J.P. Morgan Self-Directed Investing vs. Robinhood: Which Broker Is Right for You?

If you're looking to open a new investment account, there is no shortage of choices. Two popular options for newer investors are J.P. Morgan Self-Directed Investing and Robinhood, which has a mission to make investing as economical and user-friendly as possible for everyone. In this J.P. Morgan Self-Directed Investing vs. Robinhood comparison, we'll take a look at the similarities and differences between the two, so you can determine if one might be a good fit.

J.P. Morgan Self-Directed Investing and Robinhood both offer $0 commission stock and ETF trades, like most brokers do. However, that's where the similarities end.

For options and cryptocurrency investors, Robinhood is a winner. J.P. Morgan's $0.65-per-contract charge is in line with most of its brokerage peers; both J.P. Morgan and Robinhood offer commission-free options trading, but Robinhood also charges no contract fees. Furthermore, Robinhood offers fee-free cryptocurrency trading, while J.P. Morgan doesn't (most bank-affiliated brokers don't offer direct cryptocurrency investment).

On the other hand, mutual fund commission is a standout area for J.P. Morgan Self-Directed Investing. The firm charges no commissions whatsoever for mutual funds -- not just those on a no-transaction-fee (NTF) list. This is a rarity in the industry. Robinhood doesn't offer mutual fund investing at all.

Robinhood is designed as a simplified investing platform, and therefore its selection of investment options is somewhat limited. It offers stocks, ETFs, options, and cryptocurrencies on its platform, but you can't use Robinhood's platform to invest in mutual funds or fixed-income investments like bonds and CDs.

J.P. Morgan Self-Directed Investing offers more investment choices, including stocks, ETFs, options, mutual funds, and bonds.

For new investors especially, it's important to mention that Robinhood offers the ability to buy fractional shares of stock, while J.P. Morgan doesn't. This can be a big perk for newer investors without a ton of money to invest. For example, if Amazon stock is trading for $3,000 per share, you would need at least that much money to buy one share through J.P. Morgan Self-Directed Investing. However, you can buy a fractional share of Amazon with just a few dollars through Robinhood.

Neither platform offers futures or foreign currency (forex) trading, so if either is a part of your investing strategy, you'll need to look elsewhere.

J.P. Morgan Self-Directed Investing and Robinhood both offer standard taxable brokerage accounts for individuals, as well as traditional and Roth IRAs. Each offers the ability to trade on margin, too. Investors who pay $5 per month for a Robinhood Gold subscription have access to margin investing at some of the lowest rates we've encountered.

(Note: J.P. Morgan has announced that it will be shutting down its robo-advisory investment platform J.P. Morgan Automated Investing in the second quarter of 2024.) If you'd like to use something similar, consider other best in class robo-advisory services.

With that in mind, neither of these brokers offer an excellent selection of investment account types. For example, you can't open a joint investment account (with your spouse, for example) at either firm. There are no options for self-employed retirement accounts like SEP IRA or SIMPLE IRAs, and you can't open a custodial account like an UGMA or UTMA.

In short, if your investment needs extend beyond a standard individual investment account, or traditional or Roth IRA, you're better off reading more broker reviews to find the right one for you.

J.P. Morgan Self-Directed Investing and Robinhood both offer a mobile investing app, but they are rather different from one another. Robinhood's trading app is designed to provide the most user-friendly way to buy and sell stocks and options. J.P. Morgan's app is designed as an all-in-one banking app, allowing customers to access and manage their banking, credit, and investing accounts in a single app.

J.P. Morgan Self-Directed Investing holds ratings of­­­ 4.7 and 4.0 out of 5 stars on the App Store and Google Play Store, respectively, and Robinhood's ratings are 4.2 and 4.1. (Note: Robinhood's ratings were significantly higher prior to the "meme stock" craze of early 2021, when it was forced to suspend trading in certain volatile stocks to the disappointment of many customers.)

Robinhood offers a web-based trading platform, but is a mobile-first broker. It doesn't have sophisticated trading tools, educational resources, or many of the other features you'd find on a lot of other brokers' trading platforms. J.P. Morgan's trading platform offers several useful features, such as its highly regarded Portfolio Builder tool that can help investors construct a portfolio to help meet their goals.

It's worth noting that neither offers a particularly sophisticated trading platform. If you're an active options trader, or want complex charting tools to develop your strategy, you'll probably want to look for a broker that offers a more feature-packed platform.

Both J.P. Morgan Self-Directed Investing and Robinhood are solid brokerage platforms with $0 trading fees on stocks and ETFs, but neither is right for all investors. In some cases, the decision is easy. If you want to invest in mutual funds, for example, J.P. Morgan Self-Directed Investing is clearly the better of the two. On the other hand, if you want to buy cryptocurrencies as part of your investment strategy, Robinhood might be the better option.

However, neither of these brokers offers everything. If you need a standard type of investment account to buy and sell stocks, ETFs, and/or mutual funds, one of these could be a good choice. But if you need anything other than a standard account or IRA, or if you want to trade different investment vehicles like futures, for example, neither of these will likely meet your needs.

Want another option? Check out The Ascent's Forex.com Review.