Fidelity vs. Robinhood: Which Is Best For You? (2024)

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Fidelity and Robinhood are two of the most popular online brokerage platforms available in the market today, despite their pronounced differences.

Originally founded in 1946, Fidelity Investments is one of the biggest global asset managers. Meanwhile, Robinhood is a young fintech startup company that became famous for launching the zero-commissions stock trading revolution.

Both services offer their own distinct advantages for different kinds of investors. It’s important to compare these two leading online brokers to help you decide which platform best fits you.

Fidelity vs. Robinhood: Similarities

Fidelity and Robinhood offer commission-free trading of stocks, exchange-traded funds (ETFs) and options, making them good options for budget-conscious investors. Note that Fidelity does charge a $0.65 fee per options contract, whereas options trading on Robinhood is completely free.

Neither platform has a minimum balance requirement, and you can open an account without any requirement to deposit funds until you’re ready.

FeatureFidelityRobinhood

Zero minimum balance requirement

Commission-free stock, ETFs and options trading

Margin accounts

Real-time price quotes

Access to Level II data

Instant access to funds while waiting for deposits to clear

Well-designed, easy-to-use apps

Extended-hours trading

Fractional share trading

Cash management account option

Fidelity and Robinhood have high-quality investment apps that are easy to navigate and simplfy trading. Ease of use is what made Robinhood famous, and while Fidelity is a more traditional firm their app has won awards for quality.

Both apps provide real-time price quotes, giving you the latest information on your assets. You can access advanced Level II market data if you meet certain requirements—Robinhood Gold offers Level II quotes as part of its $5 a month fee. Fidelity’s advanced Active Trader Pro platform, which features Level II data, is available if you make at least 36 trades in a 12-month period.

Robinhood and Fidelity both offer fractional shares, allowing you to buy partial shares of stock. If you want to trade after-hours when markets are officially closed, you’ll have the chance on both platforms. They both allow margin trading and borrowing money to buy assets.

Lastly, both platforms offer cash management accounts. These types of accounts operate like checking accounts, paying interest on your uninvested cash and providing you with a debit card to make access to your cash easy.

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Fidelity vs. Robinhood: Differences

Here’s what really matters: Understanding the key differences between Fidelity and Robinhood. Robinhood operates more as a quick, no-frills app, whereas Fidelity provides an extensive selection of investment tools and account options. Here are the major differences:

Expert Trading Platform and Research Tools

While Fidelity and Robinhood both offer a decent mobile app, Robinhood lacks an advanced trading platform.

You can download Fidelity’s Active Trader Pro desktop platform to access a full suite of trading and research tools like charting, stock screeners, portfolio analysis and third-party research. It also includes advanced features for serious investors like heat mapping, an AI assistant and multi-leg options trading.

Advanced Trading Features

Fidelity offers several advanced trading features that are absent from Robinhood’s platform. You can trade OTC penny stocks and engage in short selling.

Robinhood does not offer OTC penny stock trading or short selling.

Retirement Accounts

Fidelity supports a wide range of different individual retirement accounts (IRAs).

Both traditional IRAs and Roth IRAs are available, while business owners can opt for a Solo 401(k). If you’re investing in your child’s college education, you could open a 529 education savings account.

Robinhood only provides taxable brokerage accounts.

Cryptocurrency Trading

Crypto is one area where Robinhood shines. Fidelity does not allow you to invest directly in cryptocurrencies and offers only blockchain ETFs and crypto ETFs.

In comparison, Robinhood lets you invest in 17 different cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), and Dogecoin (DOGE). One downside is that you presently cannot withdraw your crypto from Robinhood’s platform to a crypto wallet. (Note that the company has promised to enable this feature by the end of 2022.)

Customer Service

Fidelity’s customer service far exceeds what’s available at Robinhood.

Fidelity offers a 24/7 phone line as well as a live chat. Fidelity also has physical branches throughout the country where you can stop by for help with your portfolio. You can hire a professional investment manager from Fidelity for more hands-on investment support.

Robinhood customer service is limited to phones. You will need to request a callback via the app, and a customer service representative will contact you when they become available.

FeatureFidelityRobinhood

Easy access to customer service

Stock screener tools

Paper trading platform

Retirement accounts

OTC penny stock trading

Short selling

Cryptocurrency trading

Who Should Choose Fidelity?

