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If you're planning to start investing, or simply looking for a change from your current broker, there is no shortage of choices. Ally Invest and Robinhood are relatively new online brokers, and both could be solid choices for many investors. We'll take a closer look at both, focusing on the key differences and the features each offers to see if Ally Invest or Robinhood might be the better option for you.
When it comes to pricing, both Ally Invest and Robinhood are on the lower end of the spectrum, and there are some areas where they are identical. For example, both charge no commissions for online and mobile stock and ETF trades, and neither has a monthly account maintenance fee.
That said, there are some big differences. When it comes to options, Robinhood is one of the only places where investors will get $0 commissions on all option trades. Ally doesn't charge a base commission, but there is a $0.50 fee per contract. Ally is still quite reasonable -- many rivals charge more per contract.
It's also worth discussing pricing for the products only offered by one or the other. Robinhood doesn't yet offer mutual fund investing, while Ally has an excellent selection of mutual funds, and its standard mutual fund commission is one of the lowest. Conversely, Ally doesn't allow customers to trade cryptocurrencies, while Robinhood is one of the only places you can trade several cryptocurrencies with no fees.
Ally Invest | Robinhood | |
---|---|---|
Stock & ETF Commissions | $0 | $0 |
Options Commissions | $0 + $0.50 per contract | $0 |
Crypto Commissions | N/A | $0 |
Mutual Fund Commissions | $9.95 | N/A |
Account Transfer Fee | $50 | $75 |
Account Maintenance Fee | $0 | $0 |
Ally Invest and Robinhood both offer stocks, ETFs, and options, but that's where the similarities end. Robinhood has the advantage, in the sense that it offers fractional share investing, which can be a big perk especially for newer investors, and also offers cryptocurrency trading. Ally Invest is a far more full-featured broker than Robinhood, which is primarily designed to buy and sell stock.
Ally Invest offers over 12,000 mutual funds for one of the lowest commission rates we've seen. Investors can buy and sell bonds, which can be a portfolio staple for income-seeking investors.
Ally has a banking division, so it also offers high-yield CDs as part of an investment strategy. The bank currently offers CDs with terms from three months to five years, and many intervals in between.
Ally Invest | Robinhood | |
---|---|---|
Stocks and ETFs | Yes | Yes |
Fractional Shares | No | Yes |
Options | Yes | Yes |
Mutual Funds | Yes | No |
CDs | Yes | No |
Bonds | Yes | No |
Futures | No | No |
Crypto | No | Yes |
Currencies (Forex) | Yes | No |
In this category, Ally is a big winner. To be fair, Robinhood is designed for simplicity and with one type of account in mind -- a standard, taxable, individual brokerage account. It offers margin privileges to Robinhood Gold members, and offers an interest-bearing cash management account, but that's about the extent of Robinhood's account offerings. However, it's worth mentioning that the company has said retirement accounts are in the future plans.
Meanwhile, as a full-featured broker, Ally Invest offers pretty much every type of account you could want. You can open a standard taxable brokerage account jointly with another owner (like a spouse). You can open a retirement account, including traditional, Roth, and SEP IRAs. And you can open a custodial account like an UGMA or UTMA for a child. Ally also offers a highly-rated robo-advisory service for customers who want to put some or all of their investing on auto-pilot.
It's also worth noting that Ally is a bank in addition to a brokerage (prior to 2010, it was known as GMAC Bank, the financial arm of General Motors). So you can also open a checking account, savings account, or CD. Ally also offers a variety of lending products, including mortgages, auto loans, and personal loans. In short, Ally could be a good choice for people who like to keep all of their financial accounts in one place.
Ally Invest | Robinhood | |
---|---|---|
Taxable Brokerage | Yes | Yes |
Joint Tenant | Yes | No |
Margin | Yes | Yes, with Robinhood Gold |
Robo-Advisor | Yes | No |
Traditional IRA | Yes | No |
Roth IRA | Yes | No |
Other IRA | Yes | No |
Custodial | Yes | No |
Checking | Yes | No |
Savings | Yes | Yes |
Credit Card | Yes | No |
Both have highly rated apps that are easy to use. Ally Invest holds ratings of 4.7 and 4.0 out of 5 stars on the App Store and Google Play store respectively. Robinhood's ratings are 4.2 and 3.8. Robinhood's ratings were higher prior to the "meme stock" craze of early 2021, when it suspended trading in certain volatile stocks, disappointing many customers.
Ally reviews often call out the all-in-one nature of the app and praise the live chat and customer service features. Robinhood's app offers one of the most seamless ways to trade stocks and cryptocurrencies and manage an investment portfolio.
Both of these are excellent brokerage options, but are targeted to different types of investors. Ally Invest is a full-featured brokerage and bank, and offers investment products and accounts designed to meet the needs of all investors. For example, if you want to open a retirement account or buy mutual funds, Ally could be a good choice for you (these things aren't available through Robinhood).
On the other hand, if your main goal is to get started with stock investing and you want an easy-to-use platform that keeps expenses at a minimum, Robinhood could be worth considering. In a nutshell, the better choice for you depends primarily on your investment goals.
We recommend comparing brokerage options to ensure the account you're selecting is the best fit for you. To make your search easier, here's a short list of our best trading platforms of 2024.
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Fidelity disclosure
Fractional share quantities can be entered out to 3 decimal places (.001) as long as the value of the order is at least $1.00. Dollar-based trades can be entered out to 2 decimal places (e.g. $250.00)
Robinhood disclosure
All investments involve risk and loss of principal is possible.
Securities are offered through Robinhood Financial LLC, member FINRA/SIPC. Cryptocurrency services are offered through an account with Robinhood Crypto, LLC (NMLS ID 1702840). Robinhood Crypto is licensed to engage in virtual currency business activity by the New York State Department of Financial Services. Cryptocurrency held through Robinhood Crypto is not FDIC insured or SIPC protected. For more information see the Robinhood Crypto Risk Disclosure.
Trades of stocks, ETFs and options are commission-free at Robinhood Financial LLC. Other fees may apply. Please see Robinhood Financial’s Fee Schedule to learn more.
Fractional shares are illiquid outside of Robinhood and are not transferable. Not all securities available through Robinhood are eligible for fractional share orders. For a complete explanation of conditions, restrictions and limitations associated with fractional shares, see the Fractional Shares section of our Customer Agreement.
Robinhood Gold is an account offering premium services available for a $5 monthly fee. Not all investors will be eligible to trade on Margin. Margin investing involves the risk of greater investment losses. Additional interest charges may apply depending on the amount of margin used. Bigger Instant Deposits are only available if your Instant Deposits status is in good standing.