Webull vs. Robinhood: Which Investing App is Best in 2022?
With the ever-evolving AI investment software becoming more potent each day, trading is an industry that requires its users to stay up to date with what’s happening.
In addition, using the latest investment platforms to get the job done is critical if you want to stay on top of things.
However, comparing Webull and Robinhood side-by-side is tricky because they serve different investors with varying needs.
Amongst other things, Robinhood is designed for people who are just getting started in investing, while Webull provides more sophisticated trading instruments.
In this article, I’ll compare how Webull and Robinhood stack up against each other, based on what they offer investors.
By the end of this article, you’ll be able to decide if either of these apps is right for you and if so, you’ll know which one to go for.
Let’s get right into it.
Let’s start with an individual overview of the two platforms.
In 2013, Robinhood opened up its operations.
Individual brokerage accounts, margin accounts, cash management accounts, and more are all accounts that have been offered on the platform since its inception.
You may also trade various asset classes when it comes to investment alternatives, including stocks, options, exchange-traded funds (ETFs), ADRs, and most recently, cryptocurrencies.
Although Robinhood does have a $0 account minimum on its brokerage accounts, you must deposit at least $1 to trade fractional shares.
If you want to borrow money on your Robinhood account for trade margin, you’ll need a minimum of $2,000 in the bank.
Overall, Robinhood might be a good fit for active traders, specifically day traders who want to avoid high investment fees, and margin traders searching for an alternative to costly trading platforms.
Webull is a relatively new brokerage firm established in 2017 that provides various online trading services.
Individual brokerage accounts, individual retirement accounts (IRAs), and margin accounts are part of the investment software’s wealth-building solutions.
Investors can choose from various low-cost investment choices, including commission-free accounts and rollover IRAs offered by Webull.
There is also a focus on retirement when trading with Webull, which we’ll get into in the next section.
Let’s now explore the various things you can do on Robinhood in more detail.
Using the Robinhood app found on Android and iOS, you can invest in equities, options, and ETFs.
Robinhood’s Crypto section also lets you trade cryptocurrencies like Bitcoin, Ethereum, and Dogecoin – directly from the app.
With no account requirements and commission-free trades, this is an excellent option for investors who want to leverage volatility.
It’s important to note that other fees may occur while trading using the app and are dependent on various market factors.
The upside is that whether you’re a novice buyer or an experienced trader, resources are available to help you invest.
They also send you a free stock as a welcome bonus when you get started.
The virtual library on Robinhood provides a wealth of information about investing, options trading, and other financial topics.
The bad news is that you won’t be able to study further or have access to market analysis while using the free version.
On the cryptocurrency side, Robinhood allows you to trade cryptocurrencies such as Bitcoin, Ether, Doge, and others.
However, one thing to remember is that you can’t move funds between your account and other crypto firms due to their policy regarding cryptocurrency services.
This means that Robinhood may be inconvenient for crypto investors who wish to trade existing assets into the service or transfer cryptocurrency out of the firm.
If you want to take things to the next level, the Robinhood gold plan costs $5 a month.
Included in it is access to Morningstar, which brings you better market data and more significant deposits for the same price.
With unlimited access to Morningstar’s premium, you also get in-depth research reports about various stocks that might be worthwhile investing in.
Let’s now look at some of the key features offered by Webull.
Webull is a good choice for customers looking into a retirement account.
The platform was built with this in mind, allowing you to manage such accounts from a single location.
In addition, if you have a Roth IRA with another company, you can transfer it to Webull and manage both accounts in one place.
In comparison, Robinhood does not offer retirement accounts, so this is a big plus when thinking about the two apps.
Margin accounts allow investors to borrow money to execute transactions.
When you take a loan from your broker, you must return both the advance and the interest owed on it each year.
This means that you might have to pay interest on money borrowed against your shares.
Webull offers margin lending based on a 3.99% to a 6.99% range, all based on your account balance.
Webull is an excellent option for active traders, and it enables you to manage your cash correctly.
These cash management options are created with convenience in mind, ensuring that you have the tools you need.
When it comes to managing your cash, Webull enables traders to set up personalized reminders for when they will initiate a particular trade or investment.
These reminders can help you stay on track and keep you from forgetting about a vital trading opportunity.
In a nutshell, Webull is more difficult to use than Robinhood.
In addition, Robinhood enables investors to access stock education and information about trading options.
For new investors, it is good to start with Robinhood and slowly learn the ropes by reading the articles provided for free while familiarizing yourself with investing.
On the other hand, if you have experience trading or have been doing it for years, Webull might be an excellent option because of its advanced options.
Suppose you are worried about the lack of high-quality information available on the internet.
In that case, Robinhood has many articles, videos, and tutorials that you can read through, or watch, to gain more knowledge.
