Fidelity has been in the investment game for decades and has continued to set the gold standard for brokerage firms. Meanwhile, newcomer
Robinhood, whose main selling point is its no-cost trading, has been slowly losing its slice of the market share as more online brokers have rolled out commission-free trading. While more Reddit users recommend Fidelity Investments over Robinhood, some use these brokers alongside each other, as keeping an account on Robinhood still has its advantages. Below are some of the most informative comments from Reddit users who have used Robinhood and Fidelity. Robinhood vs Fidelity Investments on Reddit Robinhood remains a great option for traders who want free stocks and options trading while Fidelity offers a wider range of products that make it the better choice for everything else If you’re looking to save for retirement or invest in mutual funds and bonds, Fidelity is a no-brainer for you What catapulted Robinhood’s popularity is its promise of commission-free trading and simple, streamlined interface. Beginners of trading will find Robinhood and the lower financial risk it requires a good place to start. However, its bare-bones platform and limited offerings prompt those who want to take their trading and investments to the next level to look elsewhere. Robinhood lacks Fidelity’s wide range of products for long term investments. Reddit user ServerOfJustice has the following advice for a Redditor who’s looking to save for his retirement: Like many others, Reddit user DLVRY has an account on both Robinhood and Fidelity, but uses them for different purposes. It seems to be a common theme for many Redditors who go to Fidelity for their long term investments while also taking advantage of Robinhood’s free trading. As Redditor DLVRY explains:
As mentioned above, Fidelity also offers free stocks and ETFs. However, it is worth noting that its options trading has a fee of $0.65 cents for every option contract. On Robinhood, on the other hand, you can trade stocks, options, and ETFs at no cost.
Dividend Reinvestment Unlike Robinhood, Fidelity allows automatic dividend reinvestment Something many Redditors don’t like about Robinhood is its lack of automatic dividend reinvestment Another reason why some traders leave Robinhood is it doesn’t offer dividend reinvestment. As Reddit user WeenisWrinkle puts it: Despite its lack of dividend reinvestment features, Robinhood still has some advantages. Reddit user fsu_ppg details them in his comment: Robinhood vs Fidelity Investments Comparison Chart
Investing Platform Robinhood Fidelity Investments Account Minimum $O $O Commission Fee Free Free stock and ETF trading, $0.65 cents for every options contract, $.03 to .05 Options Regulatory Fee for every contract Account Types Individual Brokerage Account Retirement and IRA, Brokerage, Education Cryptocurrency Trading Yes No Fractional Shares Yes Yes Short Selling No Yes Stocks, ETFs, Options Yes Yes Mutual Funds, Bonds, Futures, Forex No Yes Cash Management Yes Yes IPO Investments No (Only limited pre-IPO) Yes Research Tools Basic Advanced Verdict New users who want to dabble in trading will find Robinhood and its no-frills platform sufficient, but more serious traders and long-term investors should go for Fidelity Investments instead Fidelity Investments is undeniably the better broker that can meet the needs of long-term investors and active traders alike. It has an intuitive interface, offers a wide range of assets and products, and provides extensive research tools to keep you informed on market trends. However, if you want to trade options, prepare to pay for the option contract fees. While Robinhood cannot compete against the investment giant, the Palo Alto-based company still provides attractive reasons to keep a Robinhood account: its commission-free options, crypto trading, and fractional shares. As keeping a brokerage account on both Robinhood and Fidelity requires $0 minimum, it only makes sense that some Reddit users take advantage of the strengths of both investing platforms.