Investing in financial instruments like cryptocurrencies, stocks, and ETFs is a great way to make money. However, investing and trading can seem complicated, especially for beginners.

Fear not, though, because plenty of relatively easy-to-use online trading and brokerage platforms exist. 

eToro and Robinhood are two of the most popular investing and brokerage platforms. They offer crypto trading options and user-friendly interfaces. Below, we will explore each platform’s pros, cons, and unique features. 

Features of eToro 

Established in 2007, eToro is a multi-asset platform for social trading that offers over 5000 different financial instruments in which users can invest. It provides top-notch financial and copy-trading services.

Here are the standard features of eToro: 

Diverse investment options 

eToro offers plenty of investment options for international customers, including 4953 stocks, 670 ETFs, 100 cryptocurrencies, 55 currencies, 35 commodities, and 21 indices. Compared to the global version, US eToro lacks many trading options, such as futures contracts and mutual funds. 

However, only 21 cryptocurrencies, ETFs, stocks, options trading, and crypto copy trading are available in the US market. In addition, margin trading options are not available to US customers. 

Smart portfolios 

One unique feature of eToro is ready-made investment portfolios. These are also called smart portfolios, which are long-term investment portfolios created by professional investment analysts at eToro. eToro offers 65 unique Smart Portfolios with different market themes, trends, and industries, such as cloud, 5G, and more. 

Copytrader 

eToro offers a unique feature called CopyTrader, which allows you to copy the trades of professional and experienced investors easily. eToro shows detailed information, such as success/fail ratio, trading risk score, profits, and more, transparently. However, you must invest a minimum of $200 to use the CopyTrader function.

Free insurance 

eToro offers free insurance for customers of Diamond, Platinum, and Platinum+ clubs. This insurance covers securities, CFD positions, and cash. 

Order types 

eToro offers four different order types: 2 for opening and 2 for closing a trade. The available order types of eToro include: 

• Market order 
• Out-of-hours order (sub-type) 
• Limit order 
• Stop loss order 
• Take profit order 

Crypto wallet 

eToro offers a built-in crypto wallet that is relatively safe and easy to use. You can transfer cryptocurrencies from your eToro investment account to your eToro money crypto wallet. In addition, you can safely store multiple crypto assets in the wallet.  

Also read: Coinbase vs Binance: A Comparison Guide

Features of Robinhood 

Vlad Tenev and Baiju Bhatt established Robinhood in 2013 to provide a user-friendly investment platform for beginners. With no-minimum trading and no-fee options, Robinhood quickly grew in popularity and has become a widely used trading platform.

The primary features of Robinhood include: 

Commission-free trading 

One of Robinhood’s best features is commission-free trading. You can invest in stocks, cryptocurrencies, ETFs, and other assets without paying extra fees. There are no base fees, pre-contract commissions, or assignment fees. 

Robinhood Gold 

Robinhood Gold is a premium service with powerful features, data, and tools. You need to pay a monthly subscription fee to access them, which will improve your overall trading experience. However, Robinhood Gold comes with a 1-month free trial. Here are some of the perks of Robinhood Gold: 

• Instant large deposits 
• No interest on the initial $1,000 of margin borrowed 
• Get 5% interest on uninvested brokerage cash 
• Receive a 3% IRA match on the qualified IRA contributions 

Margin and cash accounts 

Robinhood offers cash and margin trading accounts so that users can choose as per their preferences. In addition, you can switch between cash and switch accounts and vice versa. Cash accounts offer unlimited day trades. 

On the other hand, margin accounts give access to level 3 options trading and margin investing and allow you to trade using unsettled funds. 

Fractional shares 

Another incredible feature of Robinhood is fractional shares, where you can trade a small increment of equity in real time without commissions. This platform allows you to purchase fractional shares of ETFs and stocks worth $1. 

Retirement investments 

Robinhood offers retirement accounts. You can open IRAs and trade stocks and ETFs. One limitation is that you can not buy and sell crypto assets with a Robinhood IRA. 

eToro vs Robinhood: Pros and Cons 

To determine which platform is best, it is essential to understand the advantages and disadvantages of eToro and Robinhood. Let’s have a brief look at the primary pros and cons of each platform: 

✅ Robinhood Pros

Robinhood provides several advantages for investors, making it a popular choice for many. One key benefit is that Robinhood does not charge withdrawal or account inactivity fees, allowing users to manage their accounts without worrying about additional costs. 

Additionally, no minimum deposit amount is required to start investing, which lowers the barrier to entry for new investors. The platform also offers retirement investment options, enabling users to plan for their future easily.

Another significant advantage is the mobile-friendly interface, which makes it convenient for users to trade. Users can also benefit from earning a high-interest percentage on their uninvested cash. 

With no commissions on stocks, options, or ETFs, Robinhood ensures cost-effective trading. The platform supports over 20 different crypto assets, offering a wide range of investment opportunities. Robinhood also provides plenty of customer support options, ensuring users can get help when needed. 

❌ Robinhood Cons

However, Robinhood has its drawbacks. The platform is only available in the USA, limiting its accessibility to international users. It does not offer bonds and mutual funds, which may disadvantage investors looking for these options. 

The number of offerings is also limited compared to other platforms. The lack of a live chat option can make it challenging to get immediate support. 

Robinhood has been criticized for its lack of transparency, especially regarding restricting users from trading and providing misleading information. Additionally, a 1% fee on crypto trades can add up for frequent traders.

