If you're on a Galaxy Fold, consider unfolding your phone or viewing it in full screen to best optimize your experience.
Both Charles Schwab and Robinhood are brokerage firms that have a lot to offer to their customers. But there are important differences between the two.
Charles Schwab is a more traditional brokerage firm that offers multiple account types and a solid mix of traditional asset classes to invest in. Robinhood offers fewer account types, caters to beginner investors, and allows crypto trading.
This Charles Schwab vs. Robinhood comparison can provide more insight so you can pick which brokerage firm is best for you.
When you're choosing between Charles Schwab vs. Robinhood, the good news is you won't have to pay for buying stocks with either brokerage firm online. Neither charges online commission for getting your money into the stock market by investing in stocks or ETFs.
Trading options may cost you a little more with Schwab, though. With Charles Schwab, there's a $0.65 per contract fee. Robinhood doesn't impose this fee -- although per contract fees are very common among brokerage firms -- which is why Robinhood is among the best options trading platforms.
Charles Schwab | Robinhood | |
---|---|---|
Stock & ETF Commissions | $0 | $0 |
Options Commissions | $0.65 per contract fee | $0 |
Crypto Commissions | N/A | $0 |
Mutual Fund Commissions | 4,000 no-load, no-transaction-fee mutual funds | N/A (Robinhood doesn't allow trading of mutual funds) |
Account Transfer Fee | $0 to transfer to Schwab, $0 for partial transfer of account, and $50 for full transfer to another firm | $0 to transfer to Robinhood; $100 for full transfer to another firm |
Account Maintenance Fee | $0 | $0 or $5 per month for Robinhood Gold |
Both Schwab and Robinhood allow you to trade stocks, ETFs, and options, but there are some important differences between Charles Schwab vs. Robinhood when it comes to available investment options.
Charles Schwab provides access to a wider range of traditional asset classes, including more than 18,000 mutual funds as well as bonds, CDs, and futures. Unlike Schwab, Robinhood doesn’t offer mutual funds or access to fixed-income securities, like bonds. However, Schwab doesn't allow cryptocurrency trading, while Robinhood does.
And while Charles Schwab and Robinhood both allow you to trade fractional shares, Schwab's minimum investment for its "Schwab Slices" is $5, while Robinhood allows you to spend as little as $1 to buy fractional shares. This lower investing requirement helps make Robinhood one of the best online brokers for beginners since you can get started with very little money.
Charles Schwab | Robinhood | |
---|---|---|
Stocks and ETFs | Yes | Yes |
Fractional Shares | Yes | Yes |
Options | Yes | Yes |
Mutual Funds | 4,000 no-load, no-transaction-fee mutual funds; more than 18,000 total mutual funds | No |
CDs | Yes | No |
Bonds | Yes | No |
Futures | Yes | No |
Crypto | No | Yes |
Currencies | No | No |
If you're looking for the best brokers for IRAs, Charles Schwab may be an option for you. Schwab provides a variety of different individual retirement accounts, including traditional IRAs, Roth IRAs, Simple IRAs, and SEP IRAs.
In December 2022, Robinhood launched its first tax-advantaged retirement savings accounts. Robinhood now offers traditional IRAs and Roth IRAs, and offers a 1% match up to the annual IRA contribution limits (3% match for Robinhood Gold members).
Robinhood also won't make any list of the best robo-advisors, as it doesn't provide any robo-advising services. Schwab does, though. Through Schwab Intelligent Portfolios, robo-advisors build a diversified portfolio based on your goals and automatically rebalance your portfolio over time. There's no advisory fee for Intelligent Portfolios, but there is a $5,000 minimum investment required.
And while both brokerage firms offer margin accounts, you must be a Robinhood Gold member and pay $5 per month (on top of margin interest) to gain access to margin investing. However, Robinhood does offer the first $1,000 of margin to Gold members without charging interest.
Charles Schwab | Robinhood | |
---|---|---|
Taxable Brokerage | Yes | Yes |
Joint Tenant | Yes | No |
Margin | Yes | Yes |
Robo-Advisor | Yes | No |
Traditional IRA | Yes | Yes |
Roth IRA | Yes | Yes |
Other IRA | Rollover; Inherited; Custodial; Personal Choice | No |
Custodial | Yes | No |
Checking | Yes | No, but offers a spending account |
Savings | Yes | No, but offers brokerage cash sweeps |
Credit Card | Yes | No |
Both Charles Schwab and Robinhood offer full-featured mobile apps that are well received by customers. Robinhood's investing app received a 4.2-star out of 5-star rating on the App Store for iOS and 4.1 stars out of 5 stars on the Google Play store. Schwab's investment app received a 4.8-star rating on the App Store and a 2.4-star rating on the Google Play store.
Schwab offers many more options with regard to its trading platforms than Robinhood does. You can choose to use StreetSmart Edge, an advanced platform with streaming data and sophisticated charting tools. (Note: Charles Schwab is retiring StreetSmart Edge in 2024 in favor of building out thinkorswim, an alternative and popular charting platform.) Or you can engage in stock trading on web or mobile apps.
Robinhood also offers trading on the web and mobile devices, but its trading platforms are undoubtedly geared more toward beginners. Its simple design has no learning curve but may not offer all the features advanced traders are looking for.
Charles Schwab is a long-standing established brokerage firm that provides a traditional investing experience. You'll have a choice of trading platforms and access to in-person advice if needed. Schwab also provides you with the option to invest in most traditional asset classes, including stocks, mutual funds, CDs, and bonds.
Robinhood is a newer and more modern alternative with a fun and simple trading platform and a focus on mobile trading. Its different investment options highlight this approach, as you can trade cryptocurrencies and take advantage of more affordable fractional share trading, but can't buy traditional fixed-income investments.
When deciding between Charles Schwab vs. Robinhood for your brokerage account, take these differences into account to see which feels like the better fit for you based on the type of investor you are.
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.
Charles Schwab is better-suited for people who want a full suite of investments and services, including fixed-income securities, robo-advisor portfolios, and mutual funds. However, if you want to trade cryptocurrencies or trade options commission-free, Robinhood may be the better fit.
Schwab has no account minimum and allows you to invest in Schwab Slices, which are fractional shares (pieces of a full share), with just $5. Robinhood has no account minimum and allows you to buy fractional shares with as little as $1.
Our Brokerages Experts
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.
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.