Which investing platform should you use, Betterment or Robinhood?
I’ve used Betterment for about 2 years now, and Robinhood for just a couple of months. In this blog, I’m going to compare each app side by side, take you on a tour of my accounts, and finally, provide some guidance on which one to go with.
Now, I started investing with Betterment about 2 years ago, and I absolutely love it. Then when Robinhood came on the scene, I got really curious because the platform was offering stock trading for zero commissions. I’d never seen that before, so I decided to try it out. While both apps are for investing, I’ve found that they actually serve totally different purposes.
ROBOADVISOR VS TRADING PLATFORM
Betterment is a roboadvisor, while Robinhood is a trading platform. What does this mean?
A roboadvisor is x. So Betterment does x.
On the other hand, a trading platform is nothing more than x.
On a trading platform, you need to know exactly what you want to buy or sell and initiate the orders yourself, whereas a roboadvisor executes them for you based on their algorithms.
So if you want to do your investing in Robinhood vs with a roboadvisor like Betterment, then you better know what you want to buy and why it’s a good investment.
ACCOUNT TYPES OFFERED
- Betterment: IRAs, Smart Saver, etc.
- Robinhood: cash and margin, no interest on your cash
I get worried when someone tells me that they don’t have an IRA, they’re not maxing out 401k, but they’re “doing Robinhood”. This tells me they’re leaving a lot of money on the table by not investing in tax-advantaged retirement accounts. Ideally, you have a 401k that you’re maxing out your employer match, an IRA at Betterment, and then a trading account at Robinhood for buying stocks.
- Betterment: portfolios (SHOW THE LIST OF ETFs)
- Robinhood: individual stocks and ETFs and cryptocurrency and options
… no AUTOMATIC investing or dividend reinvestment
… check out my stock investing checklist
TOUR OF MY ACCOUNTS
- Portfolio and the projection graph/calculator
- Auto and recurring deposits
- Charts and news feed (very day-trader ish), show my HSBC desk!
- Buy and sell orders