✅ eToro Pros

eToro also offers numerous benefits that make it an attractive option for investors. Like Robinhood, eToro does not charge any withdrawal or account inactivity fees, making it cost-effective for users. 

No minimum deposit amount is required, allowing users to start investing with any amount they are comfortable with. eToro supports 16 languages, making it accessible to a broader range of users. 

The platform offers a demo account option, which allows new investors to practice trading without risking real money. 

Smart portfolios and copy trading features are available, enabling users to follow and replicate the strategies of successful traders. eToro also provides 24/5 stock trading options, offering flexibility for users who want to trade outside regular market hours.

❌ eToro Cons

On the downside, eToro charges inactivity and withdrawal fees, which can concern some users. The platform has high minimum deposit and trading amounts, which may not be suitable for all investors. 

eToro is only available in 47 states in the US, limiting its accessibility. Additionally, the platform does not offer advanced trading options, which may be a drawback for experienced traders looking for more sophisticated tools.

Also read: eToro vs Trading 212: Which One Should You Use?

eToro vs Robinhood: Pricing 

In this section, we will compare the pricing of eToro and Robinhood, which play a vital role in determining which platform is best for trading. 

eToro

eToro does not charge commissions on ETFs, stocks, and options trading. For every crypto trade, you will be charged a 1% fee. 

In addition, there is a $5 fee on every withdrawal. If you haven’t logged in to your account for 12 months, you must pay $10 inactivity fees. 

Although deposit fees are not charged, the minimum deposit is $200, and the minimum trading amount is $25. 

Rollover fees will vary depending on international market conditions. Also, eToro charges overnight fees for open CFD positions. 

Robinhood 

The best thing about Robinhood is commission-free trades. Whether you invest in cryptocurrencies, ETFs, stocks, or options, there are no commissions or fees. You do not have to pay fees for domestic or international wire transactions. 

In addition to that, Robinhood does not charge fees for opening, maintenance, and inactive accounts. 

However, Robinhood charges $100 on account transfers. You will need to pay $20 for domestic overnight mail, and the fee for international overnight mail is $50. 

While the cost for monthly paper statements is $2, you do not have to pay any fees for electronic statements.  

eToro vs Robinhood: Which Platform is Better? 

eToro and Robinhood are popular online trading platforms with different features and shortcomings. Let’s determine which platform is best in terms of other aspects, making it easy for users to choose. 

Investment offering 

Both Robinhood and eToro have limited financial asset options. However, eToro’s investment offerings are relatively better than those of Robinhood. 

Minimum deposit 

The minimum deposit for eToro is $50, while there is no minimum deposit for Robinhood. 

Mobile trade experience 

Robinhood is a better mobile-friendly trading platform than eToro, with a simple and user-friendly interface. 

Desktop trade experience 

Both platforms have simple websites, but eToro offers more features, improving the desktop trade experience.  

Commissions & fees 

Both platforms offer no-commission trading on ETFs, stocks, and options. However, eToro has extra fees compared to Robinhood, including withdrawal fees, inactivity fees, etc. 

Safety

Both Robinhood and eToro have email confirmation and rigorous verification processes. However, eToro offers SSL encryption for every user, and money is stored in tier 1 banks. 

Transparency 

eToro is more transparent than Robinhood in terms of trading. Recently, there have been some issues regarding Robinhood’s trading transparency. 

Multilingual 

eToro supports English, Italian, Spanish, French, and German. Robinhood is available in 16 different languages. 

Community 

eToro is more well-known and has a larger community than Robinhood, with 30 million users from 100+ countries. 

How an Investment LLC Can Protect Your Assets

Running an investment business is inherently risky. Therefore, securing your portfolio by establishing an investment LLC is important.

doola offers you the perfect opportunity to set up your U.S. LLC with a click of a few buttons. Setting up your LLC will also benefit you in taxes.

With the doola Total Compliance package, you will have the best CPAs available during the tax season. 

Sign up for a free consultation today to witness your investment business take off.

FAQs

What are the key differences between eToro and Robinhood?

eToro offers a wider range of investment options, including stocks, ETFs, cryptocurrencies, currencies, commodities, and indices, whereas Robinhood focuses primarily on stocks, ETFs, and cryptocurrencies.

Additionally, eToro has features like CopyTrader and Smart Portfolios, which are unavailable on Robinhood.

Are there any fees associated with eToro and Robinhood?

eToro charges a 1% fee on crypto trades, a $5 withdrawal fee, and a $10 inactivity fee if you haven’t logged in for 12 months.

Robinhood, on the other hand, offers commission-free trades on stocks, options, and ETFs but charges $100 for account transfers and fees for overnight mail.

Which platform is better for beginners?

Both eToro and Robinhood are beginner-friendly, but Robinhood’s simple and intuitive interface may be easier for new investors to navigate.

eToro’s demo account feature also allows beginners to practice trading without risking real money.

Can I trade cryptocurrencies on both eToro and Robinhood?

Yes, both platforms support cryptocurrency trading. eToro offers over 100 cryptocurrencies, while Robinhood supports over 20 different crypto assets.

Is it safe to invest with eToro and Robinhood?

Both platforms have robust security measures in place. eToro offers SSL encryption and stores money in tier-1 banks. Robinhood has rigorous verification processes and email confirmation.

However, staying informed about platform-specific issues, such as recent concerns about Robinhood’s trading transparency, is important.