Fidelity vs. Robinhood: Which Is Best For You? (2024)

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Fidelity and Robinhood are two of the most popular online brokerage platforms available in the market today, despite their pronounced differences.

Originally founded in 1946, Fidelity Investments is one of the biggest global asset managers. Meanwhile, Robinhood is a young fintech startup company that became famous for launching the zero-commissions stock trading revolution.

Both services offer their own distinct advantages for different kinds of investors. It’s important to compare these two leading online brokers to help you decide which platform best fits you.

Fidelity vs. Robinhood: Similarities

Fidelity and Robinhood offer commission-free trading of stocks, exchange-traded funds (ETFs) and options, making them good options for budget-conscious investors. Note that Fidelity does charge a $0.65 fee per options contract, whereas options trading on Robinhood is completely free.

Neither platform has a minimum balance requirement, and you can open an account without any requirement to deposit funds until you’re ready.

Feature	Fidelity	Robinhood
Zero minimum balance requirement	✅	✅
Commission-free stock, ETFs and options trading	✅	✅
Margin accounts	✅	✅
Real-time price quotes	✅	✅
Access to Level II data	✅	✅
Instant access to funds while waiting for deposits to clear	✅	✅
Well-designed, easy-to-use apps	✅	✅
Extended-hours trading	✅	✅
Fractional share trading	✅	✅
Cash management account option	✅	✅

Fidelity and Robinhood have high-quality investment apps that are easy to navigate and simplfy trading. Ease of use is what made Robinhood famous, and while Fidelity is a more traditional firm their app has won awards for quality.

Both apps provide real-time price quotes, giving you the latest information on your assets. You can access advanced Level II market data if you meet certain requirements—Robinhood Gold offers Level II quotes as part of its $5 a month fee. Fidelity’s advanced Active Trader Pro platform, which features Level II data, is available if you make at least 36 trades in a 12-month period.

Robinhood and Fidelity both offer fractional shares, allowing you to buy partial shares of stock. If you want to trade after-hours when markets are officially closed, you’ll have the chance on both platforms. They both allow margin trading and borrowing money to buy assets.

Lastly, both platforms offer cash management accounts. These types of accounts operate like checking accounts, paying interest on your uninvested cash and providing you with a debit card to make access to your cash easy.

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Fidelity vs. Robinhood: Differences

Here’s what really matters: Understanding the key differences between Fidelity and Robinhood. Robinhood operates more as a quick, no-frills app, whereas Fidelity provides an extensive selection of investment tools and account options. Here are the major differences:

Expert Trading Platform and Research Tools

While Fidelity and Robinhood both offer a decent mobile app, Robinhood lacks an advanced trading platform.

You can download Fidelity’s Active Trader Pro desktop platform to access a full suite of trading and research tools like charting, stock screeners, portfolio analysis and third-party research. It also includes advanced features for serious investors like heat mapping, an AI assistant and multi-leg options trading.

Advanced Trading Features

Fidelity offers several advanced trading features that are absent from Robinhood’s platform. You can trade OTC penny stocks and engage in short selling.

Robinhood does not offer OTC penny stock trading or short selling.

Retirement Accounts

Fidelity supports a wide range of different individual retirement accounts (IRAs).

Both traditional IRAs and Roth IRAs are available, while business owners can opt for a Solo 401(k). If you’re investing in your child’s college education, you could open a 529 education savings account.

Robinhood only provides taxable brokerage accounts.

Cryptocurrency Trading

Crypto is one area where Robinhood shines. Fidelity does not allow you to invest directly in cryptocurrencies and offers only blockchain ETFs and crypto ETFs.

In comparison, Robinhood lets you invest in 17 different cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), and Dogecoin (DOGE). One downside is that you presently cannot withdraw your crypto from Robinhood’s platform to a crypto wallet. (Note that the company has promised to enable this feature by the end of 2022.)

Customer Service

Fidelity’s customer service far exceeds what’s available at Robinhood.

