On the planet of on-line investing, you’ve obtained loads of decisions. Actually, the variety of choices may be overwhelming, significantly in case you’re simply getting began as an investor. In the event you’ve been doing analysis, you’ve most likely heard of each Vanguard and Robinhood and you could be wanting a Vanguard vs Robinhood comparability.
Excellent news: we’ve obtained what you want! Whereas these two platforms won’t seem to have very a lot in widespread, both is perhaps best for you as a newbie. It depends upon your technique and preferences.
Each are well-regarded and well-reviewed buying and selling platforms. Each supply a number of buying and selling choices and mutual funds and have targeted on offering a user-friendly expertise for traders. Vanguard has an extended historical past and is extra geared towards conventional investments like mutual funds, whereas Robinhood is newer and offers a mobile-first expertise.
We’re evaluating the 2 as a result of they signify two completely different approaches to investing. Whereas Vanguard affords traders extra asset lessons, Robinhood is the one one of many two that permits cryptocurrency buying and selling and no minimal account steadiness. Each supply retirement accounts, and each are FINRA members which can be regulated by the SEC.
Preserve studying to match Robinhood vs Vanguard and find out about their similarities and variations, how a lot they price, and which one is the fitting alternative to your funding journey.
Robinhood vs Vanguard: Key Variations
Let’s begin by exploring a number of the key variations between Robinhood and Vanguard. We’ll concentrate on two of a very powerful concerns when selecting an on-line brokerage: account sorts (with a particular concentrate on retirement) and funding asset lessons.
Account Sorts Accessible
If opening a retirement account is essential to you, then try to be conscious that Vanguard affords extra varieties of accounts than Robinhood.
Vanguard customers can open these accounts:
- Conventional and Roth IRAs
- 401(okay) rollovers
- SEP accounts
- Spousal IRA
- SIMPLE IRA
- 529 account
- UGMA/UTMA
In contrast, Robinhood affords solely two account decisions: conventional IRAs and Roth IRAs. That mentioned, additionally they supply one thing that Vanguard doesn’t: IRA matching contributions. Anybody with a free Robinhood account receives 1% matching in the event that they open an IRA. Robinhood Gold members pay for membership however get 3% matching plus different advantages in return.
Funding Decisions
Some of the essential issues new traders ought to know is the fundamentals of portfolio balancing and diversification. This stuff shield traders by making certain that they don’t have too excessive a proportion of their complete holdings in anybody asset or asset class. In different phrases, you want a mixture of investments with completely different threat components in your portfolio.
Robinhood doesn’t have an enormous array of asset lessons, nevertheless it does supply entry to numerous shares and exchange-traded funds (ETFs) which permit traders to diversify their inventory holdings. In addition they supply traders the chance to commerce cryptocurrencies reminiscent of Bitcoin, Ethereum, and DOGE. They provide a complete of twenty-two cash to commerce as of January 2025.
Vanguard has a bigger variety of property and mutual funds to put money into, together with:
- Shares
- ETFs
- Mutual funds
- Bonds
- Certificates of Deposit
- Choices
What does all of this imply for you as an investor? True portfolio diversification requires shopping for several types of property that don’t react to financial strain the identical approach. For instance, when inventory costs are in a downturn, bonds can present stability and safety.
You should use Robinhood to diversify your inventory holdings, because you’ll have entry to 10,000+ shares and ETFs, together with nearly the whole lot traded on the US inventory market. It’s also possible to purchase cryptocurrencies, which some traders view as a hedge in opposition to inflation. In the event you do purchase crypto, take into account that it’s a much more unstable asset than shares or bonds.
One closing word is that Robinhood permits for fractional buying and selling of shares, ETFs, and cryptocurrencies, and Vanguard solely permits fractional buying and selling for ETFs.
Professional Tip:
Enroll at the moment and obtain as much as $1500 of inventory per yr by referring pals on Robinhood!
Vanguard vs Robinhood: Efficiency
Whereas an organization’s historical past isn’t essentially an indication that it’s match to your funding wants, we do assume it’s helpful to know a bit about Vanguard vs Robinhood when it comes to every firm’s efficiency.