Now that we’ve looked at both platforms’ top features let’s look at some of their pros and cons.
Here are some of the main advantages offered by Robinhood:
- Secure and straightforward to use.
- You can easily trade on your phone while on the go.
- Commission-free trading for equities, options, ETFs, and cryptocurrencies is available.
- Fractional shares and margin accounts are available so that you can invest as needed.
- Cash management accounts allow you to keep track of your transactions and investments.
- Their desktop platform and mobile app are beginner-friendly.
These are the cons of using Robinhood:
- You won’t be able to move your cryptocurrencies from one account to another, so you’ll have to use a different investment platform to do so
- IRAs, trusts, joint accounts, and custodial accounts are not accepted, limiting the number of available services.
- Users can’t choose a beneficiary or set up a transfer on death option. These are both excellent features to have in a system.
Now that we’ve looked at Robinhood’s pros and cons, let’s look at Webull’s.
Here are the pros of using Webull:
- No minimum account balance means you can start investing even with very little capital
- You can trade commission-free on US-listed equities, ETFs, and options, so you won’t have to pay fees
- Margin accounts are offered, meaning that you can borrow money from your broker to purchase assets
- Instant, free real-time stock quotes give you the latest market information
Here are some of the cons of using Webull:
- Education savings accounts, joint accounts, and automated accounts are not something that Webull offers.
- You can’t move crypto from one Webull account to another, so you’ll have to use a different trading platform if you want to trade using crypto.
- Only US-based equities and ETFs are available, meaning that international investors will be limited in their options.
- Limited resources for your education mean that you will have to invest time and energy into finding educational resources from other sources.
- There are no mutual funds or fractional holdings available on the platform
Let’s now consider the two platforms side by side:
Cash management accounts, individual brokerage accounts, and margin accounts are all available on Robinhood.
The above are also available on Webull, minus cash management accounts.
However, Webull does offer IRAs on its platform.
Both platforms offer ETFs, options, stocks, ADRs, and cryptocurrencies as investment choices.
Neither of these two platforms offers advice before one executes trades.
This means there is no input from professionals, whether from a human expert or even a robo-advisor.
Robinhood provides a broader range of investment alternatives, with stock trading, fractional shares, and options trading all being possible.
Both Robinhood and Webull provide investors with access to 0 total mutual funds when it comes to mutual funds.
All of this means that one or the other might be a better fit for you, depending on your investment goals.
Some online brokerages provide banking services to investors, and online banking may be helpful for them.
Robinhood users can use debit cards to purchase stocks, bonds, and mutual funds.
Webull does not provide any of these features.
Depending on your specific needs, one platform might be a better choice than the other.
Webull and Robinhood both offer free stock trading and cryptocurrency exchange, but there are some advantages to one over the other.
Both platforms provide high-quality apps and user interfaces that make investing accessible to nearly anyone and can be used by investors at different skill levels after an initial learning curve.
Robinhood may be better for cash management accounts where Webull has the edge in terms of IRAs.
Based on your needs, either platform could be a good option.
Here are some of the most important factors to consider when choosing your platform.
A brokerage account with extended hours trading is highly recommended if you want to make sure that your orders and trades go through even when the market isn’t open.
Having the opportunity to place orders anytime during market hours is very valuable.
Generally, it affects your trading because you can buy or sell whenever you feel like it and don’t have to wait for regular market hours or opening/closing times of markets.
This could be an issue depending on the timezone that you are in.
Some brokerages offer to trade in the stock market only.
These aren’t usually worth considering unless you are dead-set on having all your assets related to personal finance in one place.
It’s best to go with a brokerage that offers options, crypto, and ETFs because you can choose between thousands of investments instead of tens.
For instance, you can buy and sell put and call options on hundreds of popular stocks with an options account.
You can also trade cryptocurrencies, including Bitcoin, Ethereum, Litecoin, Ripple, and more.
If you are a beginner investor, it’s best to go with a brokerage that offers easy-to-use tools.
These include streamlined charts and data points, simple explanations of investing terms, comprehensive educational resources, online chat, customer support, etc.
By choosing a brokerage with great features for beginners, you’ll get the essential tools to grow your portfolio successfully.
If you want to trade cryptocurrencies, consider a brokerage that provides a transparent and straightforward way of buying them through an in-app wallet or outside exchange.
A cryptocurrency trading platform should also provide a straightforward process for depositing, withdrawing, and exchanging crypto assets.
Some brokerages have strict limits on buying cryptocurrency with fiat currency.
Brokerage services need to provide a flexible system for buying and selling cryptocurrencies, including debit cards with automated crypto purchase features.
If you are looking for financial advice, it’s best to go with a brokerage that offers such advice as part of the whole package.
Some brokerages offer no-cost consultations on your investments and portfolios.