Fidelity offers a 24/7 phone line as well as a live chat. Fidelity also has physical branches throughout the country where you can stop by for help with your portfolio. You can hire a professional investment manager from Fidelity for more hands-on investment support.

Robinhood customer service is limited to phones. You will need to request a callback via the app, and a customer service representative will contact you when they become available.

Feature	Fidelity	Robinhood
Easy access to customer service	✅	❌
Stock screener tools	✅	❌
Paper trading platform	❌	❌
Retirement accounts	✅	❌
OTC penny stock trading	✅	❌
Short selling	✅	❌
Cryptocurrency trading	❌	✅

Who Should Choose Fidelity?

Fidelity is considered to be one of the leaders in the investment and asset management industry. The company offers zero-commission trades on stocks, ETFs and options, a huge list of in-house Fidelity mutual funds, multiple types of investment accounts and excellent customer service.

Beyond a broad spectrum of products, Fidelity also offers an easy-to-use app for beginners as well as a desktop platform packed with expert research and advanced trading tools for more serious investors. In most situations, you will find what you need at Fidelity.

There are a few downsides. Fidelity does not offer cryptocurrency investing. The company is also missing some features found on other investment platforms, like futures trading and paper trading, where you can practice trading.

Investors who really want the simplest mobile-experience possible may find Robinhood easier to navigate, though keep in mind that the Fidelity app has also won awards for its quality. There aren’t many downsides to Fidelity, which is why this company ranks as one of Forbes Advisor’s best online brokers.

Fidelity Pros

Extensive selection of commission-free investments
Quality mobile and desktop trading platforms
Top-notch research and investment tools
Excellent customer service

Fidelity Cons

No cryptocurrency trading
No futures trading or paper trading
Transaction fees for non-Fidelity mutual funds
Small per-contract fee for options

Who Should Choose Robinhood?

Robinhood makes investing about as easy as possible. The mobile app is quick to download, set up and fund, allowing you to start making trades almost immediately. In fact, this is a common criticism of Robinhood: It makes investing so easy it feels more like a game than a serious activity.

Still, it’s hard to beat the convenience of the Robinhood app. If you want to invest through your mobile device and don’t need extensive research tools like screeners, you should get what you need from Robinhood. The company offers commission-free trades for all their investments, including cryptocurrency.

The reason Robinhood offers commission-free trades is that it accepts payment for order flow, meaning they process trades through brokers who give them the highest fee, not necessarily the best rate for your investment. As a result, you could be paying more to buy and getting less when you sell investments.

Robinhood is missing several of the investment accounts and trading options found with Fidelity and is also lacking in terms of customer service. You can only request calls, and in-person branches aren’t accessible like Fidelity. Last, Robinhood doesn’t provide as many educational materials as the best online brokers for beginners.

These drawbacks haven’t hurt Robinhood’s popularity, though, especially with the younger smartphone generation. For many investors, the ease of use is worth it.

Robinhood Pros

A very easy-to-use investment app
No commissions or fees on investments
No account minimums
Offers cryptocurrency trading

Robinhood Cons

Not many investment research tools
Earns money through payment-for-order-flow
No retirement accounts
Limited customer support

FAQs

Fidelity vs. Robinhood: Which Is Best For You? ›

Fidelity offers custodial accounts, as well as tax-advantaged retirement accounts. Robinhood doesn't offer custodial accounts, but it offers Roth IRAs and traditional IRAs, and it matches customer deposits 1%. If you're looking for the best broker for IRAs, both Fidelity and Robinhood are worth considering.

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What is the downside to Fidelity? ›

Fees. Fidelity has average trading and low non-trading fees, including commission-free US stock trading. On the negative side, margin rates and fees for some mutual funds can be high. We compared Fidelity's fees with two similar brokers we selected, E*TRADE and TD Ameritrade.

