Vanguard vs Robinhood: Independent Comparison




These two firms could not be more different regarding investment strategies. A genuinely active investor could be better off with neither. Both offer to help savers build a nest egg for the future. However, their strategies for conducting business online are distinctive.

Robinhood is also one of the most powerful platforms for newbies (re: Millennials) who wish to use their phones to monitor trades and take advantage of $0 commission costs for stocks, options, ETFs, and cryptocurrencies. 

The Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) are among the primary financial agencies that regulate these brokers (FINRA). And they both come within the U.S. investor protection mechanism that SIPC provides. The maximum amount that may be protected by SIPC is $500,000, of which the cash portion is limited to $250,000.

Robinhood is better for day traders or investors who purchase and sell stocks hoping to profit from little price changes. There are no fees to pay, and the charting and stock screening tools are pretty elementary, making this platform ideal for newcomers. The lack of sophisticated research and analytical tools puts off day traders. New traders and those comfortable with research tools from companies like MetaStock and NinjaTrader will find its services helpful.

Buy-and-hold investors are the target market for Vanguard. The platform is owned by investors and offers a substantial variety of in-house mutual funds and ETFs. Investors who have at least $50,000 available to invest are eligible to speak with a trained financial advisor by email, phone, or video chat.


Vanguard Overview

Vanguard, the mutual fund giant founded by John Bogle in 1975, is wholly owned by its investors. This company’s claim to fame is one of the world’s largest investment firms.

Vanguard continues to this day to operate under its original client-first business philosophy. Vanguard is not owned by stockholders, as stated on the homepage of their website. Investors in our funds are the legal owners.

Over $7.2 trillion will be in Vanguard’s worldwide AUM (assets under management) as of January 31, 2021. Even more striking is that Vanguard has clients in more than 170 countries and serves approximately 30 million investors.


When it comes to staff, Vanguard employs 17,300 people. This is a worldwide figure, including those in the United States. Mortimer J. Buckley now serves as chair and chief executive officer of Vanguard.

Vanguard, in a nutshell, is an investment firm that has been operational for over half a century. This is a major investment firm with a significant international footprint. Their massive scale and established history indicate they have what it takes to succeed as an investing firm.

Robinhood Overview

Robinhood which offers a commission-free trading app, competes with established brokerages. More than $30 billion in transactions have been made using the app since its release in December 2014, a significant increase from the $2 billion made through the app in 2015.

Experts in the field are skeptical that the free-trades business model will succeed, despite the app’s publicity and meteoric rise in popularity. Robinhood’s primary source of revenue is interest earned on client cash deposits.


No initial investment is required to open a Robinhood account, and no commissions are charged on trades of U.S.-listed stocks and ETFs. The Palo Alto, California-based firm adopts a bare-bones operation approach to save money. There are no visible office spaces. Not included in its services are research reports, analytic instruments, stock screening devices, or the ability to trade options.

Mr. Tenev and Baiju Prafulkumar Bhatt, both Stanford alums interested in mathematics and physics, produced the idea for Robinhood. They established the high-frequency trading software companies Celeris and Chronos Research in New York in 2009. Their clients included hedge funds and banks. 

Features & Services
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Vanguard vs. Robinhood Service & Feature Comparison


Vanguard mutual funds, exchange-traded funds, and stocks can all be traded online without transaction fees. Vanguard’s $1 charges on options contracts are significantly higher than the average we observe among rivals. But Vanguard’s mutual fund commissions are cheaper than we generally see with other brokers — and no-load funds are available to Vanguard consumers. A $20 annual fee is charged to accounts with a balance of less than $10,000 at Vanguard. The options contract and mutual fund fees are waived for accounts with more than $1 million invested in Vanguard funds.

There has been a big competition for every significant broker since Robinhood launched $0 fees for stocks and ETFs in 2013. Robinhood is advancing today by continuing to provide zero-commission trading of options and cryptocurrency. Customers may enjoy Robinhood’s low-cost broker experience without paying a charge to keep their account open. While most brokers waive the fee for opening a new account, most will charge $75 to move your Robinhood funds.

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Range of Investments

There is not much difference when comparing Vanguard and Robinhood from the perspective of an investor who is simply interested in equities and ETFs. Conversely, Vanguard may be the best option for investors in mutual funds. Investors in options and cryptocurrencies will flock to Robinhood because of the low fees they charge.

