Trading platforms are easy to find. Selecting the right trading platform for you and your needs may be a trickier proposition. But don’t worry, we’ve got the information you need to make the right decision.
Comparing Interactive Brokers vs Robinhood involves looking at both trading platforms, including who they’re meant for and what features they offer.
We’re comparing them because both have trading apps with some similar features that may appeal to you as an individual investor.
Which platform should you use? Is one better for beginners? Keep reading to learn all about both Robinhood and Interactive Brokers and decide if one of these two investment platforms is right for you.
Overview: Interactive Brokers and Robinhood
We’ll start with a broad overview of Interactive Brokers and Robinhood.
Interactive Brokers (IBKR)
Interactive Brokers, or IBKR for short, is a licensed broker-dealer and a member of FINRA. Headquartered in Greenwich, Connecticut, the company was incorporated in 1993 by founder Thomas Peterffy.
The company’s mission is to make investment technology available to both professional brokers and casual investors to assist them in investing and trading a variety of asset classes. In 2018, they launched IKBR Lite, a commission-free trading platform.
The company has a mobile app, so investors have the choice between using the web platform or going mobile to manage their investments.
As of 2023, Interactive Brokers operates in over 150 market destinations. IKBR and its affiliates execute more than 2.7 million trades per day.
Interactive Brokers users can trade a wide array of assets, including stocks, ETFs, bonds, mutual funds, options, futures, cryptocurrencies, Forex, and commodities such as gold. They also provide a wide array of professional investment tools, including advanced charting and margin trading.
Overall, the Interactive Brokers trading platform is more suited to investors and forex traders who are experienced and eager to undertake more complex and varied trades with advanced trading tools than a beginner would.
Robinhood
Robinhood Markets, Inc. was founded in 2013 by Vladimir Tenev and Baiju Bhatt. Their goal was to make investing as accessible as possible, so they set out to create a commission-free trading app that could be used by anybody.
By the time the app was launched in 2015, there was a waiting list of over 200,000 people who were eager to start their mobile trading adventure. Just three years later, there were two million people waiting for Robinhood to launch cryptocurrency as an available asset.
Today, Robinhood has over 24 million funded accounts and 10 million active monthly users, making it one of the most popular trading apps in the world.
Robinhood is a member of the securities investor protection corporation, SIPC.
Robinhood’s list of available assets is smaller than Interactive Brokers’ list. Users can trade stocks, ETFs, futures, options, and cryptocurrencies. Missing from the list are bonds, mutual funds, Forex, and commodities.
Ultimately, Robinhood is designed to be used by beginners and casual investors who don’t have a lot of experience or who prefer a streamlined interface, although they do have margin trading.
Pro Tip:
Sign up with Robinhood today! You can refer friends to earn up to $1500 per year in FREE STOCK!
IBKR vs Robinhood: Key Features Compared
Here are some of the key features of IBKR vs Robinhood and how they compare.
Experience
Interactive Brokers was first designed with professional brokers and experienced traders in mind. For that reason, the web interface is complex and may be more difficult to navigate than Robinhood. The mobile app has a far simpler interface and is in many ways similar to other investment apps.
Robinhood is a mobile-first company that was designed with beginners in mind. The app interface and menus are user-friendly and super simple to navigate. Trades can be initiated and completed in just a few seconds. There aren’t as many bells and whistles as IBKR, but some beginners and casual investors may prefer that.
Ease of Use
Interactive Brokers’ web interface comes with a bit of a learning curve. It feels like there are a few hurdles to clear, including repeated questions about whether you’re a pro broker looking for advanced trading strategies. For that reason, some casual investors may feel like there’s a barrier to entry or be overwhelmed by the number of options that are available.
By contrast, Robinhood’s interface is extremely simple, with just a few options on both the website and the mobile app. You can choose the type of investment you want to make and execute your first trade in less than a minute. There aren’t as many assets available and overall, the minimal number of trade options make it a more streamlined, if limited, experience.
Research Quality
The research options on IBKR are extensive and include detailed information and charts to help you evaluate potential investments. You can look at pre-set charts or customize to suit your needs.
IBKR provides multiple tools and calculators to help you research investments and understand what you’re buying. One of the coolest features is their trading idea generator. You can use the generator to get creative with your investments, and it’s a tool that’s extremely helpful for portfolio diversification and balancing.
Robinhood offers users some limited research options. You’ll get live market prices and a selection of articles about the market, both of which can help you evaluate stocks and ETFs..
In addition, there’s a learning library with videos and other educational materials. These are mostly geared toward beginning investors and are likely to be too simplified for more experienced traders to benefit from.
Pro Tip:
Sign up with Robinhood today! You can refer friends to earn up to $1500 per year in FREE STOCK!
Investment Options
Interactive Brokers has a long list of investment options that goes far beyond what you’ll find on Robinhood and many other trading platforms. These include:
- Stocks
- ETFs
- Bonds
- Mutual funds
- Cryptocurrencies
- Options
- Commodities
- Futures
- Forex
IBKR gives users access to more than 40 markets worldwide, which is far more than most investment apps.
