Tastytrade and Robinhood are two tech-focused brokerage companies designed to keep investment expenses low -- and to facilitate trading in a user-friendly way. However, the platforms are designed for different types of investors. So if you're in the market for a new brokerage account and are comparing Tastytrade vs. Robinhood, here's a rundown of the similarities and differences you need to know.
Tastytrade vs. Robinhood: At a glance
| Offer | Tastytrade | Robinhood |
|---|---|---|
| Rating | Rating image, 4.0 out of 5 stars. 4.0/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | Rating image, 4.5 out of 5 stars. 4.5/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. |
| Commissions | $0 for stocks, $1 per option contract (opening trades only), 1% per crypto purchase and sale | $0 for stocks, ETFs, and options; $5 monthly for Robinhood Gold |
| Account Minimum | $0 | $0 |
| Next Steps | Open Account for Tastytrade Read Full Review | Open Account for Robinhood Read Full Review |
Tastytrade vs. Robinhood: Commissions & fees
The short version regarding fee comparison is that Robinhood is the cheaper of the two. Both platforms offer commission-free stock and ETF trades, as well as no account maintenance fees. But for certain other types of investments, there's a big difference.
LEARN MORE: Best Stock Brokers
Tastytrade charges an options commission of $1 per contract with a maximum of $10 per order, but only on opening trades. (In other words, you can sell options positions for free.) So this is effectively the same as a $0.50 per contract fee from most brokers, which charge for both sides of the trade. To be sure, this is certainly on the lower end of the spectrum among popular brokers, but Robinhood is one of the few places where options trading has no commissions whatsoever.
It's a similar story with cryptocurrencies. Both platforms allow cryptocurrency trading, but Robinhood is completely free. Meanwhile, Tastytrade charges a 1% fee on both purchases and sales, to a maximum of $10 per order.
| Tastytrade | Robinhood | |
|---|---|---|
| Stock & ETF commissions | $0 | $0 |
| Options commissions | $1/contract (opening only) | $0 |
| Crypto commissions | 1% | $0 |
| Mutual fund commissions | N/A | N/A |
| Account transfer fee | $75 | $100 |
| Account maintenance fee | $0 | $0 |
Data sources: Tastytrade and Robinhood.
Tastytrade vs. Robinhood: Investments available
Both of these brokers are designed for active traders, so there are a lot of similarities between the two. Both offer stocks, ETFs, options, cryptocurrencies, and fractional shares. Being able to trade fractional shares can be a big perk for investors. For example, let's say that Amazon stock is trading for $3,000 per share. Fractional share trading means you can buy part of an Amazon stock with just a few dollars. Neither broker offers mutual funds, CDs, or foreign exchange trading.
READ MORE: Best Options Trading Platforms
Tastytrade was built with options and futures traders in mind, so it is the only one of the two that offers futures trading. Robinhood has a slightly wider range of available cryptocurrencies. It also supports direct deposit and withdrawal of crypto assets through its wallet function. So, if you want to trade cryptocurrencies from your brokerage, Robinhood comes out ahead.
| Tastytrade | Robinhood | |
|---|---|---|
| Stocks and ETFs | Yes | Yes |
| Fractional shares | Yes | Yes |
| Options | Yes | Yes |
| Mutual funds | No | No |
| CDs | No | No |
| Bonds | Yes (Treasury) | No |
| Futures | Yes | No |
| Crypto | Yes | Yes |
| Currencies (forex) | No | No |
Data sources: Tastytrade and Robinhood.
Tastytrade vs. Robinhood: Account types available
When it comes to account types, both offer standard taxable brokerage accounts as well as traditional and Roth IRAs for retirement. There are two key differences to note. Robinhood has a spending account that includes a debit card. Its brokerage sweep program also lets customers earn interest on uninvested cash. However, if you want to open a joint account, you'll have to look elsewhere.
READ MORE: Best IRA Accounts
Tastytrade offers individual and joint brokerage accounts. Unlike Robinhood, it also offers SEP IRAs and corporate accounts. UGMA/UTMA custodial accounts are not yet available. But the platform does support trusts for those who want to set up an account to invest on behalf of a minor.
Both support margin trading (investing with borrowed money), but differently. Robinhood's flat rate depends on whether you sign up for its Robinhood Gold service, which significantly lowers the cost. You don't need to pay a membership fee to use margin with Tastytrade. However, its margin rates vary depending on the amount you borrow and can be costlier than Robinhood Gold's rates (but lower than Robinhood's non-premium rates).
Neither brokerage offers robo-advisor services. If that's a dealbreaker for you, check out our best robo-advisors.
| Tastytrade | Robinhood | |
|---|---|---|
| Taxable brokerage | Yes | Yes |
| Joint tenant | Yes | No |
| Margin | Yes | Yes |
| Robo-advisor | No | No |
| Traditional IRA | Yes | Yes |
| Roth IRA | Yes | Yes |
| Other IRA | SEP | No |
| Custodial | Some (trusts for minors) | No |
| Checking | No | Yes (through spending account) |
| Savings | No | Yes (through brokerage sweep program) |
| Credit card | No | No |
Data sources: Tastytrade and Robinhood.
Tastytrade vs. Robinhood: Mobile app and trading platforms
Both platforms have solid, but not outstanding, ratings for their mobile apps. When opening a new brokerage account, it is good to think about how you might use it and what features matter most to you.
Robinhood's app offers one of the most seamless ways to trade stocks and cryptocurrencies and manage an investment portfolio. Its ratings were significantly higher prior to the "meme stock" frenzy of early 2021, when it was forced to suspend trading of certain volatile stocks to the disappointment of many customers.
On the other hand, Tastytrade's focus is its desktop platform. Tastytrade was founded by former leaders at thinkorswim.The main focus was to build a high-powered trading platform, with tons of high-tech features designed for experienced options traders. Tastytrade also offers web-based trading capability, and its mobile app, but those aren't the main focus.
Final take
Both of these are excellent brokerage options, but they're targeted to different types of active investors.
Generally speaking, Robinhood is best for investors who want an easy way to buy, sell, and hold stocks and cryptocurrencies. On the other hand, Tastytrade is packed with features that appeal to more sophisticated investors and traders, and it may not be the best choice for newer investors.
READ MORE: Best Online Stock Brokers for Beginners
Alternatives to Consider
We recommend comparing brokerage options to ensure the account you're selecting is the best fit for you. To make your search easier, here's a short list of our best trading platforms of 2024.
| Account | Fees | Account Minimum | |
|---|---|---|---|
Featured Offer Rating image, 4.5 out of 5 stars. 4.5/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | $0 for stocks, ETFs, and options; $5 monthly for Robinhood Gold | $0 | Open Account for Robinhood |
Rating image, 4.0 out of 5 stars. 4.0/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | $0 per trade | $0 | Open Account for J.P. Morgan Self-Directed Investing |
Rating image, 5.0 out of 5 stars. 5.0/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | $0 commission for online U.S. stock and ETF trades; trade fractional shares for as little as $1 | $0 | Open Account for Fidelity |
FAQs
The best brokerage for you depends on your investment style, goals, and other needs. For example, if you're looking to open a retirement account you'll have different requirements from an active trader. Think about how you'll use the account, what assets you might want to buy, what fees you'll pay, and how usable the platform is.
Both brokerages allow you to open an account online. You will need to fill out your personal information and may need to provide extra documents to confirm your identity. The company will be in touch to ask for additional information or tell you your account is ready. Then it's a question of depositing money and deciding which investments you want to buy.
Our Brokerages Experts
By:Matt Frankel, CFP®
Writer, Analyst
Matt is a Certified Financial Planner™ and investment advisor based in Columbia, South Carolina. He writes personal finance and investment advice for The Ascent and its parent company The Motley Fool, with more than 4,500 published articles and a 2017 SABEW Best in Business award. Matt writes a weekly investment column ("Ask a Fool") that is syndicated in USA Today, and his work has been regularly featured on CNBC, Fox Business, MSN Money, and many other major outlets. He’s a graduate of the University of South Carolina and Nova Southeastern University, and holds a graduate certificate in financial planning from Florida State University.
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Ashley Maready is a former history museum professional who made the leap to digital content writing and editing in 2021. She has a BA in History and Philosophy from Hood College and an MA in Applied History from Shippensburg University. Ashley loves creating content for the public and learning new things so she can teach others, whether it's information about salt mining, canal mules, or personal finance.