These can include free, unlimited personalized consultations from an online investment and financial advisor.
Others provide advanced tools like multilingual customer service teams, sophisticated portfolio management services, etc.
Some online brokers also use AI to improve user experience and provide easy-to-understand investment advice.
If you want to do more than buy or sell stocks, you’ll need a brokerage with advanced stock analysis features.
These features include research tools and reports on individual companies and industries, detailed data on publicly traded stock, etc.
Some brokerages offer powerful charting software, a live market news feed, and interactive tools to create your charts and screeners.
They also provide in-depth stock analysis, including ratings of key financial metrics, performance reports on specific stocks or sectors, and advanced fundamental data for investors.
These tools will help you analyze the data correctly and act on it.
When you open a brokerage account, ensure your deposit is safe and secure by using verified payment methods.
These include debit/credit cards, ACH transfers, bank wires, etc.
If you are looking for an investment and trading app with the most straightforward process for making deposits and withdrawals, choose one that accepts debit or credit cards.
This will make life easier for you because you can make payments with your bank or credit card account.
It’s a good idea to choose a brokerage app that charges the lowest fees while trading.
Some brokerages will have a zero commissions policy and waive their fees if you sign up with an active bank account or credit card, invest at least $5K in your account, or any other type of condition.
Trading account fees will depend on the number of commission-free trades you’ve made in a month, your account balance levels, and/or trading activity.
Some brokerages will also waive fees if your monthly trading volume is high enough.
This might be the case if, for example, you complete over one million “commission-free” transactions or $1 million worth of trades in a month.
If you end up having to pay regulatory fees, make sure you understand which types of fees apply to your account.
Some brokerages offer the option of trading commission-free but will charge other types of regulatory fees like withdrawal or inactivity fees.
Speaking of regulatory fees, make sure a top-tier regulator is on top of your brokerage.
The financial industry regulatory authority (FINRA) was established in 2007 to protect investors by regulating member brokerage firms.
It also examines the activities of stockbrokers to determine whether they are acting correctly and lawfully.
Choose a brokerage app with advanced features if you’d like to trade on margin or use other complex trading tools.
It’s good to know that not all brokerages offer the option of margin trading.
If you want to borrow money from your brokerage account to purchase more stock than you can afford, this is one way to do it.
A margin account will let you borrow from your broker to purchase more “marginal” securities.
This is a riskier investment activity, but it can get you higher returns if the stock becomes more valuable over time.
Margin rates are usually pretty high, but you should ensure they are lower than what you’d pay to borrow money from your local bank.
Speaking of various types of trading, paper trading is a great way to practice trading without using real money or taking any risks.
Paper trading allows you to make trades on a set of virtual stocks and track your performance without risking your own money.
Some brokerages might have inbuilt functionality to practice this type of trading, which is useful when starting.
Advanced traders may want a brokerage app that offers advanced trading tools.
If you’re a more advanced user, check if a brokerage offers real-time market data or pre-market and after-hours trades.
These can be very useful for users who want to make decisions based on the latest stock trends.
These features could also include live streaming quotes, portfolio strategies, advanced charting tools, etc.
Even as an expert trader, make sure your brokerage app offers some essential charting tools.
Getting the correct dividend information is essential if you’d like to know the dividends a company has paid out over time.
You may want to invest in companies that pay high rewards if you’re looking for safe, long-term returns on your investments.
A quick disclaimer to keep in mind – you should not trade based on the dividend information alone.
Dividends are only paid out to shareholders of record, which means you’ll need to purchase shares before the ex-dividend date (usually one business day before the actual dividend payment date).
Having access to this information might help your decision on which stock to invest in.
Some brokerages will also let you link your bank account or credit card to make it easier for users to fund their trading accounts and cash out their profits.
This is an excellent option to get started as you’ll be able to fund your trading account directly from an income source you’re used to using.
The importance of a sound cash management account depends on your investment style.
For those who plan to hold stocks for the long term, interest from a money market fund is likely unnecessary.
But it could be pretty beneficial for active traders who trade frequently and need access to their cash as soon as possible.
The bottom line when it comes to Webull vs. Robinhood: both of them offer various features that can help you when trading, but at the same time, neither is a one-stop-shop.
That is why you should do your research and understand what factors are essential to you, along with the pros and cons that both platforms offer.
It is also advised that you read reviews online to ensure that what is offered by these brokers suits your requirements.
Have you used Webull or Robinhood before? What were your thoughts on the apps? Let me know in the comments below.
Further reading on AdamEnfroy.com: Want to learn more about options for retirement? Here’s a post about gold IRA companies and precious metals IRA companies to help you obtain the right knowledge about this topic.
In addition, check out my post on peer-to-peer lending sites if you’d like to learn more about this type of lending available today.