Fidelity is considered to be one of the leaders in the investment and asset management industry. The company offers zero-commission trades on stocks, ETFs and options, a huge list of in-house Fidelity mutual funds, multiple types of investment accounts and excellent customer service.

Beyond a broad spectrum of products, Fidelity also offers an easy-to-use app for beginners as well as a desktop platform packed with expert research and advanced trading tools for more serious investors. In most situations, you will find what you need at Fidelity.

There are a few downsides. Fidelity does not offer cryptocurrency investing. The company is also missing some features found on other investment platforms, like futures trading and paper trading, where you can practice trading.

Investors who really want the simplest mobile-experience possible may find Robinhood easier to navigate, though keep in mind that the Fidelity app has also won awards for its quality. There aren’t many downsides to Fidelity, which is why this company ranks as one of Forbes Advisor’s best online brokers.

Fidelity Pros

  • Extensive selection of commission-free investments
  • Quality mobile and desktop trading platforms
  • Top-notch research and investment tools
  • Excellent customer service

Fidelity Cons

  • No cryptocurrency trading
  • No futures trading or paper trading
  • Transaction fees for non-Fidelity mutual funds
  • Small per-contract fee for options

Who Should Choose Robinhood?

Robinhood makes investing about as easy as possible. The mobile app is quick to download, set up and fund, allowing you to start making trades almost immediately. In fact, this is a common criticism of Robinhood: It makes investing so easy it feels more like a game than a serious activity.

Still, it’s hard to beat the convenience of the Robinhood app. If you want to invest through your mobile device and don’t need extensive research tools like screeners, you should get what you need from Robinhood. The company offers commission-free trades for all their investments, including cryptocurrency.

The reason Robinhood offers commission-free trades is that it accepts payment for order flow, meaning they process trades through brokers who give them the highest fee, not necessarily the best rate for your investment. As a result, you could be paying more to buy and getting less when you sell investments.

Robinhood is missing several of the investment accounts and trading options found with Fidelity and is also lacking in terms of customer service. You can only request calls, and in-person branches aren’t accessible like Fidelity. Last, Robinhood doesn’t provide as many educational materials as the best online brokers for beginners.

These drawbacks haven’t hurt Robinhood’s popularity, though, especially with the younger smartphone generation. For many investors, the ease of use is worth it.

Robinhood Pros

  • A very easy-to-use investment app
  • No commissions or fees on investments
  • No account minimums
  • Offers cryptocurrency trading

Robinhood Cons

  • Not many investment research tools
  • Earns money through payment-for-order-flow
  • No retirement accounts
  • Limited customer support
Fidelity vs. Robinhood: Which Is Best For You? (2024)

FAQs

Fidelity vs. Robinhood: Which Is Best For You? ›

🏆 Winner: This is a difficult selection since they both offer commission-free stock, ETF, and options trading. Overall, we found Robinhood to have an easier platform to hit the ground running, but if you want mutual funds or bonds, Fidelity would be the better choice.

Is Robinhood better than Fidelity? ›

Robinhood is good for simple trades, while Fidelity's mobile offering is more comprehensive and a better platform when it comes to the complete mobile trade experience.

Should I switch to Fidelity from Robinhood? ›

It is ideal for investors who are new and want to get into the market without the expense of commissions. While Robinhood has been gaining popularity due to its easy-to-use interface and commission-free trading, Fidelity offers a broader variety of investment choices, powerful research tools, and personalized advice.

What is the downside to Fidelity? ›

Fees. Fidelity has average trading and low non-trading fees, including commission-free US stock trading. On the negative side, margin rates and fees for some mutual funds can be high. We compared Fidelity's fees with two similar brokers we selected, E*TRADE and TD Ameritrade.

What should I switch to from Robinhood? ›

Alternatives to Robinhood
  • For beginners: Fidelity.
  • Among investment apps: Acorns.
  • For crypto: Crypto.com.
  • For overall similarity: Webull.
Jan 2, 2024

Why is Fidelity Investments the best? ›

Well-rounded offering: Fidelity Investments offers $0 trading commissions, no account fees that can erode returns, a swath of research offerings and an easy-to-use platform that advanced traders can customize. Mutual funds: Fidelity has a strong reputation for its mutual funds.

