Compare Robinhood versus Interactive Brokers (IBKR) in 2022: IRA, commissions, investing fees, trading tools, account differences, pros and cons. Which online broker is better in 2022?

Robinhood vs. Interactive Brokers Introduction

Interactive Brokers and Robinhood are very popular brokerage firms that have done a lot in recent years to change the way people trade and invest. Before opening an account with either firm, be sure to take a look at our research.

Comparison Table

Robinhood Review Interactive Brokers Review
Rating 3-star brokerage firm rating Interactive Brokers rating
Stocks $0 $0
Options (per contract) $0 $0.65
Mutual Funds N/A $14.95
Initial Funding Requirement $0 $0
Inactivity Fee $0 $0
IRA Annual Fee $0 $0
Full Account Transfer $75 $0
Partial Account Transfer $75 $0
Account Closing Fee $0 $0
Trading Experience & Technology brokerage ratings brokerage ratings
Mobile brokerage ratings brokerage ratings
Research Amenities brokerage ratings brokerage ratings
Portfolio & Analysis Reports brokerage ratings brokerage ratings
Customer Service and Education brokerage ratings brokerage ratings
Open an account Open an account and get up to $200 in free stock. Get up to $1,000 in IBKR stock with this referral link!


First, Let’s Have a Look at Account Types and Tradable Assets

Robinhood customers can buy and sell the following investment vehicles:

  • Cryptocurrencies
  • Options
  • Stocks
  • Exchange-traded funds
  • American Depository Receipts

Interactive Brokers offers everything on this list but goes a giant leap further by adding these assets:

  • Foreign securities
  • Warrants
  • Futures
  • Options on futures
  • Structured products
  • Forex
  • Precious metals
  • Mutual funds
  • Closed-end funds

Interactive Brokers also has many more account types than Robinhood. Besides the individual taxable account, which is the only choice at Robinhood, Interactive Brokers delivers tax-deferred accounts, joint accounts, trusts, custodial accounts, and more.

Winner: Interactive Brokers


Up Next Is Website Technology

Robinhood’s website is rather simple. Every asset profile automatically includes a trade ticket that sits in the upper-right portion. Available order types include stop loss and recurring. This last one is pretty unique in the brokerage world.


Robin Hood versus Interactive Brokers


A chart on Robinhood’s site can be expanded full-screen (look for the Advanced icon in the upper-right corner of the graph). There are two plot styles (candlestick and line) and zero drawing tools. We found six technical indicators, which is a small number.

Robinhood’s website does have watchlists. Any number can be created, and it’s really easy to edit a list. Unfortunately, alerts cannot be established for securities or cryptocurrencies.

On Interactive Brokers’ website, it is possible to establish alerts for assets. The site also has infinite watchlists, and these are really easy to use. Interactive Brokers leapfrogs over its rival here with an Artificial Intelligence. Named iBot, it sits in the bottom-right corner. It does a fair, albeit not fantastic, job of answering questions.


IB Education


The trade ticket on the Interactive Brokers site has several order types, and there are toggle switches to turn on bracket orders. Charting is on a much higher level than what we saw on Robinhood. IB’s charts have tons of technical studies, several drawing tools, and lots of graph styles.

Winner: Interactive Brokers


Third, It Is Other Software

Website trading is just the beginning with these two. Both of them have mobile apps with charting and tools. On Robinhood’s app, the charting software has recently been updated to include technical studies (just 6, though). The major downside is that a graph cannot be displayed horizontally.


Robinhood vs Interactive Brokers


On IB’s mobile app, a chart can be displayed horizontally by rotating the mobile device. There are over 50 indicators. The order ticket is also more advanced than Robinhood’s with several pro-level order trade types, such as market on close and limit if touched. And we like the check deposit tool on the IB app, something that is missing on Robinhood’s app.


Interactive Brokers vs Robinhood


Then there is desktop trading. Interactive Brokers has Trader Workstation, which, as the name implies, delivers lots of powerful trading tools. These include direct access to global exchanges, a risk navigator, an ETF replicator, and forex dealing boxes. Bloomberg TV streams free of charge, too.


Robinhood vs IBKR


Robinhood does not have a desktop platform.