Robinhood offers a smaller selection of assets, including those that are most interesting and accessible to beginners. These include:
- US stocks
- US ETFs
- 20 cryptocurrencies, including Bitcoin, Ethereum, and Litecoin
- Options for US Exchange-Listed stocks & ETFs
- ADRs for more than 500 globally-listed companies
People who want to engage in more complex trades or who don’t want to have to use more than one app to diversify their portfolios may not like Robinhood’s limitations..
Fees
Interactive Brokers doesn’t charge commission for trades, but traders incur certain regulatory and activity fees as follows.
- Regulatory fees
- Options fees
- Future fees
- Mutual fund fees
For example, the mutual fund fee is 3% of the transaction amount up to a maximum of $14.95 per trade. You can check out their full fee schedule on this page.
Robinhood offers commission-free trading, but there are some fees that you’ll have to pay when you make trades. Here are some of the fees you’ll need to consider.
- Regulatory fees
- Trading activity fees
- American depositary receipt (ADR) fee
- Options fee
- Index options trading fee
Most of these fees are calculated based on the size of your trade, and most are under a penny. Trading activity fees are waived for trades of fewer than 500 shares. ACH transfers are free and there’s a $25 fee for outgoing wire transfers. You can check out the full fee schedule here.
Robinhood vs Interactive Brokers: Who Should Choose Which Platform?
Should you use Robinhood or Interactive Broker? It all comes down to these questions.
- What kinds of assets do you want to invest in?
- How experienced are you as a trader?
- Do you want to do in-depth research on potential investments?
- How much do you want to pay?
Let’s start with Interactive Brokers. It’s most suitable for people who want to invest in a broad array of asset classes, since it offers not just stocks and ETFs, but also bonds, mutual funds, options, futures, crypto, and Forex. It’s the better choice for people who already have some experience trading.
Interactive Brokers offers far more in the way of research options for people who want to get into the nitty gritty of financials and other metrics before executing a trade. On the flip side, the fees are higher than they are on other platforms, including Robinhood.
Robinhood is designed to be user-friendly and attractive to beginners. It has a smaller list of available asset classes, mostly limited to stocks, ETFs, and cryptocurrencies.
If you don’t care too much about digging into the numbers, Robinhood offers limited research options. The fees are substantially lower than the fees for Interactive Brokers.
Pro Tip:
Sign up with Robinhood today! You can refer friends to earn up to $1500 per year in FREE STOCK!
Interactive Brokers vs Robinhood: User Experience Comparison
Both of these platforms have worked to make the user experience good. Interactive Brokers is aiming its services as a more sophisticated and experienced audience. That said, IBKR Lite offers a streamlined experience that may be appealing to investors who don’t have a lot of experience. The web platform is not as simple to use and navigate, and is more suitable for experienced investors who don’t mind a bit of a learning curve.
Robinhood’s user experience is far simpler and more streamlined than IBKR’s. Trades can be completed in just a few taps. With fewer trading options, it’s not hard to select a trade, choose an asset, and fully execute the transaction in under a minute.
Who Should Choose Interactive Brokers?
Interactive Brokers is the platform we would recommend for experienced investors. We’re talking about people who already have a strong understanding of different asset classes and the role they play in a portfolio. It’s rare for an electronic trading platform or app to offer things like mutual funds, bonds, commodities, and Forex, but IBKR has all of these.
An inexperienced investor might find the research and trading options to be overwhelming. That’s not to say that a beginner couldn’t navigate the platform, but there is definitely a learning curve and it may be too steep for some.
Pro and experienced investors won’t mind paying the higher fees on Interactive Brokers because of the features they get in return. There’s a ton of research available, plus analysis tools that include charting and calculators.
Overall, we think that experienced investors will get the most out of Interactive Brokers. If you decide to try it as a beginner, we recommend IBKR Lite, which offers a simpler and more streamlined experience.
Conclusion
Overall, we feel that Robinhood is the better choice for new or casual investors. It offers straightforward trading, an easy-to-navigate interface, and minimal fees. These things combine to create a user-friendly experience that’s ideal for people who are just getting started with investing.
Interactive Brokers is the choice for more knowledgeable and advanced investors, and may even be right for professional investors. Its more complex trading options, intensive research, and wider range of asset classes make it ideal for people who are serious about investing.
Ultimately, you should choose the platform that aligns with your personal trading goals, investment style, and budget.
FAQs
In most cases, we would recommend Robinhood for beginners. It’s a more simple and straightforward platform with limited trading choices and low fees. However, beginners should keep in mind that as they move through their investment journey, they may need another platform to allow for portfolio diversification.
Yes and no. Robinhood doesn’t offer stocks that trade only on foreign exchanges. However, you can invest in ADRs for globally-listed companies.
Robinhood’s fees are lower than IBKR’s fees overall. Part of that is because IBKR offers more asset classes and trades, and some of the fees for things like mutual funds are higher than anything Robinhood charges.
