There are a lot of differences between Charles Schwab and Robinhood. For one, Charles Schwab is a full-service brokerage, while Robinhood is a discount broker. This means that with Charles Schwab, you'll get access to things like investment advice and guidance, while with Robinhood you'll be on your own when it comes to making investment decisions.
The similarity is in the fees charged. Charles Schwab and Robinhood do not charge commissions for stocks and ETFs. But Robinhood is mostly app based while Charles Schwab has Desktop and mobile platforms.
Finally, there's the matter of customer service. Charles Schwab has a large staff of customer service representatives who can help you with anything you need, while Robinhood's customer service is much more limited.
So, from both the online brokers, which one is better? That's what we are going to talk about in this comparison article on AtoZ Markets.
Overview of Charles Schwab
Charles Schwab is one of the largest brokerages in the United States. It was founded in 1971 and today has more than $3 trillion in assets under management. Charles Schwab offers a full suite of investment products and services, including stocks, bonds, ETFs, mutual funds, and more. It also offers banking services, such as checking and savings accounts.
Charles Schwab has more than 500 branch locations across the country, so it's easy to get face-to-face help if you need it. The brokerage also has an excellent online platform and mobile app, so you can access your account and make trades from anywhere.
Charles Schwab is a great choice for investors who need hand-holding and guidance. The brokerage offers a lot of resources, including investment advice, educational articles and videos, and more. The downside is that Charles Schwab charges commissions for trades, which can add up if you're an active trader.
Overview of Robinhood
Robinhood is a newer brokerage that was founded in 2013. It has quickly become popular with young investors, thanks to its commission-free trading and simple platform. Robinhood does not offer much in the way of investment products or services, but it's a great choice for investors who want to trade stocks without paying commissions.
Robinhood has a very limited customer service operation, so it's not the best choice if you need hand-holding or guidance. But if you're comfortable making your own investment decisions, Robinhood can be a great option.
Charles Schwab Vs Robinhood: Pros and Cons
Charles Schwab Pros
√ There are no commissions on ETFs and stocks that trade.
√ Above-average mobile app.
√ Fractional shares that start as little as $5
√ Robo-advisor, with no advisory cost
Charles Schwab Cons
- Access to cryptocurrency is not direct to the blockchain.
- Charges for managed accounts are high and financial advisor support.
√ The platform is fee-free and the account is completely free and users can set up an account within minutes
√ Fractional shares are available for purchase -- Possibility to purchase shares of the company's stock.
√ There is no cost to trade cryptocurrency Robinhood offers seven coins across 48 states.
√ $0 account minimum
√ The app is easy to use
- Service options for customers are limited.
- There are no retirement or other types of accounts are offered.
Charles Schwab Vs Robinhood: Regulations
Robinhood Securities LLC that provides securities-related products and services is a member of the Financial Industry Regulatory Authority (FINRA). These US officials are known for their strictness when it comes to companies that act in a way that is unfair. You can be sure that every precaution is in place to protect you from being a victim of the Robinhood fraud.
Charles Schwab: Regulations
Charles Schwab & Co Inc is a member of the Financial Industry Regulatory Authority (FINRA).
Charles Schwab brokerage firm is regulated by the Financial Industry Regulatory Authority (FINRA).
Robinhood Vs Charles Schwab: Security
Robinhood Financial is a member of the Financial Industry Regulatory Authority, and Robinhood Financial LLC is a SIPC member. SIPC covers securities customers up to $500,000 (includes $250,000 in cash) in the United States.
Robinhood Crypto offers cryptocurrency trading through its account, and it is not affiliated with SIPC or FINRA. Robinhood Crypto offers cryptocurrency trading through its account, and your cryptocurrency investments are not covered by the FDIC or SIPC. Robinhood Crypto is not a member of SIPC or FINRA, which explains why your cryptocurrency investments are not covered by the FDIC or SIPC.
For security, Charles Schwab is also excellent. Apart from the voice recognition feature that is used for phone calls to customer support, they provide firewalls that have two-factor authentication, 128 bit encryption, as well as mobile security features.
They also offer the usual $500,000 of Securities Investor Protection Corporation (SIPC) insurance for their customers and an additional $150 million in insurance for investment and $1.15 million for cash transactions through Lloyd's of London and other insurance companies. In addition, Charles Schwab offers 100% coverage against losses that occur in your account caused by unauthorized trades.
Charles Schwab Vs Robinhood: Investment Options
Charles Schwab offers an extensive range of tradable securities, which include ETFs and mutual funds bonds, index funds options, and futures. However, it doesn't provide trading in forex, like other similar brokers offer.
Schwab fractional stocks give the possibility of fractional shares meaning investors can purchase only a tiny portion of the stock instead of paying for the entire share price.
On the other hand, Robinhood is a non-profit investment platform that lets users to purchase and sell ETFs, stocks as well as options. There is also the option of Robinhood Gold, allowing you to take out loans to invest money, and allows you to access extended trading hours.
Charles Schwab Vs Robinhood: Trading Platforms
Charles Schwab Trading Platforms
Charles Schwab offers two different trading platforms: the standard Charles Schwab platform and the more advanced StreetSmart Edge platform. Both platforms are available online and via mobile app.
The standard Charles Schwab platform is great for beginner investors. It's easy to use and includes all of the basic features you need to get started. The StreetSmart Edge platform is more advanced, with features like real-time quotes, charts and analysis tools, and more. It's a great choice for experienced investors who want more control over their trades.
