You may have heard about the nuttiness in the stock market last week. GameStop (GME) had a tumultuous ride, led by a short squeeze and traders from the r/wallstreetbets subreddit. The Robinhood stock trading app only added fuel to the burning fire.
On Thursday, January 28, Robinhood took the drastic action of stopping traders from buying shares of AMC, GME, and other stocks. The only way a trader could purchase shares was if they were attempting to close short positions.
I was a stockbroker during The Great Recession, and what happened last week was something I’ve not seen in a long time. If you were impacted, you’re likely beyond mad and looking for alternatives to Robinhood.
I get it. Apps like Robinhood are meant to allow retail investors to invest in stocks. Ideas of conspiracy aside, the GameStop issue rocked most brokerages.
It’s easy to understand frustration. Our guide shares the best Robinhood alternatives if you’re looking for a new investment app.
Alternatives to Robinhood
There has been significant growth in the free stock trading mobile app space. When rating the top Robinhood alternatives, we only included the following in our list:
- The brokerage must offer commission-free trades, or be greatly reduced
- Little to no account minimums
- Minimal, if any, account maintenance fees
- Intuitive and easy to use platform
- Did not restrict trading of any stocks, unless being required to by their respective clearinghouse
With those requirements in mind, here are the best alternatives to the Robinhood investing app.
|SoFi Invest||$1||Beginners||$0||Learn more|
|Webull||None||Active traders||$0||Learn more|
|M1 Finance||$100||Self-directed investors||$0||Learn More|
|Betterment||None||Hands-off investors||$0||Learn More|
|eToro||$200||Cryptocurrency Trading||$0||Learn more|
|Ally Invest||$100||Casual traders||$0||Learn more|
|TD Ameritrade||None||Active traders||$0||Learn more|
|Fidelity||None||Any investor||$0||Learn more|
|Vanguard||None||Passive investors||$0||Learn more|
1. SoFi Invest
SoFi Invest is a part of the lending giant SoFi. The platform is known for student loan refinancing, and now offers investing for retail investors.
The platform is growing, but there are several features that make it one of the investment apps to consider, namely:
- No commissions, no account minimums, and no account fees
- Full suite of educational materials to help on your investing journey
- Fractional share investing through its Stock Bits feature
- Newly added cryptocurrency trading that offers trading in Bitcoin, Ethereum, and Litecoin
- Roth, Traditional, and SEP IRAs
- Free access to SoFi benefits like career coaching, financial planning, and estate planning
- Discounts on other SoFi products
- If you need help with your investments, SoFi Automated Investing offers robo-advisor services similar to Betterment
Best for: SoFi Invest is best for the beginner investor who wants a free robo-advisor or those wanting to invest with minimal funds.
Webull is another newer player in the no-commission trading space. Founded in 2017, the brokerage now has over ten million active users and focuses on newer active traders. Here’s what sets the investment app apart from Robinhood:
- The app offers a wealth of charting functions, which is helpful for the active trader
- Commission-free trading
- Cryptocurrency trading that offers trading in Bitcoin, Ethereum, Litecoin, and Ripple
- Powerful mobile app that offers all of the same features available on the desktop version, including charting
- Trading on all major exchanges, in addition to cryptocurrency, options, and margin trading
- Free stock promotion of two shares of stock valued up to $1,600 when you open an account and deposit at least $100
- No account minimums
Best for: Webull is best for those looking for cutting edge technology to aid in their active trading.
3. M1 Finance
M1 Finance is a hybrid robo-advisor and active trading platform. The free investment service began in 2015 and claims over 200,000 active investors.
The brokerage is on the smaller side, but it has several attractive features that make it worth considering for people looking for alternatives to Robinhood. Those are:
- Low minimum account balance of just $100
- Automated investing that rebalances your portfolio on a monthly or quarterly basis
- Fractional share investing through pies. M1 offers premade, expert pies or you can create your own pie
- Full suite of charts that let you make informed decisions, in real-time
- Commission-free trading
- An easy-to-use trading app that has all of the same tools you will find on their desktop platform
Best for: Investors wanting to self-direct investments but wanting some assistance and automated rebalancing.
Betterment is the grandfather in the robo-advisor space. Starting in 2008, the platform boasts over $22 billion in assets under management.
The brokerage is not for active traders, but those new to investing or wanting a hands-off approach. Here are several other things that set it apart from Robinhood:
- No minimum account balances, you can invest with as little or as much as you want
- Super low-cost investing with an annual fee of just 0.25 percent of what they manage for you. For example, if you invest $5,000, they charge you $12.50, annually
- Full suite of cash management tools, including high-yield savings and investing of your spare cash
- Create a personalized asset allocation based on your specific needs and outside accounts
- Goals-based investing that aligns your portfolio based on your goal – whether it be retirement, saving for college, or a house
- Set it and forget it approach to investing so you don’t have to actively manage your account
Best for: Investors who want a hands off approach that’s affordable and in-line with their goals.
eToro is one of the best investing apps for people looking to focus on cryptocurrency. The brokerage is not truly for beginners, but active, seasoned investors.
