Until recently, one of the biggest barriers to investing was the cost. But with trading apps like Robinhood and Webull — which have zero-commission trades and $0 minimum balances — investing has become accessible to all.
Overall, Robinhood and Webull are similar — both offer crypto, options trading, and margin accounts. But some key differences might sway you one way or the other. Webull, for example, offers individual retirement accounts, while Robinhood lets you purchase fractional shares.
Today, I’m going to dig into how these two low-cost trading apps compare.
Webull vs. Robinhood — Which Free Trading App is Best?
About Webull
Launched in 2017, Webull is a mobile-first online stock trading app. Webull has joined a list of other trading apps with zero-commission trade, no deposit minimums, and low fees.
One of the first things you’ll notice about Webull is its robust trading platform, complete with in-depth analysis, customization, and more. You can take a macro look at the overall market structure, then focus on individual securities. When you check out the platform, which you can do before you create an account with Webull, you’ll immediately see why this is an ideal platform for active investors.
You can trade stocks, options, crypto, and ETF on Webull, and you can trade on margin. It offers individual brokerage accounts and both Roth and traditional IRAs, which already sets Webull apart from Robinhood, which doesn’t offer IRAs.
Webull has continuously added to its lineup of features since launching: it added IRAs in 2019 and crypto trading in 2020.
Read more at: Leaving Robinhood? 9 Robinhood Alternative That are Better for Investors
About Robinhood
Founded in 2013, Robinhood was one of the first investing apps to offer zero-commission trades. And it made a name for itself intending to “democratize finance for all.”
Robinhood users can trade stocks, options, ETFs, and cryptocurrency. It’s risky, especially for uninformed inventors, but you can trade on margin with Robinhood.
Even though Robinhood doesn’t offer taxable retirement accounts, it provides fractional shares. This is appealing for new investors who feel like they don’t have a lot of money to start investing. It also offers a cash management account to put uninvested cash to work for you, and it has an APY of 0.30%.
Robinhood vs. Webull: Fees
Both Robinhood and Webull are known for being a low-cost alternative to traditional brokerage with zero-commission trade. Neither charges commissions on stocks, ETF, or options contracts. There are also no account minimums for either trading app.
Webull and Robinhood charge transfer-out fees — the cost to move securities from one brokerage to another. Both charge $75 for outgoing transfers, and it’s not a fee you’ll notice unless you want to leave either brokerage and not cash out.
You’re going to see the most significant difference in fees when it comes to margin loans. Because this is borrowing money from your brokerage to trade, you pay interest on that amount. Here’s how Robinhood and Webull compare:
- Webull margin rate: Charges tiered pricing — 6.99% on balances of $0 - $25,000, and rates go down to as low a 3.99%.
- Robinhood margin rate: First $1,000 of margin is included with a $5 monthly subscription to Robinhood Gold, and there’s a flat 2.5% yearly rate charged on any amount beyond $1,000.
Robinhood Gold is a premium service that comes with instant access to larger deposit amounts, Level II market data, Morningstar research, and access to investing on margin. It’s $5 a month.
Overall, both are similar unless you’re interested in trading on margin. Robinhood clearly has better rates for inventors.
Read more at How Does Robinhood Make Money?
Webull vs. Robinhood: Account types
Webull investors can open both individual brokerage accounts and taxable retirement accounts. Neither kind of account has opening, closing, or annual fees. The retirement accounts you can open with Webull are Roth, traditional, and rollover IRAs. Robinhood only offers individual brokerage accounts.
If you want to use either for retirement savings, Webull is the clear winner here.
Self-employed? Learn about your retirement account options here.
Webull vs. Robinhood: Investment options
Until very recently, Robinhood had a significant edge when it comes to investment options. But since Webull rolled out options trades and cryptocurrency in 2020, both offer inventors access to the same kind of investments.
Neither trading app offers mutual funds, bonds, forex — investments you’ll find with larger brokerages like Vanguard, Charles Schwab, or Fidelity. This is worth mentioning if you’re interested in opening an IRA with Webull, because mutual funds and bonds are typically seen as solid investments for various points in your retirement savings.
Despite a lack of options, Robinhood still shines here compared to Webull because it offers fractional shares. Buying fractional shares is when you purchase a portion of a share instead of the whole thing.
For example, instead of paying $128.93 for a single share of Apple (where the price was when I was writing this Robinhood review), you can pay $1, and own 0.78% of an Apple stock. Robinhood lets you purchase fractional shares down to 1/1000000 of a share.
Many brokerages have started offering fractional shares, and they’re part of micro-investing apps Acorns and Stash’s business model. One of the perks of fractional shares is that you can put uninvited cash to use right away instead of sitting idly in your account. It’s why Robinhood now supports a dividend reinvestment program (DRIP), which is a great way to put your earnings to work.
Robinhood even supports fractional shares on some cryptocurrency trades.
