Firstrade vs. Robinhood: Which Broker Is Right for You?

Robinhood came as a shock to the system for many in the brokerage industry. Offering low-cost trading and a streamlined platform, the broker became an overnight success. But Robinhood's time as the new kid on the block may be coming to an end. Brokers, including Firstrade, have replicated Robinhood's fee structure and included extra features. In our Firstrade vs. Robinhood review, we'll see how the two brokers compare.

Robinhood may have invented the commission-free model, but it isn't the only broker offering it anymore. For most investors, the fees charged by Firstrade vs. Robinhood are a wash. Those seeking no commissions and low account fees may want to consider both of these brokers.

Firstrade has successfully co-opted the low-fee model. Like many in the brokerage industry, Firstrade offers zero-commission trading of stocks and ETFs. Firstrade stands out when it comes to fees charged on other investments. While the average broker charges around $0.65 per contract on option trades, Firstrade ditches the fee altogether. Additionally, Firstrade's $0 fee on mutual funds beats the typical rates we see that are over $20. When it comes to a low-fee model, Firstrade walks the walk.

Robinhood pioneered the commission-free fee structure. With $0 fees on stock and ETF trades, it quickly became one of the best ETF brokers. Similarly, Robinhood is one of the best options trading platforms because it charges no commissions on option trades. This broker continues to push the envelope, and Robinhood is one of the few brokers to offer cryptocurrencies without a fee. It remains a low-cost option for most investors, even as other brokers shed their fees.

LEARN MORE: Best Options Trading Platforms

The appeal of Firstrade vs. Robinhood depends on which investments you trade. Investors interested in the more traditional should consider Firstrade. It offers a variety of mutual funds, CDs, and bonds. Those with a higher risk tolerance might prefer Robinhood's crypto. Plus, Robinhood's fractional trading may appeal to investors with lower balances.

Firstrade offers investment options beyond the baseline of stocks and ETFs. Complemented by a suite of research reports and tools, Firstrade offers option trading to its users. Mutual fund investors will enjoy a variety of funds, including over 3,000 no-load options. Firstrade also offers CDs and bonds, which may be an important part of a well-diversified portfolio.

Robinhood offers commission-free stocks and ETFs, and they can be purchased as fractional shares. Robinhood also supports options trading. It is one of the few brokers that allow cryptocurrency trading.

Firstrade recently joined the growing list of brokers that, like Robinhood, offer fractional shares of stocks and ETFs. Fractional shares allow small investors to buy big names. Instead of buying a whole share of Amazon (AMZN) for over $3,000 for example, an investor could buy $5 worth.

For many investors, trading is only one piece of the puzzle. When considering things like retirement planning, not all accounts are created equal. Firstrade and Robinhood offer very different account types to users.

Firstrade offers many account types to users beyond the standard taxable option. Investors can save for retirement using a tax-advantaged traditional or Roth IRA. Firstrade offers custodial accounts including UTMAs and UGMAs for intergenerational saving. Margin accounts are also available to Firstrade users, but at high rates.

READ MORE: Best IRA Accounts

Robinhood offers users taxable brokerage accounts and traditional and Roth IRAs. Robinhood also offers a 1% match for IRA contributions, rising to a 3% match for Robinhood Gold subscribers. Robinhood users can fund a margin account. However, to get the most competitive rates, you'll need a Robinhood Gold subscription, which costs $5 per month.

Firstrade and Robinhood offer vastly different user experiences:

• Firstrade has prioritized a fully featured feel to its trading platform.
• Robinhood has found success in streamlined simplicity.

The better platform depends on your specific needs as an investor.

LEARN MORE: Best Online Stock Brokers for Beginners

Firstrade offers a number of trading platforms suitable for a wide range of investors. The basic platform is simple and easy to use, and it's a good fit for a passive investor. The Navigator offers an interface with customizable widgets, charts, and tools. The Options Wizard combines tools and research for derivative traders. Firstrade also has a highly rated app. The Firstrade suite offers a variety of interfaces to complement an investor's trading experience.

Robinhood is ranked as one of the best stock trading apps, thanks to its simplistic design. The Robinhood app offers limited features, including viewing your portfolio and placing trades. Its video game-like feel streamlines the trading experience and has earned it a wide following. Robinhood offers a desktop platform, which performs identically to the mobile app.

READ MORE: Best Free Stock Trading Apps

When comparing Firstrade and Robinhood, there is no clear answer to which is best. The better broker for you depends on a number of factors, such as how much you value research and tools and which investments you want to trade.

Firstrade is a fully featured broker with an extensive suite of options. Derivative traders should take special note of the OptionsPlay partnership. This pairing brings research offerings and unique tools to Firstrade users. Mutual fund investors will also be interested in the funds offered by Firstrade, all without commission fees. For investors interested in tax-advantaged accounts designed for self-employed people (like SEP IRAs and SIMPLE IRAs) or custodial accounts, Firstrade may be the better choice.

Robinhood offers a no-frills, accessible experience to its users. With zero-commission crypto trades, Robinhood should be on every crypto trader's list. Above all, Robinhood's appeal lies in its highly acclaimed mobile app.