Vanguard is consistently regarded as one of the finest mutual fund brokers in the industry. It provides one of the most well-known families of mutual funds. Vanguard now has more than 270 funds available, covering a wide range of investment focuses and approaches. There is no starting balance requirement for a Vanguard account. Even yet, there is often a low entry point for mutual funds. Although most mutual funds have a $50,000 minimum contribution, others accept investments as low as $3,000. Additionally, stocks and ETFs, options, CDs, and bonds are available through Vanguard.

Unlike traditional brokers, Robinhood lets its customers trade fractional shares of stocks and exchange-traded funds. Fractional shares allow investors with smaller budgets to get a piece of the biggest companies. Like Vanguard and many other brokers, Robinhood gives its customers the chance to trade options. In addition to traditional stock trading, Robinhood members may also trade cryptocurrency.

Account Types

Beyond traditional taxable accounts, Vanguard provides a plethora of other investing options. Joint, retirement savings, and custodial accounts are all available to Vanguard clients. Among the retirement accounts available, those from Vanguard include standard IRAs, Roth IRAs, SEP IRAs, and SIMPLE IRAs. Vanguard also provides an automated rebalancing service known as the Digital Advisor. Margin accounts allow customers to invest using borrowed funds.

The Robinhood app has two different account tiers, but you can only get one if you are unwilling to pay more. Robinhood only supports taxable accounts for trading; there are no options for retirement, joint, or custodial accounts for investors. Robinhood Gold, which grants access to features like a margin account, is available for $5 a month.

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Robinhood is an excellent option for traders who simply need a taxed account. Investors who require a custodial, joint account or want to open a new retirement account may appreciate Vanguard’s options. Compared to Robinhood’s two account options, Vanguard’s selection is extensive.

Managed & Retirement Accounts 

The Robinhood platform lacks robust options for analyzing your portfolio. You can still see your accumulated gains and losses, your available funds, your margin details, your dividend history, and your tax reports, among other things.

Your purchasing power and margin are available in real time from Vanguard. You may acquire a comprehensive financial picture by combining your assets from outside the account with the ones in your brokerage’s system, which you can use to file your taxes. The portfolio analysis features offered by Vanguards are superior to those offered by Robinhood.

There is no doubt that Vanguard is the victor here. However, Robinhood does not include retirement planning tools or mutual funds.

Education and Research

The instructional materials on Robinhood are straightforward but do not anticipate in-depth analyses. The posts are not categorized, so it may take some time to discover that for which you are searching. While there are no videos or seminars, the 15-minute podcast and daily Robinhood Snacks email make up for it.

Vanguard’s educational materials are designed to help you establish and pursue your own personal financial objectives. There are primarily articles rather than other types of information. You may still discover articles, research papers, films, and webcasts on financial planning, the economy, retirement, and investment products. Vanguard is just as bare-bones as Robinhood regarding education. Still, it has more tools for long-term investment and retirement savings. The Options Tool is restricted to examining option chains and does not include a stock or ETF screening feature. You cannot personalize or build up technical studies using standard internet charting.

Vanguard has more options if you are looking for retirement planning and savings calculators. Vanguard provides better-individualized account advisory tools, and you can build up investments for each aim.

Vanguard has more research tools than Robinhood, which compels you to complete most of your research and trade testing outside their app.

Customer Service

When compared to the competition, Vanguard has superior customer service. There is no incoming phone number for Robinhood, so if you need support, you will have to use the app or website. Vanguard’s phone lines are open for customers Monday through Friday. The live chat feature is unavailable. Private messages can be sent through the website.

Other Features

Vanguard provides users with several investment tools, including calculators. They state that every level of investor may benefit from these materials. The lack of sophistication in Vanguard’s charts may be the most prominent criticism that can be leveled at the firm’s suite of analytical tools. There are just 15 technical indications that may be used.

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The news stream on Vanguard is mediocre, too. Their news feed may include essential information, but it is usually buried deep inside walls of text that no one wants to read. They do not include any visuals in their posts.

Robinhood’s research options are comparable to Vanguard’s. However, the accessibility of Robinhood’s research resources puts them ahead of the competition.

Robinhood’s trading tools, such as its “Trading Ideas,” “News Feed,” and “Fundamental Data,” are only adequate. They do what they are supposed to, but they are not impressive.

However, Robinhood’s meager five technical indicators fall short compared to other brokerages’ charting features. Attempts to make the site more user-friendly backfired, dropping them down the charts. As you can see, except for Vanguard’s Professional Research feature, Robinhood’s products are comparable to Vanguard’s.

