Scottrade versus Robinhood - compare IRA, commissions, investing fees, trading tools, account differences, pros and cons. Which brokerage firm is better?

UPDATE: Scottrade has been fully merged into TD Ameritrade and discontinued. See TD Ameritrade vs Robinhood.

Robinhood Gold Account Features

Robinhood is one of the most popular app-based low-cost brokers, especially among millennials, largely due to their $0 commissions. Trading is entirely free for basic Robinhood accounts; however you may be aware of their premium membership called Robinhood Gold. This premium account, which costs a flat $5 per month, has all the same features as a standard account plus some extra perks. This article will walk through all the benefits and costs associated with Robinhood Gold and offer a comparison to Firstrade.

What is Robinhood Gold?

Robinhood Gold makes sense for more active traders because it is a margin-enabled account that gives you access to additional capital, instant access to deposits, more stock research, and extended hours trading. All Gold members pay a flat $5 monthly fee for these premium features, plus an interest charge on any borrowed funds. Next, we’ll go over each of these Gold perks.

Margin Access

Up until recently, Robinhood had different tiers of Gold membership, each with a different subscription fee and margin limit. They’ve recently simplified the structure so that all Gold members now pay $5/month and get $1,000 of extra buying power free of any interest charges. Any amount that you borrow above this $1,000 incurs an interest charge at an annual rate of 5%.

Instant Access to Deposits

This Gold feature is very helpful and has been around since the beginning. In general, most brokers will make you wait the full three days for your deposit to settle before you can trade with it, however with Gold you will have instant access to your deposits as soon as they appear in the account.

Robinhood Stock Research Reports

A newer feature of Gold accounts is access to more than 1,700 stock research reports from Morningstar. These reports include key company information and are updated often with company events.

Robinhood Extended Hours Trading

The U.S. markets are open from 9:30 to 5 Monday through Friday, however some brokers offer access to what’s called extended hours trading, which lets you place trades for a few additional hours each day. Robinhood Gold includes this feature, and lets you trade from 9:00 AM to 6:00 PM. This is helpful to traders who need to move quickly when news hits the markets outside of its standard hours.

Robinhood Level II Quotes

A new Robinhood Gold account feature, is access to real-time level II quotes. Level I quotes show you the best bid/ask in the market but level II quotes show you all of the market makers that are lined up on either the bid or ask so that you can see the depth of the market and what kind of orders are lined up. This can be really helpful information for day traders.

Comparison to Firstrade

When comparing Robinhood Gold to Firstrade, we must consider that both brokers offer margin accounts and Robinhood charges a flat $5 monthly fee at minimum for margin access but Firstrade doesn’t have this flat fee. On the other hand, Firstrade’s margin rates (ranging from 5.5% to 9.75%) for when you do borrow money are notably higher than Robinhood’s flat 5% interest charge.

When looking at data offerings, we like that Robinhood Gold will soon include free level II quotes. Firstrade doesn’t currently offer these.

On these two features, Robinhood Gold appears to be the better platform, and the more cost-effective one for those borrowing larger amounts.

There are some areas where Firstrade has an advantage, such as with research tools and investment offerings. Firstrade’s website includes helpful stock, ETF, and mutual fund screeners to help you find the right investments for your portfolio. Firstrade also offers trading in some investment types that Robinhood doesn’t support, such as mutual funds and fixed income.

Both Robinhood Gold and Firstrade offer after hours trading, although at Firstrade the extra hours are longer: from 4:00 PM to 8:00 PM.


Robinhood Gold Account Summary

In conclusion, we think Robinhood Gold is a must-have for active traders and despite the monthly fee it’s relatively cost-effective when compared to the higher margin rates of other brokers like Firstrade. That said, there are some investors that would prefer Firstrade’s platform due to its greater selection of investments (mostly mutual funds).

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