Robinhood Trading Platforms
Robinhood offers a single trading platform that is available online and via mobile app. The platform is simple and easy to use, but it lacks some of the more advanced features that you'll find on other brokerages' platforms.
Robinhood Vs Charles Schwab: Fees
If you're looking to make an investment without paying any charges, Robinhood and Charles Schwab are two great options. Both brokerages provide no commissions on ETFs, stocks and options trades and there's no minimum balances for accounts.
With Charles Schwab, you can place commission free trades on stocks, ETFs, preferred stocks, REITs, Treasuries, and the thousands of mutual funds.
Charles Schwab charges fees for other investments, including:
Options: $0.65 per option contract
Futures and futures options: $2.25 per contract fee
Bonds, CDs, and other secondary trades: $1 per bond, $10 minimum fee, and $250 maximum fee per trade.
Robinhood does not charge any commissions for trades. However, there are some fees for certain services, such as margin trading and account transfers.
Commission-Free ETFs Offered by Charles Schwab
Charles Schwab offers more than 200 commission-free ETFs. These ETFs cover a wide range of asset classes, including domestic and international stocks, bonds, and commodities.
Commission-Free ETFs Offered by Robinhood
Robinhood offers more than 3,000 commission-free ETFs. These ETFs cover a wide range of asset classes, including domestic and international stocks, bonds, and commodities.
Robinhood Vs Charles Schwab: Account Types
Account Types of Charles Schwab
Schwab also provides almost every account type you could imagine such as joint, individual IRAs, and education savings accounts, 529 education accounts, brokerage accounts, corporate accounts like those offered by the SEP IRA and the solo 401(k), as in charity and trust accounts among others. If your financial requirements increase the Schwab account will be able to meet your needs.
Account Types of Robinhood
Robinhood provides three kinds of accounts: Cash, Instant and Gold. Sign up today to receive the instant level of your account. It is then possible to change it into cash or upgrade to an account with gold.
Retirement Accounts Offered by Charles Schwab
Charles Schwab offers a variety of retirement accounts, including traditional IRA, Roth IRA, and SEP-IRA. The brokerage also offers rollover IRA, SIMPLE IRA, and 401(k) accounts.
Retirement Accounts Offered by Robinhood
Robinhood does not offer any retirement accounts. This is one area where the brokerage falls short compared to other brokerages.
Charles Schwab Vs Robinhood: Customer Support
Customer Service of Charles Schwab
Charles Schwab has excellent customer service. You can reach a customer service representative by phone 24 hours a day, Monday through Friday. Representatives are also available via live chat and email. In addition, Charles Schwab has more than 500 branch locations across the country, so you can walk in for your support.
Customer Service of Robinhood
Robinhood's customer service is very limited. The brokerage only offers email support, and it can take several days to get a response. There is no phone support or live chat option.
Is Charles Schwab Better Than Robinhood?
It depends on your investment needs and preferences. Charles Schwab is a great choice for investors who need guidance and resources, as well as those who want access to customer support 24/7. Robinhood is a good choice for investors who want to trade without paying commissions, and those who prefer a simple trading platform.
Why should you choose Charles Schwab?
Schwab is an all-inclusive discount brokerage that offers online brokerage accounts as well as robo advisors and professionally managed accounts and other services. Charles Schwab is reliable in its offerings, and comes with no minimum account requirements and no annual, inactivity or charges. This means that Charles Schwab is a great option for investors of all kinds from novice to expert.
Although the basic robo advisor does not charge any fees, there must be at least $5,000. If you're looking for an AI-powered, automated guideline you can choose a robo advisor with less minimums in order to begin.
Why should you choose Robinhood?
There are several reasons to consider Robinhood to trade stocks on their platform.
It is extremely simple and easy to use and doesn't require any extras or frills. This is appealing to investors who simply need to get the job completed without fuss.
Another factor is the fact that Robinhood is an ideal option when you are independent and don't need a lot of direction.
Finally, those who only trade in small amounts might like Robinhood since there aren't any charges for trades. Option and cryptocurrency traders would be able to prefer Robinhood as a great choice due to the lack of charges.
Online Advisors and Educational Offerings of Charles Schwab
Charles Schwab offers its own online advisors, as well as a variety of educational resources. The brokerage's online advisors offer investment advice and asset management services, and they can help you create a personalized investment plan. Charles Schwab also offers a variety of articles, videos, webinars, and other educational resources to help you learn about investing.
Online Advisors and Educational Offerings of Robinhood
Robinhood does not offer any online advisors or educational resources. This is one area where the brokerage falls short compared to other brokerages.
Charles Schwab is a great choice for investors who need guidance and resources. The brokerage offers a wide range of investment products and services, as well as 24/7 customer support. However, Charles Schwab charges no commissions for stocks and ETFs, which can add up if you're an active trader.
Robinhood is a good choice for investors who want to trade without paying commissions. The brokerage offers a simple trading platform and mobile app, but it lacks some of the resources and customer support that you'll find at other brokerages. For stock trading, both Charles Schwab and Robinhood are good choices.
So which one is better? It depends on what you're looking for. If you need a lot of hand-holding and guidance, Charles Schwab is probably the better choice. But if you're a DIY investor who is comfortable making your own decisions, Robinhood might be the better option for you.