Robinhood and Webull are two apps used by investors looking to make both short and long term trades. But, with many similarities between the apps, which one is better for making your basic stock trades?
Let’s get into the facts:
- Founded in 2013
- Founders: Vladimir Tenev and Baiju Bhatt
- Tradable assets: stocks, options, ETFs, and positions of cryptocurrency
- Available in the U.S. and Great Britain
- Fees: no trading fees, $75 account withdrawal fee, no account minimum
- Mobile and desktop availability
Webull
- Founded in 2017
- Founder: Wang Anquan
- Tradable assets: stocks, options, ETFs, and positions of cryptocurrency
- Available in the U.S., China, Japan, India, and a handful of other countries.
- Fees: no trading fees, $75 full/partial transfer fee, no account minimum,
- Mobile and desktop availability
Free Trade Pioneers
Robinhood is a household name now because it was one of the first apps to offer free stock trades. It also pioneered fractional share investing, opening new doors for investors who wanted to own just pieces of shares rather than the entire thing.
But, now that many apps also offer free stock trading, the space Robinhood used to inhabit on its own is getting crowded.
All the stock trades on Robinhood truly are free. The app makes money in other ways: selling trades to market makers, lending out money in cash accounts (similar to what banks do), and charging subscriptions to upgrade to Robinhood Gold.
If you trade options, you won’t have to worry about extensive fees, either. With Robinhood, you don’t have to pay a per-contract fee, which is a huge advantage.
Webull also offers free stock trading. There is no minimum account deposit unless you want to short stocks, in which case you will have to deposit $2,000.
One of the key differences between Robinhood and Webull is that Webull does not offer fractional shares. Being able to buy a small portion of a stock rather than the entire thing is essential for many investors who want to get into the markets without large amounts of cash.
Webull makes money much the same way as Robinhood, except Webull doesn’t offer a cash account.
Image: Webull offers four types of assets to trade: stocks, options, ETFs, and positions of crypto. Image from webull.com
Community
One of the ways Webull sets itself apart is the social side. The app has a feed which looks similar to Twitter and allows users to talk about recent market developments. If you make correct predictions on stocks, you can even earn points redeemable for various products within the app. The points allow you to enter competitions where you can earn real money. But, you can’t do much else with them, and the app seems to be intentionally vague about their purpose.
Charts, Data, and Educational Tools
Robinhood has tons of detailed, helpful charts, making it one of the better free stock trading platforms in terms of analytics. Their easy to use interface is sleek and simple. We like how streamlined the design of Robinhood is on mobile and web.
Within the app, Robinhood investors can set the list of top 100 stocks to a variety of parameters, such as market cap, amount risen, price, and other things.
For Webull, you will have to upgrade to get the more advanced charts. They also lack educational content, making it not an ideal choice for beginners.
Image: Robinhood has educational tools for investors of all skill levels, particularly those just starting out. Image from robinhood.com
Saving while you trade
Robinhood offers a high yield savings account so you can make money while you trade. This account offers a much higher yield than banks. Robinhood offers 0.30% APY compared to the national average of 0.04%. This is advantageous for traders who want to keep some money in the app and earn interest while they trade.
Webull does not offer a savings account.
A different type of crypto trading
Many stock trading apps began offering cryptocurrency trading as various coins started growing in popularity and value. But the coins on these two apps, and others like it, can be misleading. When you buy crypto on Robinhood or Webull, you are not buying the actual coins. Rather, you are buying a position that tracks the price of the coins. This means you cannot transfer your coins in and out of the app because you do not own them–you own a position.
For buying coins that you can transfer to an external wallet, check out our review of Coinbase. While buying positions of cryptocurrency can certainly put investors in the green, we recommend using a platform where you have access to the coins, such as Coinbase or Binance.
Image: Webull has a more extensive desktop platform than Robinhood. Image from webull.com
Day Trading
Webull is a good option for investors who want to day trade. By following the rules of the SEC, investors can day trade on Webull. With the desktop app, investors can use hot keys, meaning they can initiate a trade with the press of a single button.