Why Robinhood is better? ›

Robinhood has been a leading stock trading platform for years, but its newest updates to the platform have made an already-good app even better. One of the headlining features of Robinhood is its commission-free stock trading, in addition to commission-free options trading and crypto trading in selected states.

Is it safe to keep all my money in Fidelity? ›

Protecting your assets

With our Customer Protection Guarantee, we reimburse you for losses from unauthorized activity in your accounts. We also participate in asset protection programs such as FDIC and SIPC to help provide the best service possible.

How much does Fidelity charge per trade? ›

$0.00 commission applies to online U.S. equity trades, exchange-traded funds (ETFs) and options (+ $ 0.65 per contract fee) in a Fidelity retail account only for Fidelity Brokerage Services LLC retail clients. Sell orders are subject to an activity assessment fee (from $0.01 to $0.03 per $1,000 of principal).

Is Fidelity a good place to keep money? ›

Is Fidelity a safe company to invest with? Yes, Fidelity is one of the safest brokerages to invest with. It's an industry leader with a stellar reputation and fully regulated in the U.S. with the SEC and FINRA, is trusted by over 43 million people and holds over $11.5 trillion in assets under administration.

What happens if Fidelity goes under? ›

If a brokerage fails, another financial firm may agree to buy the firm's assets and accounts will be transferred to the new custodian with little interruption. The government also provides insurance, known as SIPC coverage, on up to $500,000 of securities or $250,000 of cash held at a brokerage firm.

What is the Fidelity controversy? ›

Big Four title firm Fidelity National Financial and its subsidiary mortgage subservicer Loancare are facing a class action lawsuit alleging that they were negligent with customer data and that they breached their contract, after the firm was the victim of a cyber security attack in late-November.

Which trading platform is best? ›

Best Online Brokerage Accounts and Trading Platforms of 2024
  • Best Overall: Fidelity.
  • Best for Low Costs: Fidelity.
  • Best for Beginners: Charles Schwab.
  • Best for Advanced Traders: Interactive Brokers.
  • Best for ETFs: Fidelity.
  • Best for Options Trading: tastytrade.
  • Best for International Trading: Interactive Brokers.

Do people use Robinhood anymore? ›

Over 10 million people use Robinhood as their primary trading platform.

Who should I use instead of Robinhood? ›

Take a look at the top Robinhood alternatives.
  • Interactive Brokers. Read Review. Active and Global Traders. Securely through Interactive Brokers' website. ...
  • Webull. Read Review. Active Traders. ...
  • TradeStation. Read Review. Futures Trading. ...
  • Moomoo. Read Review. Traders of All Levels. ...
  • Public.com. Read Review. Trading Ideas.
Feb 16, 2024

Is it safe to keep all your money in Robinhood? ›

Your securities and cash are protected by SIPC

Robinhood Financial LLC and Robinhood Securities, LLC are both members of SIPC, which protects securities for customers of its members up to $500,000 (including $250,000 for claims for cash) for each investing account, including IRAs.

Why use Fidelity over Robinhood? ›

Fidelity's fee structure is somewhat different, as this platform offers significantly more products and services than Robinhood. Fidelity doesn't charge trading fees or commissions on stocks and ETFs. However, unlike Robinhood, it does charge $0.65 per contract to trade most options.

What is the best trading platform? ›

Compare the Best Online Brokers
BrokerStar RatingFractional Share Trading of Stocks
Fidelity Investments4.8Yes
Charles Schwab4.7Yes
Interactive Brokers4.7Yes
tastytrade4.5Yes
3 more rows

Is Fidelity the best trading platform? ›

Fidelity remains our top overall choice for best online broker as well as our choice as the best broker for low costs and for ETFs this year. In addition, Fidelity earned top ranks as the best broker for cash management, which are new additions to our best online broker and trading platforms awards this year.

Which company is better than Robinhood? ›

Best Robinhood Competitors & Alternatives
NameDeposit and withdrawal methods
UpholdPayPal and Apple pay, Credit/Debit Card Payment
WebullWire Transfer and Bank Transfer.
M1 FinanceBank Deposit, Credit/Debit Card Visa and Mastercard and P2P Trading
PublicBank Deposit, Credit/Debit Card: Visa and Mastercard and P2P Trading
1 more row
May 13, 2024

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