Let’s begin with a number of salient information about Vanguard.
- The corporate was based in 1975 by John C. Bogle.
- At first, Vanguard had solely three workers on the time of its IPO. Right now it has roughly 20,000 workers.
- The IPO was anticipated to lift $150 million, however raised solely $11 million.
- As of 2024, the Vanguard funding platform has 50 million customers.
- Vanguard is a privately held firm with roughly $10.1 trillion property beneath administration (AUM).
Now, let’s have a look at Robinhood.
- Robinhood was based in 2013 by Vladimir Tenev and Baiju Bhatt with the mission of democratizing investing.
- As of 2024, Robinhood has roughly 10 million lively customers.
- Robinhood has grown from being a two-many operation to having roughly 3,800 workers.
- Robinhood is a publicly traded firm and has a market capitalization of $44.52 billion as of January of 2025.
- In November of 2024, Robinhood had roughly $194 billion in property beneath custody (AUC).
Each firms have skilled spectacular progress and have proven that they will stand the take a look at of time.
Vanguard vs Robinhood: Buying and selling Charges and Commissions
One of many stuff you’ll need to take into account earlier than selecting an internet brokerage is how a lot you’ll pay in charges. Robinhood was a pioneer on this planet of commission-free buying and selling, however that doesn’t imply there aren’t any charges concerned. Vanguard affords low charges for mutual funds however different charges are greater.
| Robinhood | Vanguard | |
| Buying and selling fee | $0 | $0 |
| Choices price | $0 | $1 |
| Account price | $5 monthly for Robinhood Gold | $25 per yr; could also be waived in case you select to obtain e-statements |
| Withdraw to a different acct | $100 | $100 |
| Advisory price | N/A | $15-$30 per $10,000 |
The world the place charges for Vanguard can get complicated is in case you purchase mutual funds. Most of Vanguard’s funds don’t have a buying and selling price, however a number of do. You’ll want to ensure to learn the tremendous print. Mutual funds and ETFs that aren’t administered by Vanguard do include charges that fluctuate.
You’ll find Robinhood’s full price schedule right here, and Vanguard’s price schedule right here.
Vanguard vs Robinhood: Consumer Expertise
Each Robinhood and Vanguard have labored to supply customers with a passable and intuitive person expertise.
Robinhood’s cell app and web site supply related experiences. They don’t have a ton of options, which can be a part of why their interfaces are so streamlined. There’s restricted market data accessible and never a lot in the best way of analysis and evaluation instruments, however that’s not the place Robinhood shines. What we like is how straightforward it’s to provoke and finalize trades.
Vanguard affords extra in the best way of options, together with screeners and charts. On the floor, that makes the interface really feel extra difficult than it really is. We expect that even newbies can discover ways to use Vanguard shortly.
Professional Tip:
Enroll at the moment and obtain as much as $1500 of inventory per yr by referring pals on Robinhood!
Robinhood IRA vs. Vanguard IRA: Which Is Higher for Your Retirement?
Each Robinhood and Vanguard supply customers the choice to open an Particular person Retirement Account. There are some variations it’s best to find out about.
IRA Choices and Advantages
As we’ve already famous, Robinhood affords two IRA choices, conventional and Roth. A standard IRA permits for pre-tax contributions, whereas Roth contributions are made on a post-tax foundation. Many individuals choose a Roth as a result of positive aspects and withdrawals are tax-free.
Vanguard affords each conventional and Roth IRAs, together with SEP, SIMPLE, and spousal IRAs. You’ll have extra flexibility with Vanguard, however Robinhood affords matching contributions and Vanguard doesn’t. In the event you’re somebody who doesn’t have an employer-sponsored retirement plan, opening an IRA with Robinhood lets you reap the benefits of matching funds.
Tax Advantages and Contribution Limits
There’s no distinction between Vanguard and Robinhood in relation to IRA contribution limits. These limits are set by the IRS they usually don’t differ from brokerage to brokerage. For 2025, the annual contribution restrict for IRAs is $7,000. There’s a catch-up contribution of $1,000 for folks over the age of fifty. As of 2025, the catch-up restrict shall be tied to a cost-of-living adjustment.