Winner: Interactive Brokers


Now, Let’s Examine Options Trading

One of the great features on Trader Workstation is the options section. It will be found under the “New Window” tab, which is located in the top-left corner of the screen. Of course there are chains for calls and puts, but there’s much more. The strategy builder tool delivers chains for several pre-installed strategies. These include iron condors and butterflies.

Then there is the probability lab. This tool will estimate the odds of the underlying instrument reaching a certain price by a certain time. This analysis is helpful in judging derivative prices.

Other option tools on Trader Workstation include a volatility skew, a rollover widget, and an option activity lab.

Although Robinhood offers trading in options, neither the broker’s website nor its mobile app has integrated strategies. However, it is possible to add multiple legs to an order to create custom trades. Like Interactive Brokers, Robinhood does have profit-loss diagrams, but there’s not much more.

Winner: Interactive Brokers


Fifth, We Need to Inspect Margin

Robinhood offers two types of margin trading: a traditional percent-based system and a monthly subscription called Gold. This latter program costs $5 per month and includes the first $1,000 of borrowed funds at no cost. It also includes some extra perks like Morningstar research that’s not available to regular customers. Margin loans above $1,000 cost 5%.

Robinhood customers who don’t want to pay the monthly fee can still trade on margin. The cost is 9% for any amount borrowed.

Interactive Brokers has lower rates with no monthly fee at all. Customers who subscribe to the company’s Lite pricing plan pay just 4.83%. Pro clients get even lower rates.

Interactive Brokers, but not Robinhood, displays margin details for an entered ticker symbol on its software.

Winner: Interactive Brokers


The Sixth Category Is Day Trading

Level II Quotes: Robinhood offers Level II data in the Gold subscription. Interactive Brokers customers can get the quotes by adding a data package.

Shorting: Only possible inside an Interactive Brokers account.

Routing Fees and Rebates: Once again, only possible at Interactive Brokers.

Extended Hours: Robinhood and IBKR Lite customers can trade from 7 am until 8 pm. IBKR Pro clients can start at 4 am.

Direct-access Routing: Possible only on Trader Workstation.

Winner: Interactive Brokers


Extra Services

Individual Retirement Accounts: As already mentioned, only taxable accounts are available at Robinhood. Interactive Brokers has Roth, Traditional, SEP, and Inherited accounts.

Initial Public Offerings: Only available with a Robinhood account.

Fractional-Share Trading: Trades of stocks and ETFs can be entered in whole dollars at both firms.

DRIP Service: Both firms offer dividend reinvesting for stocks. Only Robinhood provides the service for exchange-traded funds.

Banking Tools: A Mastercard debit card is available to Interactive Brokers clients. It doesn’t have any notable perks, however. Robinhood, by comparison, has a Visa debit card with lots of add-ons, like weekly bonuses and round-ups.

Recurring Purchases of Mutual Funds: Not available at either firm.

Winner: Robinhood


Promotions

Interactive Brokers: Get up to $1,000 in IBKR stock with this referral link!

Robinhood: Open an account and get up to $200 in free stock.



Our Recommendations

Beginners: Interactive Brokers is intended for professional-level traders, so it’s not a user-friendly experience. Robinhood does a better job with simple trading tools. Nevertheless, only Interactive Brokers offers simulated trading on its mobile app and desktop software.

Mutual Fund Trading: Interactive Brokers is the only choice here. To find funds, click on the Research tab in the top menu on the website and open the mutual fund screener.

Small Accounts: Neither firm has any ongoing fees or account minimums. Margin traders should stick with Interactive Brokers or opt for 9% margin pricing at Robinhood (to avoid Gold’s flat monthly fee).

Long-Term Investors & Retirement Savers: As the only brokerage firm in this contest with Individual Retirement Accounts, custodial accounts, and target-date mutual funds, Interactive Brokers easily gets the endorsement.

Stock & ETF Trading: We pick Interactive Brokers due to its very good mobile app and desktop program.


Robinhood vs IBKR Final Judgment

Although Robinhood popularized $0 commissions, it doesn’t do a very good job of keeping up with the competition. Interactive Brokers clearly delivers the better overall performance here.

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