Fidelity vs. Robinhood: Comparison for 2024

Fidelity Investments and Robinhood are two of the most well-known investment options. However, they have many differences between them. While Fidelity is a well-established brokerage service with a variety of investment offerings and other services, Robinhood is a relatively new platform primarily designed for less-skilled investors. 

So, Fidelity vs. Robinhood: which one to choose? Our review explains these trading tools in more detail, analyses their services, costs, and many other features to help you decide which one is the better choice for you.

What is Fidelity?

Founded in 1946, Fidelity is a well-established brokerage company with over 40 million investors and 2.4 million average trades per day. The company offers a variety of services and financial products, including financial planning and advice, wealth management, investing plans, and more. Of course, Fidelity also provides brokerage services, allowing users to trade a wide range of securities, including stocks, ETFs, bonds, and options. 

What is Robinhood?

Robinhood is a financial services company headquartered in Menlo Park, California. The Robinhood investment app was launched in 2013. The Robinhood owners, Vladimir Tenev and Baiju Bhat, designed a game-like platform for ordinary people with no budget and enabled them to enter the world of finance.

This trading platform is driven by modern technology and design for both traditional securities, including stocks, ETFs, and options, as well as for cryptocurrencies. As our Robinhood review found out, this is one of the most popular mobile trading apps for Bitcoin trading. 

Robinhood vs. Fidelity - Ease of Use 

Robinhood offers a newbie-friendly user experience, while Fidelity provides a more robust UI system that’s still very easy to navigate. Both services are simple enough for new users, but Robinhood is more streamlined and has fewer features.

To open an account with Fidelity, you need to navigate through the website and enter your personal information. If you can’t find what you’re looking for, the site has a search button at the right upper corner. The Robinhood sign-up process is easy and quick. After entering your personal information such as ID, home address, and Social Security Number, the company will send you the account approval within one hour. 

Both Fidelity and Robinhood provide great web-based platforms for trading, but Robinhood is primarily designed for smaller screens. It’s a better choice for investors who use mobile devices to invest, while Fidelity provides a unified experience across all platforms.

Trading Experience 

The Robinhood trading platform doesn’t offer all the bells and whistles that experienced traders would like to see. However, beginners wouldn’t mind using only its basic functionalities for trading. After all, Robinhood is designed primarily for them. 

On the other hand, the Fidelity trading platform allows traders to trade from charts and place basket trades. Users can also use hotkeys and set trade defaults. 

There is a difference between Robinhood and Fidelity mobile apps, too. Fidelity’s mobile app offers more comprehensive trading tools and features. Generally, you can use almost all tools available on its web version, including portfolio management tools, the ability to place conditional orders, real-time market updates, and more. Robinhood falls short when it comes to comprehensive mobile trading tools and features.   

Available Securities 

When choosing between Robinhood or Fidelity, you should know what securities you can trade on these platforms to make the right decision.  

Fidelity allows you to trade a wide range of assets, including stocks, ETFs, and options. Trades can also trade mutual funds, bonds, fractional shares, and CDs. Unfortunately, Fidelity doesn’t enable futures or cryptocurrency trading.  

When it comes to Robinhood, the types of securities you can trade are limited. The brokerage service enables stock and ETF trading. Robinhood options are also available, but you cannot trade mutual funds, bonds, and futures. You can buy and sell Bitcoin, Ether, Dogecoin, and other cryptocurrencies, though.

Order Types

When it comes to Fidelity vs. Robinhood pros and cons, order variety is another area where the two platforms have unique strengths and weaknesses. Robinhood platform enables market orders, limit and stop orders, stop-limit orders, and trailing stop orders. Conditional orders are not allowed, though.

Fidelity allows market orders, limit orders, stop orders, trailing stop orders, and conditional orders. Versatile order types at Fidelity are available on both the web platform and the mobile app. However, the latter doesn’t support conditional orders. 

Portfolio Analysis

Robinhood allows you to create and customize stock or cryptocurrency watchlists. This way, you can track assets that you are interested in the most. Like other similar trading platforms, Robinhood allows you to see real-time sales prices.

The market data includes information about the last sale, the best asking price, and the best bid. Although Robinhood’s portfolio analysis is not as comprehensive as what some other brokerages offer, you can get plenty of helpful information. You can see the value of an asset over time and your buying and selling history.

If we compare Fidelity investments vs. Robinhood in terms of the investments portfolio, Fidelity definitely boasts more features. The platform offers stock analysis and fixed income analysis. You can also track your realized and unrealized losses and see your account balances and buying power.  

Educational Resources 

Robinhood is praised by thousands of users worldwide, but the app isn’t very big on educational resources. The platform has “Snack,” Robinhood’s source of financial news and some video materials on YouTube. The Learn page also offers articles explaining investing basics and some market-related topics. That said, it could use more investment guides and tips for new investors. 

Fidelity has a pretty decent Learning Center filled with webinars and finance-related articles. While it does offer a bit more in the way of educational materials, both Robinhood and Fidelity could benefit from providing more robust learning resources.

Costs 

Robinhood is famous for being an almost fee-free trading platform. The only costs that you’ll have are when using ACAT outgoing transfers, which will set you back $75. Unless you want to trade on margins, a Robinhood basic account is all you need, and it comes with zero monthly fees. The Gold allows margin trading but costs $5 per month. 

Fidelity doesn’t require any opening deposit and charges $0.65 per contract for options trading. It also offers very low margin rates, depending on your outstanding margin balance. For example, for debit balances between $0 and $24,999, the margin rate is 8.325%, but it gets to just 4% for debit balances over $1m.

Customer Service

The difference between Fidelity and Robinhood is in the customer service they provide. While Fidelity offers both live chat and phone support, Robinhood limits you to chat support only. Alternatively, you can leave your phone number, and the agents will call you. However, you cannot contact the support team by yourself this way. 

Conclusion

Although Robinhood claims to be built for active traders, we would recommend this for new to intermediate investors. Fidelity’s platform suits both new and experienced traders, offering more options but also keeping things fairly simple for newcomers.

Both Fidelity and Robinhood have trading experiences that will be suitable for new investors, but we think Fidelity has a clear advantage in this category because of its ability to serve investors of all experience levels. So, before you start with online trading, be aware of your skills. 

When choosing between the Fidelity app vs. the Robinhood app, it’s also important to know which securities you want to trade. There are more offerings with Fidelity, but Robinhood is a better choice if you want to trade cryptocurrencies. Fidelity’s order types are more versatile, and it offers better features for portfolio analysis. It also has a slight edge when it comes to educational materials, but both platforms could improve in this area.