Here are some features to know about eToro:
- Commission-free trading
- Unlike other Robinhood alternatives, you need $200 to open an account with eToro
- No fees; you only pay for the spreads on your trade
- Free virtual portfolio with $100,000 to invest with. This is perfect for newer active traders wanting to practice with no skin in the game
- Expansive educational section of the website, complete with video tutorials to help you learn more
- Access to over 40 cryptocurrencies and crypto2crypto pairs, including Dogecoin, Ethereum and more
- Powerful desktop and mobile platform complete with charting capabilities
- Copy trading that lets you copy top traders at no additional charge
Best for: eToro is best for seasoned investors who trade cryptocurrency.
6. Ally Invest
Ally Invest is an outgrowth of Ally Bank. The investment arm is a low-cost brokerage that offers a strong portfolio of tools for investors.
Those features include:
- No account minimums and no account fees
- Near commission-free trades. If the cost per share is under $2, you pay a commission of $4.95 plus $0.01 per share, otherwise it’s free
- Full suite of investment options, including stocks, exchange-traded funds (ETFs), mutual funds, options, and margin trading
- Robo-advisor availability if you want a hands-off approach and have at least $100 to invest
- Complete educational section with resources to help newer investors
- Simple, but powerful mobile app that offers plenty of charting tools
Best for: Ally Invest is best for casual traders who want access to tools offered by a traditional online brokerage. What it lacks in power relative to other Robinhood alternatives it makes up for in available tools to fully manage your investments.
7. TD Ameritrade
TD Ameritrade is one of the legacy online brokers. The brokerage began in 1975 and was recently acquired by Charles Schwab.
It’s currently operating on its own and is one of the better alternatives to Robinhood. Here are some reasons why:
- Commission-free trading if you place trades online
- No account minimums or fees
- Derivatives trading in both futures and options
- Powerful charting features with its thinkorswim platform. This platform is available on both desktop and mobile
- Wide spectrum of investment options, from stocks and ETFs to bonds and international trading
- Automated investing and advisor services for those with higher balances
- Access to over-the-counter (OTC) pink sheets and the OTC Bulletin Board
Best for: TD Ameritrade is best for active traders wanting powerful tools or casual investors who may need some help with their investments.
Fidelity is an evolving, but stalwart brokerage that out competes most micro-investing apps. The broker began in 1946 and has over $6 trillion in assets under management.
Fidelity has a lot of features to offer, including:
- Commission-free trading online, and no account minimums
- Powerful charting and research tools. The broker has some of the best real-time charting functions in the space that most active traders will love
- Fractional share investing through its Slice from Fidelity feature
- Personal banking tools, including checking accounts and debit cards
- Commentary and analyst opinions from over a dozen third-party agencies on Wall Street
- Wealth of investment options, from individual stocks, ETF, mutual funds, options, bonds, and more
- Access to numerous account options, including individual accounts, IRAs, 401(k)s and more
Best for: Fidelity is best for investors wanting access to powerful trading tools and a complete toolbox of investment choices.
Vanguard is one of the most well-known brokers in the space. The broker pioneered the low-cost philosophy in investing, promoting index funds and other investments with super low costs.
While they may seem a bit stodgy, its philosophy is what warrants the broker being on our list of alternatives to Robinhood. Here are a few reasons to consider the brokerage:
- No account minimums, though some Vanguard mutual funds require a minimum of $3,000 to invest
- No commissions on any trades you place online, and over 160 no-transaction fee mutual funds
- Helpful desktop platform with plenty of educational resources, though it is a bit lacking in charting functionality
- Access to numerous account options, including individual accounts, IRAs, 401(k)s, and 529 plans
- Wide array of investment choices from stocks and ETFs, to margin trading, bonds, and more
- The company has no outside investors, helping them keep costs super low
A Caution About Using Investing Apps
Robinhood certainly upset a lot of investors and bystanders with its decision on January 28. I’m not wanting to get into conspiracy theories as to what happened, but it’s understandable why people were upset.
The chaos reveals another problem – investing in something you don’t understand. I love that free stock trading apps have democratized investing for many people.
It’s easy to believe you need a lot of money to invest, or that you need to be an expert to start. Neither are true, but it also leads to some people investing in things they don’t understand.
No one knows everything; people who invest in something they simply don’t understand risk losing more than they intend. Loss is inevitable when you invest in the stock market, but it’s essential to do your due diligence before investing in anything.
The mess that was GameStop and Robinhood is still in flux. And, it’s possible it can happen with other stocks. Over time, investigations will reveal what really happened.
As you start investing, one of the above alternatives will help meet your needs.
What do you look for in a brokerage? How often do you check up on your investments?
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