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Is Fidelity a good company to invest your money with? ›

Fidelity remains our top overall choice for best online broker as well as our choice as the best broker for low costs and for ETFs this year. In addition, Fidelity earned top ranks as the best broker for cash management, which are new additions to our best online broker and trading platforms awards this year.

Can I move money from Fidelity to Robinhood? ›

You can transfer stocks, cash, and other eligible assets from your outside brokerages into Robinhood through ACATS. You can transfer all or part of an outside account.

Why should I choose Fidelity? ›

The Bottom Line

Overall, however, Fidelity is a better fit for investors and traders who want a more high-tech experience, technical analysis tools, advanced charting, and access to a broader range of offerings. In fact, Fidelity is our overall pick for the best online broker in 2024, so it is very hard to beat.

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Why is Fidelity better than Robinhood? ›

Fidelity's fee structure is somewhat different, as this platform offers significantly more products and services than Robinhood. Fidelity doesn't charge trading fees or commissions on stocks and ETFs. However, unlike Robinhood, it does charge $0.65 per contract to trade most options.

What is the Fidelity controversy? ›

A former Fidelity Investments financial advisor is suing the company for allegedly firing him for raising concerns that Fidelity was improperly pressuring advisors and branch managers to put clients into high-fee investments.

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Is it safe to have all my money at Fidelity? ›

Protecting your assets

With our Customer Protection Guarantee, we reimburse you for losses from unauthorized activity in your accounts. We also participate in asset protection programs such as FDIC and SIPC to help provide the best service possible.

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What are the cons of trading with Fidelity? ›

Fidelity Cons

No cryptocurrency trading.
No futures trading or paper trading.
Transaction fees for non-Fidelity mutual funds.
Small per-contract fee for options.

Mar 22, 2024

Keep Reading ›

Are my stocks safe at Fidelity? ›

In accordance with SEC Rule 15c3–3, often known as the Customer Protection Rule, Fidelity protects client securities that are fully paid for by segregating them and ensuring that they are not used for any other purpose, such as for corporate investment purposes, loans to investors or institutions, or for spending.

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How much does Fidelity charge to transfer out? ›

Fidelity doesn't charge a fee for sending or receiving EFTs, but the receiving bank may charge a fee. Fidelity also doesn't charge fees to process wire transfers to a bank or other recipient.

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How much does Robinhood charge to transfer money to Fidelity? ›

However, while Robinhood charges $100 to transfer your account off of the platform, Fidelity does not. Trading on margin requires a Robinhood Gold subscription at $5 per month, which includes $1,000 of margin.

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Why can't I withdraw money from Robinhood after selling? ›

If you sell your free stock before the 30 days, you won't be able to access those funds in your withdrawable cash. After the 30-day window, there are no restrictions on the proceeds.

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Why do people like Fidelity? ›

Fidelity offers $0 trading commissions, a selection of more than 3,300 no-transaction-fee mutual funds, top-notch research tools and a mobile platform. Its zero-fee index funds and strong customer service reputation are just icing on the cake.

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Is it smart to invest in Fidelity? ›

From 2022 through 2024, NerdWallet³ has rated Fidelity the Best App for Investing and the Best Online Broker for Beginning Investors. StockBrokers.com⁴ also rated Fidelity #1 Overall Broker in 2022, 2023, and 2024. In 2023, both Barron's⁵ and Kiplinger's⁶ awarded Fidelity Best Online Broker.

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How trustworthy is Fidelity? ›

Is Fidelity a safe company to invest with? Yes, Fidelity is one of the safest brokerages to invest with. It's an industry leader with a stellar reputation and fully regulated in the U.S. with the SEC and FINRA, is trusted by over 43 million people and holds over $11.5 trillion in assets under administration.

What happens if Fidelity goes under? ›

If a brokerage fails, another financial firm may agree to buy the firm's assets and accounts will be transferred to the new custodian with little interruption. The government also provides insurance, known as SIPC coverage, on up to $500,000 of securities or $250,000 of cash held at a brokerage firm.