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Before you can make an investment, you'll need to open a brokerage account to place your trades.
Let's take a deeper look. Cost is but one consideration when deciding on a broker.
If price is of particular importance, continue on. The gap in commissions isn't as large as it may seem.
Investors can generally avoid some commissions and transaction fees by buying and selling ETFs and mutual funds that are designated as commission-free or no-transaction-fee NTF.
Notably, Robinhood doesn't charge a commission on any trades, and that also applies to ETFs. However, it doesn't offer the ability to invest in mutual funds.
E*TRADE Financial | Investing, Trading & Retirement
Ultimately, depending on the funds you want to invest in, either broker may better suit you. You don't need to be rich to open a brokerage account. Realistically, investors may want to start with more than the bare minimum. For practical purposes, to actually make an investment, you'll need to have enough capital to buy at least one share of a stock, ETF, or mutual fund and cover the commission cost.
Furthermore, we should note that brokerages often reward their customers for making larger deposits. Learn more about special offers for IRA accounts , as well as traditional brokerage accounts. We at The Motley Fool firmly believe in the principles of making long-term investments for years, rather than days or weeks. For long-term investors like us, the important thing is that we can just make a trade when we need to, and virtually any trading platform can handle that basic requirement.
Much like debates over the best superheroes, we tend to think personal preference and opinion underlie preference for a trading platform. Robinhood is a mobile-only platform, which may be a roadblock for people who don't have, or do not want to use, a smartphone or tablet to manage their investments. We prefer to take the long view rather than be slaves to our trading accounts.
Robinhood allows investors to trade certain foreign-domiciled securities. If you prefer funds to individual stocks, the ability to access international stock exchanges might not be an important difference between these two brokers.
E*Trade vs. Robinhood: Does Free Stock Trading Win Out? -- The Motley Fool
Generally speaking, we tend to think that investors can benefit from having access to proprietary and third-party research. In the worst case, many services are a free benefit, so there isn't anything to lose from research that you don't use. Robinhood doesn't currently offer research capabilities, which is a trade-off that comes with its no-commission business model. If the ability to trade on a mobile device is important to you, you'll be pleased to find that both brokerages have that capability.
Depending on your needs, either broker could be a good pick. Robinhood has a clear advantage on trading costs given its no-commission business model, but it doesn't currently offer research or the ability to trade options or invest in mutual funds.
The Motley Fool doesn't endorse any particular broker, but we can help you find the broker that is the best fit for you.
Jordan Wathen has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Jordan is a value investor who believes incentives matter. Moats, floats, and compelling valuations. Skip to main content The Motley Fool Fool.
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Dec 25, at 5: