When you're ready to make an investment, you'll need to open a brokerage account to place a trade. Online discount brokers like Capital One and Robinhood open up the world of investing to individual investors, bringing Wall Street to your computer or mobile device. There's more you should know about each broker's commission price schedule. Robinhood doesn't charge commission on trades, but it only allows for investors to buy stocks and ETFs.
It doesn't currently offer the ability to trade options or mutual funds. Capital One has some low-cost options. Your actual trading costs can also be reduced by special offers. Check out some special offers for traditional brokerage accounts and IRA accounts to see if you qualify for some perks that include cash bonuses and free trades just for opening an account. Not all trades require that you pay a commission.
Commission-free ETFs and no-transaction-fee NTF mutual funds can be bought and sold without paying a fee to your brokerage.
Here's how Capital One and Robinhood compare on commission-free choices. Each broker wins a column here. Robinhood's free trades on all ETFs easily tops Capital One's nonexistent commission-free ETF list, but Capital One's mutual fund access sweeps Robinhood, which doesn't offer the ability to invest in mutual funds.
Depending on your needs, you could make the case for either brokerage being better for you. You don't have to be super wealthy to be an investor. In fact, both Robinhood and Capital One are no-minimum stock brokerages, meaning that you can open an account with the spare change in your pocket.
Practically speaking, it may be advantageous to start with more than the bare minimum. While neither broker has a minimum requirement for initial deposits, you'll want to have enough money to buy shares of a stock, ETF, or mutual fund in order to actually make your first investment. Shares of most investments trade for more than just pocket change.
You can trade on your phone with mobile apps from Robinhood or Capital One. We believe that preference for a trading platform is usually based on personal opinion and an individual's personal strategy. As buy-and-hold investors, we at The Motley Fool don't really care about what a trading platform looks like, or how many charts we can load on a screen.
For us, it's all about whether or not we can make a trade, and frankly, any broker can do that. Much like the perennial debate over Mac vs.
Windows, personal preference is usually the driving factor behind a preference for a trading platform. With that in mind, we'd encourage you to take any broker's platform for a test drive if a platform is of particular importance to you. We'll point out that Robinhood is only available on mobile devices phones, tablets, etc.
Most online brokers allow you to invest in foreign companies with some limitations. Below, we've compared the foreign investment opportunities available as a client of Capital One or Robinhood. Capital One clients can freely trade ADRs. Neither broker allows for trading in international stocks on foreign stock exchanges, however.
This may be more or less important, depending on whether or not you want to invest in companies domiciled outside the United States. As a general rule, we tend to think that having access to research can be a good perk of opening a brokerage account.
Besides, most research is available for free just for having an account, so it won't necessarily cost you if you don't make use of it. Capital One provides some screening tools, in addition to Morningstar data that powers its research library.
It also offers heat maps, alerts, and other features to help you stay on top of your portfolio. Robinhood doesn't currently offer research to its clients, which is one of the trade-offs to its no-commission business model.
As long as you can connect to the internet with your phone or tablet, you can make a trade through mobile trading apps provided by Capital One or Robinhood. Depending on your needs, you could make the case for either brokerage. On one hand, Robinhood's commission-free model may be preferable to investors who are just starting out, as well as investors who are especially price sensitive.
Capital One charges commissions, but it offers access to investments that Robinhood does not, including more foreign companies, options, and mutual funds. The Motley Fool does not endorse any particular broker, but we can help you shop around.
If a retirement account is what you're looking for, the IRA Center compares brokerages on their features specific to retirement accounts. Jordan Wathen has no position in any stocks mentioned.
The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. I think stock investors can benefit by analyzing a company with a credit investors' mentality -- rule out the downside and the upside takes care of itself.
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