Compare Vanguard versus Robinhood: IRA, commissions, investing fees, trading tools, account differences, pros and cons. Which online broker is better in 2020?

Overview of Robinhood and Vanguard

Robinhood and Vanguard are very different brokerage firms. Despite their many distinctions, they do have one thing in common: they attempt to provide a great value for their clients. Let’s see who does the better job of that.

Broker Cost

Broker Fees Stock/ETF
Mutual Fund
Annual IRA
Vanguard $0 $20 $1.00 per contract $20* $20*
Robinhood $0 na $0 $0 $0
Ally Invest $0 $9.95 $0.50 per contract $0 $0


Broker Review Cost Investment Products Trading Tools Customer Service Research Overall Rating
Ally Invest

Who Has the Larger Range of Investments?

Traders at Robinhood get to buy and sell equities, exchange-traded funds, American Depository Receipts, closed-end funds, options, and seven cryptocurrencies. The brokerage firm does not provide trading in most over-the-counter securities and most foreign stocks. Some stocks on Canadian and Israeli exchanges are available. Penny stocks that trade on the major U.S. exchanges are available as well.

Vanguard customers have access to bonds and mutual funds, which are absent at Robinhood. Also on tap are stocks (including both penny and OTC stocks), options, ADR’s, ETF’s, and closed-end funds. Missing in action is digital currency trading. Some foreign exchanges are available with the assistance of a representative.

Overall, we think Vanguard does the better job here.

Who Has the Better Trading Software?

Trading on a desktop or laptop at Robinhood entails using its browser platform. There is no desktop program launched independently of the website. The browser system offers a simple trade ticket that delivers stop, market, and limit orders. An extended-hours check box can be selected. There are no advanced order types.

Robin Hood vs Vanguard

As for charting, there is a small graph on a stock’s profile. This can be expanded to fill the width of the monitor. In the second mode, there are 2 display choices and a handful of technical indicators. There are no drawing tools, company events, or comparisons.

Robinhood’s site has a watchlist that can be modified. An entered ticker symbol displays margin requirements, a handy service for traders who need to use margin.

Moving to Vanguard, we have a similar situation. There is no trade bar or desktop platform. The website is it, and it’s pretty basic. Charting doesn’t provide a full-screen mode, but there are comparisons, four graph styles, and company events. A few technical indicators are also incorporated.

Vanguard versus Robin Hood

Vanguard’s order form is pretty similar to Robinhood’s with the exception that GTC orders are valid for only 2 months. Another feature we like better at Robinhood is the inclusion of margin requirements for each ticker symbol. This feature is missing on Vanguard’s site.

The primary strength that Vanguard has in this category is e-mail alerts for stock and market events. Phone alerts are not available, however.

Overall, it’s pretty even in this category.

Who Has the Better Mobile App?

Mobile traders at Vanguard can use an Apple, Android, or Kindle device. During our testing, we discovered that Vanguard mutual funds can be traded, but not funds from other fund families. Strangely, there is no charting (other than for indexes).

The order form has limit, market, and stop orders plus 2 duration choices. This is the same setup as we saw on the website. Touch ID is enabled for Apple devices. Mobile check deposit and a basic level of security research are available.

Moving to Robinhood, we do get (very simple) charting for stocks and ETF’s. When we say simple, we’re talking no horizontal mode, comparisons, company events, or technical studies. There’s not even a price axis.

The mobile order ticket offers the same choices as the website. Very limited security research is available. A PIN has to be used to login to Robinhood’s app, and there is no Touch ID.

Mobile check deposit gives Vanguard the victory here

Who Is Better for Education and Research?

Vanguard customers get a website with several articles and some videos on a wide range of financial topics. During our investigation, we found materials on fixed-income basics, how to trade options, alternative investments, and growth stocks.

Equity profiles at Vanguard have a moderate amount of information on them. Analyst ratings are shown from many sources; these are ratings, not reports. For Facebook, we counted 34.

Vanguard also provides financial statements, earnings data, price ratios, news articles, and more. Analyst reports are available from Argus and MarketGrader in pdf format at zero cost.

Moving to Robinhood, stock profiles have less information on them. There is a user-friendly chart on earnings history for each stock. News articles are linked, but there are no financial statements or price metrics. There are analyst ratings, but no reports.

As for financial education, Robinhood does have a help section on its site that offers basic answers to newbie questions, such as what is an option premium. While these resources are rather brief, they are more than we expected from a $0 broker.

Vanguard is the outperformer here.

And What About Funds?

Because Vanguard offers mutual funds, and Robinhood doesn’t, Vanguard is the obvious pick. ETF’s are a different story. Both brokers offer the vast majority of them commission-free (there are a few at Vanguard that will be charged commissions). So we have to look at ETF resources. Robinhood doesn’t have a screener, but Vanguard does. Vanguard’s ETF profile pages also have more information.

Vanguard wins this one.

Other Services

Vanguard customers can open taxable accounts or IRA’s. Robinhood doesn’t currently provide retirement accounts. Vanguard offers automatic investments in mutual funds. DRIP service is available at Vanguard, but not Robinhood.

For cash management, Vanguard offers checkwriting and a debit card, which Robinhood fails to deliver (as of now).

Vanguard is the clear winner here.

Our Recommendations

If you’re a beginning investor, we suggest Vanguard. Its customer service and learning materials are better than Robinhood’s.

For options, we will go with Robinhood for its commissions. While both companies offer derivative trading, they only offer chains with puts and calls. Neither broker has advanced option tools.

For retirement accounts, Vanguard is the obvious choice. We also like Vanguard better for long-term investing, given its selection of mutual funds.

For stock trading, Vanguard has better information; but Robinhood has the better commission schedule.

Robinhood vs Vanguard Judgment

The unmistakable winner of this contest is Vanguard. Nevertheless, Robinhood is the better value, especially for traders with less than $500,000 to invest in Vanguard funds.


Continue Reading