Robinhood, on the other hand, does not allow investors to day trade–your account will be flagged. They have rules about what is considered day trading and what isn’t, but generally investors are allowed to initiate three day trades in a five day trading period without being flagged.
Recurring Investments on Robinhood
One of Robinhood’s newest features is recurring investments. Released in 2021, this allows users to purchase fractional shares automatically. This feature is great for investors who want to dollar cost average a stock over time. If an investor wants to put $10 into a certain stock each week, all they have to do is set that recurring investment in the app and it automatically carries it out.
Webull does not offer dollar cost averaging–investors will have to do that themselves.
Cons of Robinhood
Some of the not so great things about Robinhood:
- No mutual funds
- Issues with reliability and trustworthiness in recent years
- Lacking customer support
Cons of Webull
Here are the downsides of Webull to consider:
- No high yield savings account
- No mutual funds
- Need to upgrade to access more advanced charts and data
- Lacking educational content
- No fractional shares
- No automatic dollar cost averaging
Image: Robinhood offers educational tools for investors just learning about the markets. This image shows information on options. Image from robinhood.com
Our View
Robinhood has a few defining features that put it above Webull. The ability to invest in fractional shares is critical for many investors, and Webull has yet to introduce that. Robinhood has better charts and tools for beginners, whereas Webull users will have to pay to upgrade or get their information elsewhere. Robinhood also has a high yield savings account with a much better APY than banks can offer now. And, with their automatic investing feature, investors can dollar cost average their favorite stocks.
If you want to day trade, however, Webull is the better option. Webull also has a better desktop interface than Robinhood.
Overall, we recommend Webull for day traders and more advanced investors and Robinhood for traders who are just starting out or who want to invest with less cash on hand.
Q&A
Is Robinhood in the U.S.?
Yes, Robinhood is available in the United States.
Is Webull in the U.S.?
Yes, Webull is available in the United States.
Does Robinhood have crypto?
Yes, you can trade cryptocurrency on Robinhood. But, unlike platforms like Coinbase and Binance, you are not trading the actual coin. Rather, you are investing in a position that tracks the price of the coin. You do not have access to an actual wallet, nor can you transfer your holdings into a wallet.
Does Webull have crypto?
Yes, you can trade cryptocurrency on Webull. But it’s a similar story to Robinhood, where you can’t hold the actual coins. Rather, you’re buying a position that tracks the price of the coin, so you can’t transfer the coins in and out of your Webull account. For storing coins in your own wallet, you’ll have to look elsewhere.
Is Robinhood safe?
Yes, you can be sure your funds are safe on Robinhood. They are SEC regulated and members of FINRA. Investments are covered up to $1.5 million in cash and $10 million in securities.
Is Webull safe?
Yes, you can be sure your funds are safe on Webull. They are SEC regulated and members of FINRA. Investments are covered up to $250,000 in cash and $500,000 in securities.
Can you day trade on Robinhood?
To a certain extent, yes, you can day trade on Robinhood. If you exceed the limit of three day trades within a five day trading period, your account will be flagged.
Can you day trade on Webull?
Yes, you can day trade on Webull.
How does Robinhood make money?
Similar to how a bank makes money, Robinhood makes money off of lending out the funds in your cash account and then earning interest on those funds. They also make money off the paid services they offer, such as live phone transactions, foreign stock transactions, and account withdrawals/transfers. Robinhood Gold is a paid upgrade which generates more revenue for the company.
It has also been reported by Bloomberg News that Robinhood makes money off of selling trades to market makers, which offer better prices to execute the trade. Their website says they have relationships with third parties that offer rebates to brokerages such as Robinhood, therefore getting a cheaper price.
How does Webull make money?
Webull makes money in a similar way to Robinhood. Webull sells trades to market makers that offer rebates for brokerages. Users can also pay to upgrade their account to get better metrics. Trading on margin is another way the app makes money–it charges interest on users who trade on margin.
What can you do with Webull points?
With your Webull points you can enter competitions where traders compete for real money. Otherwise, what you can do with points is vague and not easily searchable on their site.
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