Robinhood vs. Webull: Which is Better? (2024)

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Robinhood vs. Webull: At a Glance

Robinhood Investing and Webull are fairly well-matched when it comes to fees, account options, and investment opportunities.

But Robinhood is the better choice for folks looking for retirement savings accounts as Robinhood's traditional and Roth IRAs offer a 1% match on investor contributions. Webull Brokerage is better for options trading and passive investors because of its new smart advisor.

Webull's new smart advisor is an automated investing account that utilizes quantitative analysis and insights to make smart investment decisions for your financial goals (majority stocks and ETFs).

You can receive a customized portfolio by inserting data like your time horizon, risk tolerance, and goals. It also offers a range of beneficial account tools like auto-rebalancing and a performance tracker.

Is Robinhood Right for You?

Robinhood Investingis one of the best investment apps for active retail investors and margin traders. With commission-free trading on several US-listed investment options, education savings accounts, high-yield cash management offerings, and a decent selection of cryptocurrencies, Robinhood is best suited for beginner crypto-investors.

Robinhood Pros and Cons

Investing with Robinhood

You can primarily trade six different types of asset classes: stocks, ETFs, options, ADRs, IPOs, and cryptocurrencies. Robinhood has a $0 account minimum requirement on its individual brokerage accounts, but you'll need at least $1 to trade fractional shares.

To access margin trading, you must be a Gold member and have at least $2,000 in your account.

Its account selection includes:

• Individual brokerage accounts
• Cash management accounts
• Retirement accounts (traditional IRAs and Roth IRAs)
• Margin accounts

On the crypto side, Robinhood lets you trade 18 digital assets including bitcoin, ether, dogecoin, and more. Crypto sales have no commission fees and you only need $1 to start investing.

IRA accounts offer $0 trading commissions, a 1% match on every dollar you contribute (with no cap), recommended portfolios with Robinhood's portfolio builder, and more. You also get SIPC account protection up to $500,000.

If you're planning to use Robinhood Gold, know that it has a $5 monthly fee. But this membership includes access to Morningstar professional research, market data from Nasdaq, and instant deposits up to $50,000.

Robinhood review

Account Features

Robinhood offers a virtual library that contains an array of financial education articles on investing, options trading, and other topics. The downside is that you won't be able to access additional research and market insights unless you're a Robinhood Gold member.

Gold members are eligible to earn 5.00% APY on non-invested funds through the Robinhood Cash Management Account (only 1.50% APY for non-gold members).

Robinhood currently has margin rates of 12% for non-gold members, and 8% for gold members.

Non-gold members can access IPOs, recurring automatic payments (select daily, weekly, bi-weekly, or monthly options), 24/7 customer support, and guidance on first trades. Robinhood now offers crypto wallet access.

Is Robinhood Trustworthy?

Robinhood Investing has a D rating from the Better Business Bureau due to a pattern of complaints that users were unable to withdraw funds from their investing accounts. The brokerage account also took a hit because of the government actions taken against the business.

In 2023, Robinhood entered into an agreement with the Commissioner of Financial Protection and Innovation when the CFPI claimed Robinhood provided negligent information for margin trading and risk to Robinhood users and operated under an inadequate identification program. Robinhood agreed to a $10.2 million penalty.

Robinhood came under intense scrutiny in late January 2021 after it paused trades of Gamestop and other popular stocks. It reopened trading, but this also brought more attention to Robinhood's payment for order flow (PFOF) practices. A federal court in Miami later dismissed the casein November 2021.

Is Webull Right for You?

Webull Brokerageoffers $0 account minimums, commission-free trading, and extended hours trading, making it a competitive option for active traders in search of low fees and flexible market access. Also, passive investors can access Webull 's smart advisor account for automated investing, personalized risk distribution, customer portfolios, and more for a $1 minimum monthly fee and a 0.20% annualized fee.

Webull Pros and Cons

Investing with Webull

Webull's investment choices include stocks, ETFs, options, OTCs, ADRs (shares in foreign companies), fractional shares (starting at $5), and cryptocurrencies. The commission-free rule applies to stocks, ETFs, and options trading, but Webull also works with regulatory agencies and clearing firms that apply small fee deductions (usually no more than $0.050) on each trade.

You can invest in the following accounts:

• Individual brokerage accounts
• Retirement accounts (traditional IRAs and Roth IRAs)
• Cash management accounts
• Margin accounts
• Automated accounts

With a margin account, you borrow from your brokerage and pay back the loan along with an annual margin interest rate. But keep in mind that you need at least $2,000 in your account to access margin trading features.

Cryptocurrency traders should note, however, that Webull also doesn't allow you to transfer crypto into or out of your account. This means that your assets are essentially locked into the brokerage. This prevents you from moving them to a bitcoin wallet or other crypto exchange.

On the retirement side of things, the firm offers traditional IRAs, Roth IRAs, and rollover IRAs. The difference between Webull's standard brokerage accounts and IRAs is that the retirement accounts only allow you to invest in stocks and ETFs.

Webull Investing review

Account Features

You can access great account features like Nasdaq-sponsored market data, free real-time investment quotes, 24/7 customer support, portfolio rebalancing (on automated accounts), paper trading, and recurring investment options.

Webull's margin annual rates range from 5.74% to 9.74%, depending on your account balance.

It's also important to note for cryptocurrency traders that Webull doesn't allow you to transfer crypto into or out of your account. This means that your assets are essentially locked into the brokerage. This prevents you from moving them to a bitcoin wallet or other crypto exchange.

Webull's cash management account now offers a 5.00% APY on uninvested cash.

Is Webull Trustworthy?

Webull has received an F rating from the Better Business Bureau. The BBB uses a grade range of A+ to F when rating companies, so Webull has received the lowest possible score. According to its website, the BBB has given Webull an F for multiple reasons, including government actions against the brokerage and Webull's failure to respond to customer complaints.

FINRA fined Webull $3 million on March 9, 2023, claiming Webull had customer approval violations, such as mistaking ly approving 9,000 accounts for options trading. Webull neither admitted to nor denied FINRA's findings. The brokerage agreed to a settlement and pledged to fix the previous issues, including establishing a supervisory system for overseeing its due diligence system. It's currently undergoing this process.

Like Robinhood, Webull also paused the buying of Gamestop and other stocks in 2021. The brokerage — which receives PFOF — also reopened trading on the stocks it had previously restricted.

Which is Better: Robinhood or Webull?

When it comes to standard brokerage fees, Webull and Robinhood are very similar. The two mainly differ in account types, account features, margin rates, and investment research.

You should consider Webull if you're a passive or hands-off trader who likes the convenience of automated investing. Along with its low-cost products, Webull offers extended hours of trading, free real-time quotes, Nasdaq market data, and 24/7 customer support.

While Robinhood Investing and Webull share the $2,000 margin account minimum, Webull has the lowest potential margin rate at 5.74%, but only accounts of more than $3 million can reach this rate. So depending on how much you plan on being in your account, you may find that Robinhood is actually better.

There's also another distinction worth addressing: Robinhood offers a 1% match on IRA accounts but Webull doesn't. Therefore, if you're opening a retirement account, Robinhood is the better bet between the two. It's also the best option for crypto trading as Webull doesn't allow crypto trades to be moved in or out of its account.