There are tax advantages related to IRAs, and these are additionally decided by the federal government. Conventional IRA contributions are made on a pre-tax foundation and also you could possibly deduct them, relying in your circumstances. You’ll pay taxes in your distributions, together with any income you made in your investments. Roth IRA contributions are made on a post-tax foundation, so that you gained’t pay taxes in your distributions, together with any earnings out of your investments.
Retirement Planning Instruments
One space the place Vanguard clearly comes out on high is in retirement planning. When you’ve got a portfolio with Vanguard, you may get monetary recommendation to assist with retirement planning, Vanguard mutual fund suggestions, and retirement calculators. These can all allow you to handle your portfolio and decide how a lot cash it’s essential to have saved to have a cushty retirement.
Robinhood doesn’t have retirement planning instruments, so in case you resolve to make use of Robinhood, you’ll want to seek out these instruments elsewhere.
Professional Tip:
Enroll at the moment and obtain as much as $1500 of inventory per yr by referring pals on Robinhood!
Which Platform Fits Your Wants?
The query for you is which of those two platforms most closely fits your wants as an investor? Right here’s our take.
Robinhood’s free account is supreme for starting traders who need to begin constructing a portfolio with out paying fee. You can begin investing with as little as $1, and since Robinhood permits for fractional buying and selling of shares, ETFs, and cryptocurrencies, you possibly can have interaction in some diversification as you find out about investing.
We additionally like Robinhood’s easy and user-friendly interface. It’s not the place to do in depth analysis or get steering on the right way to make investments, nevertheless it’s a useful gizmo for individuals who worth simplicity. Lastly, Robinhood matches customers’ IRA contributions.
Vanguard affords extra general funding choices, plus the chance to get skilled funding recommendation in case you want it. It additionally has a robo dealer in case you’re on the lookout for steering at a low price. There are some further retirement choices, however they don’t supply matching funds.
Vanguard is greatest suited for individuals who need skilled steering and are prepared to make use of a buy-and-hold technique.
Conclusion
In our Vanguard vs Robinhood comparability, there are plenty of similarities and some essential variations.
In the event you’re somebody who doesn’t thoughts being self-directed and doing your individual analysis, Robinhood’s low prices and streamlined interface make it a good selection. We additionally choose Robinhood for IRAs due to their matching program, which is one thing that the majority brokerages don’t supply.
Vanguard affords extra in the best way {of professional} recommendation, with a number of further retirement choices and extra asset lessons general. Nonetheless, there’s restricted fractional buying and selling and no IRA matching, so that you gained’t have the chance to speed up your retirement financial savings. On the entire, we predict Robinhood is the higher alternative for lots of people who need to save for retirement. You may arrange a standard or Roth IRA without spending a dime, reap the benefits of matching funds, and purchase fractional shares.
FAQ
Sure, we predict Robinhood is sweet for IRAs, significantly for individuals who don’t have an employer-sponsored retirement plan. We are saying that due to Robinhood’s matching program, which affords free subscribers 1% matching on IRA contributions and Robinhood Gold members 3% matching.
Each Vanguard and Robinhood disclose charges on the time of a commerce, so we wouldn’t say there are hidden charges. Nonetheless, it could not at all times be straightforward (in both case) to calculate charges forward of time. Our suggestion is to assessment all price disclosures on the time of a commerce to make certain you perceive what you’re paying.
The reply depends upon what you need from an internet brokerage. In the event you’re somebody who values a user-friendly, mobile-first, no minimal funding expertise, then Robinhood is the apparent alternative. The simplified interface makes Robinhood straightforward to make use of. Youthful and extra adventurous traders may additionally choose Robinhood as a result of it affords crypto buying and selling, which Vanguard doesn’t. In the event you’re extra desirous about a long-term, buy-and-hold technique, then you could choose Vanguard.
Each Robinhood and Vanguard take person safety severely. Each use encryption and SSL validation, plus password safety and two-factor authentication (2FA). Robinhood has skilled an information breach of non-sensitive data. Customers of each providers are protected by the Securities Investor Safety Company, SIPC, insurance coverage as much as $500,000.
