through TD Ameritrade, but cryptocurrencies aren’t yet available.

When working with TD Ameritrade, you’ll find plentiful information and analytical tools to help make decisions about stocks. If you prefer individualized advice, you can work with a robo-advisor if you have at least $5,000 and are willing to pay a 0.30% annual fee. Finally, you can speak to an investment advisor, but that option comes at an additional cost.

TD Ameritrade offers a number of account types such as margin, cash, IRAs, 529s, custodial accounts and more. This is many more options than Robinhood but is in line with Fidelity’s offerings.

Fidelity Services and Features

Fidelity also offers ample information to assist with your investment decisions. You’ll even have the option to create custom data sets when making decisions for your portfolio. Fidelity offers advice through a robo-advisor service called Fidelity Go, but you’ll pay a $3 monthly fee for balances between $10,000 and $50,000 or 0.35% on assets under management if you have more than $50,000 in the account.

Fidelity offers a robust amount of account types that include most of the same types of accounts that TD Ameritrade offers. Again, this is a greater selection than Robinhood offers.

Fidelity shines with its customer service offering. You can call its customer service 24 hours a day, seven days per week. You can also ask the AI virtual assistant for virtual guidance at any time of day or night. Lastly, you can chat with Fidelity’s live team online seven days per week during select hours.

Which Investment Firm Should You Choose? 

Robinhood shines for new investors that want to start making trades as quickly as possible. It’s especially useful to investors who want to make fast trades on the go. But you won’t find too much in the way of analysis tools or have the option to reach out to a built-in advisor for help.

Although TD Ameritrade offers a slower pace than Robinhood, its extensive investment tools, plentiful account types and a large number of asset classes make it a more robust option than Robinhood.

Finally, Fidelity offers both new investors and old-timers the tools they need for success. Instead of streamlining past the important parts of stock analysis, Fidelity offers all of the tools you’ll need to make informed stock choices. And you won’t have to pay trading fees for the privilege. Additionally, you can reach out for help in the form of a robo-advisor or human advisor when you need it.

Bottom Line

robinhood vs td ameritrade vs fidelity
robinhood vs td ameritrade vs fidelity

Robinhood’s streamlined app that draws in new investors might not offer enough features for inexperienced investors to make the right choices for their portfolios. Both TD Ameritrade and Fidelity offer more robust features to help you build your portfolio efficiently. The right choice for you will depend on your unique needs and what you’re wanting your partner to help you with.

Tips for Investing

  • Although you can build an investment portfolio on your own, sometimes seeking help from a professional is the right move. It doesn’t have to be difficult to find a financial advisor who can help you manage your assets. SmartAsset’s free tool matches you with up to three financial advisors who serve 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 who can help you achieve your financial goals, get started today.

  • If you choose to go ahead with investing on your own, use the free resources SmartAsset offers. For example, our free asset allocation calculator can help you nail down the right strategy for your situation.

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The post Robinhood vs. TD Ameritrade vs. Fidelity appeared first on SmartAsset Blog.