Robinhood vs. Webull: Margin trades
This feature isn’t for new investors because it’s pretty risky — you’re borrowing money to purchase stocks or other securities, and you can lose more than you borrow.
If you understand the risk and are up for it, both Robinhood and Webull offer margin lending. But there’s a pretty large difference in the costs associated with margin lending depending on which platform you use.
You need to subscribe to Robinhood Gold to access margin lending, and it’s a $5 monthly subscription. Robinhood then gives you the first $1,000 of margin without any fees. Above that, you pay a 2.5% yearly interest fee.
Webull requires that investors have an account balance of $2,000 to start investing on margin, and Webull charges a tiered annual rate based on the size of your margin loan. You’re charged 6.99% for margins up to $25,000. The rate drops by 0.50% at each tier, down to 3.99% annually for margins of $3,000,000 or more.
Webull vs. Robinhood: Research and analytics
Webull should be a strong contender for active investors because it gives you access to in-depth analytics, which are at the core of Webull’s robust trading platform. You can take a macro view to see which sectors are leading and lagging, plus check emerging stock trends.
Webull has incredible charting options too: candlesticks, bar, line, and Heiken-Ashi (a different kind of candlesticks). You also get cash flow reports, income statements, balance sheets, streaming news, and Morningstar reports.
You can even practice trades on Webull with a paper trading account. It’s basically a trading simulation that lets you test a strategy with fake money before employing it on a live account.
Overall, Webull is giving you a lot of information for no additional cost, and that’s impressive. All of that reporting is in Webull’s trading platform, which could feel a little overwhelming. But active investors will thrive there.
Robinhood lags here compared to Webull. You have to pay for Robinhood Gold to gain access to Morningstar reports and Level II market data. Overall, there’s very little real-time data active investors need to stay on top of what’s happening with the market and their investments.
Robinhood vs. Webull: Cash management
More and more online brokerages offer cash management accounts, which lets investors do more with uninvested cash. Robinhood’s cash management account sweeps uninvested cash into an account that currently earns 0.30% APY. It also comes with a debit card issued by Sutton Bank, which you can use anywhere that accepts debit cards.
Robinhood gives you another option for uninvited cash: DRIP (dividend reinvestment program). DRIP automatically reinvests cash dividend payments back into the underlying stock or ETF. Robinhood can do this because it offers fractional shares, and you’ll have to enable DRIP if you want to use it.
Not all Robinhood investments are eligible for DRIP, but any dividend-paying stock or ETF that supports fractional shares is eligible.
Webull currently doesn't have any of these cash management features. I wouldn’t be surprised if it releases something in the future, but Robinhood shines here in the meantime.
Webull pros & cons
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Robinhood pros & cons
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Webull vs. Robinhood: Is Webull better than Robinhood?
For active traders, Webull is a solid alternative to Robinhood. It has incredibly comprehensive analytics and an impressive mobile and web platform. But if you’re a casual trader, Webull’s platform is going to feel like you’re trying to fly a spaceship. Robinhood will be much easier for newbies.
It honestly comes down to what you’re looking for. Robinhood offers fractional shares, cash management, and lower rates on margin loans. Webull gives you a retirement account and better reporting.
Either way, both trading apps are low-cost with a lot to offer investors.
FAQs
The biggest difference between these two is that Robinhood offers fractional shares and cash management. Webull has better analytics and retirement accounts. Overall, these two trading apps have become more similar in recent years, especially now that Robinhood offers options trades and Webull introduced cryptocurrency.
Yes, you can have both Robinhood and Webull. However, day traders cannot use multiple platforms to get around day-trading limits.
Yes and no. Webull doesn’t charge commissions, trading fees, or maintenance fees. But you’re still paying FINRA and SEC trading fees, which is standard across all brokerages, including Robinhood.
Free stock trading apps can offer free trades because of how they make money. That’s through payment for order flow (PFOF), which sells your trades to a high-frequency trader to execute at better rates. Webull and Robinhood also make money on margin fees, short selling fees, earning interest on your uninvited cash, and miscellaneous administrative fees.
You can trade options on both Webull and Robinhood. Webull options trading is $0 commission, as with Robinhood, but regulatory and clearing fees are associated with options contracts. These fees are fairly small per contract or trade. For example, the SEC charges $0.0000051 per total trade amount on sales. There’s a $0.01 minimum on this fee.
About Millennial Money Man
Bobby Hoyt is a former band director who paid off $40,000 of student loan debt in 18 months on his teaching salary and then left his job to run Millennial Money Man full-time. He helps other Millennials earn more through side hustles, save more through budgeting tools and apps, and pay off debt. He is a personal finance expert who has been seen on Forbes, Reuters, MarketWatch, CNBC, International Business Times, Business Insider, US News, Yahoo Finance, and many other personal finance and entrepreneurship media outlets.