Trading Technology & Mobile Apps

Robinhood allows for speedy equity trading, focusing on the transmission of market orders. Options trading is also simplified, and you will learn several valuable tactics. The app and website do not provide live data or quotations.

But Vanguard has begrudgingly entered the internet broker industry with a bare-bones product for customers. High-volume stock trading and exchange-traded funds (ETFs) are also available at the brokerage. However, retirement planning and mutual funds remain the primary focus. Vanguard lacks the necessary features for aggressive traders, such as streaming quotations and advanced charting, so they should go elsewhere.

Due to their vast differences, it is hard to conclude whether Robinhood or Vanguard provides a superior trading experience. While Robinhood may be the preferred choice of new and tech-savvy investors, eToro continues to struggle with outages and record-breaking penalties from the Securities and Exchange Commission (SEC). However, Vanguard’s steadiness and reliability will appeal to long-term and seasoned investors.

Compared to other brokerages, Vanguard’s trading platform lacks bells and whistles. But it equips its intended user, the passive investor, with everything they need to succeed. Similar functionality may be found in the well-rated Vanguard app for iOS.

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For a good reason, Robinhood is one of our top picks regarding stock trading applications. The Robinhood app is more straightforward than its rivals but lacks several capabilities. However, rivals have not been able to match the app’s polished design or user-friendliness in trading. The desktop version of Robinhood, while identical to the mobile app in terms of capabilities, lacks the latter’s charm.

Both of these brokers have an incredibly user-friendly UI. However, Vanguard’s platform is developed for passive investors, whereas Robinhood’s platform is meant for active traders. Interested investors can test either one or then settle on their favorite.

Robinhood is a low-cost alternative to traditional brokers, but its limited features leave more desired. You cannot modify anything or trade straight from the chart, and there are no customization choices. Trading stocks requires only filling out a simple trade ticket while placing orders for options is more involved. Moreover, Robinhood has been questioned owing to repeated platform disruptions and transaction limits.

Robinhood’s app offers more excellent customization options than Vanguard’s. The software offers trading across all asset classes, including live streaming quotes and charts. Vanguard restricts the kind of trades that may be made on the go, and mobile quotation updates are 20 minutes delayed until a trade ticket is opened.

When comparing reviews on the App Store, Robinhood has more overall, while Vanguard has a higher average rating. Over 3.7 million users have rated Robinhood at 4.1 stars, whereas over 167,000 users have rated Vanguard at 4.7 stars. We generally preferred Robinhood’s app to Vanguard’s because of its outstanding features and user-friendliness.

My Preference: Vanguard Wins Over Robinhood

Robinhood is a simple app and website without a lot of extra features. Let us say you just started trading and investing and have a low account balance. When first starting out, Robinhood might be an excellent platform to learn the ropes before moving on to a more robust broker. Let us say you are worried about Robinhood’s downtime and the trading limits it imposes. You may find different zero-fee brokers if you want a more stable and consistent trading experience. We have never liked Robinhood’s attempts to make investing more like a game. These parallels shed light on some of the worries we have been hearing.

Buy-and-hold investors will like Vanguard’s simplicity and stability, despite the broker’s lack of sparkle. Investors seeking exposure to a broader range of asset classes, including the finest and lowest-cost options in the industry, will find a better match with Vanguard. We believe that Robinhood may not be the best option for new investors of any age because of the sort of trading behavior it encourages (and the same is true for all other investors).


Is Robinhood Completely Free?

Concisely, Robinhood is a no-cost trading app that allows users to buy and sell stocks, ETFs, options, and digital currencies. To compete, Robinhood was the first brokerage to eliminate trading fees altogether. But you may need to upgrade to Robinhood Gold, which costs $5 monthly.

Does Vanguard or Robinhood Offer Cryptocurrency Trading?

Although Vanguard does not provide cryptocurrencies, foreign exchange trading is available. Robinhood supports Bitcoin, Ether, Bitcoin Cash, Litecoin, Dogecoin, Ethereum Classic, and Bitcoin SV for buying and selling.

Is Vanguard suitable for individual retirement accounts (IRA)?

When deciding where to open an individual retirement account (IRA), Roth IRA (Roth IRA), 401(k), or another long-term investing account, Vanguard is the superior option. On the other hand, Robinhood does not let you invest in any mutual funds through a separate account; all your trades must be made through the same brokerage.

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