What are the differences between eToro and Robinhood? If you have to make a choice between popular platforms such as eToro and Robinhood, it may seem to be very difficult.
You will need to make a proper comparison between the two platforms considering the differences between their features, funding methods, fees, financial markets, and lots of things to make a correct decision.
This article is all about those differences, both the major ones as well as the less significant ones.
Robinhood or Robinhood Markets Inc is considered to lead the way in trading stocks and ETFs without any commission.
It has been in business for 8 years and is well known for its financial team that enables the self-directed users to do secure and convenient trading, even with a few cryptocurrencies.
In comparison, eToro is an exchange that is considered to be the leading social trading platform.
This is actually a multi-asset brokerage business that mainly focuses on providing copy trading and other financial services.
It has been around in the market for 14 years now and also offers the users an opportunity to invest both in stocks as well as in cryptocurrencies.
Apart from that, the platform is also a good one for trading CFD with a wide range of underlying assets.
- 15 Differences Between eToro and Robinhood
- Which is Better – eToro or Robinhood?
15 Differences Between eToro and Robinhood
Well, these are not the only differences between these two popular exchanges. If you are unaware of them, you are in the right place.
Ideally, when it comes to choosing one of the best crypto exchange platforms, knowing the differences between them will help you to make a choice between them, and a good one at it.
It can be really a hectic task sometimes, especially if you are not aware of the right way to go ahead with it. Well, not anymore, if you read on.
Starting with the features of the two platforms, eToro offers some better features to the traders as well as the investors in spite of the fact that both these platforms allow setting price alerts and one-click trading.
However, the similarities seem to end just there. Now, here are the differences.
1. Access to Financial Instruments and Products
The eToro platform allows access to more than 2,000 different financial instruments such as stocks, crypto coins, ETFs, currencies, indices, limit orders, commodities, CFD trading with currencies, and cryptocurrencies.
In comparison, Robinhood also offers a set of different products that include stocks, funds, gold, options, crypto coins, and cash management and add up to 5,000 financial assets. The users are also allowed to do hedge trading on this platform.
2. Account Types
The users of the eToro platform will get access to different types of accounts and can open one according to their choices such as a demo account, standard account, VIP account, and an Islamic account.
On the other hand, the Robinhood exchange platform offers only two different types of accounts such as a demo account and its unique Robinhood Gold account.
3. Funding Methods
If you use the eToro platform, you will find that the exchange supports different funding methods. You can make payments by using a credit card, PayPal, bank transfer, Neteller, iDEAL, Rapid Transfer, Klarna or Sofort, local online banking, and Skrill.
Robinhood, in comparison, allows only bank transfer as a funding method. They do not accept funding through credit cards or debit cards or through any electronic payment gateways such as PayPal.
This means that you do not have any alternative way to make your deposit if there is an issue with the system or any sudden restrictions imposed by your bank. However, if you use this platform you will get immediate access to funds up to $1,000 in order to trade crypto coins.
4. Language Support
The eToro platform is multilingual and provides support in different languages which include English, Spanish, French, German, and Italian.
On the flip side, the Robinhood platform is also multilingual but it supports large and more varied types of it such as English, Dutch, Spanish, French, Italian, Polish, Russian, Romanian, Turkish, Chinese, Serbian, Norwegian, Swedish, Slovak, and Arabic.
5. Financial Markets
Access to financial markets offered by eToro includes forex, indices, majors, FTSE, Nikkei, ETFs, Bitcoin, agricultures, metals, and energies.
On the other hand, the financial markets of Robinhood are indices, Penny stocks, FTSE, Dow Jones, ETFs, Nikkei, and Bitcoin.
6. Cryptocurrency Support
In terms of cryptocurrencies, the users of the eToro platform allow them to store cryptocurrencies in a wallet and transfer them as well. This eToro wallet also allows the customers to transfer the crypto assets to the wallet from the platform.
Apart from that, the platform also allows the users to convert one type of crypto coin to another. In addition to all that, the eToro platform also offers its users a margin trading feature.
By using this feature the users can take a loan from the platform against their funds, which, in turn, allows them to have much greater exposure to trading possibilities.
As for the crypto coins support, the platform allows trading with Bitcoin, Litecoin, XRP, EOS, XLM, ETH, IOTA, ADA, EOS, Bitcoin Cash, and several other types of crypto coins.
As for the Robinhood trading platform, it allows its users to buy and sell crypto coins without requiring them to pay any commissions for it. The best part of this platform is that the users do not need to buy or sell an entire coin for Robinhood crypto.
However, this facility is not allowed for Dogecoin, in which the minimum requirement is 1 DOGE. As for the crypto coin support, as of now, Robinhood allows trading with Bitcoin, Dogecoin, Bitcoin Cash, Bitcoin SV, Litecoin, Ethereum, Ethereum Classic, and other different types of crypto coins.
7. Education Program
When it comes to educating the users about trading and investing, eToro offers free courses that help both the beginners in this field as well as the experienced traders.
In addition to that, they also provide useful and comprehensive tutorials, podcasts and more. The most significant aspect of this platform is that it allows social trading which allows the customers to connect with the community and share their ideas and experiences in trading.
Their unique Copy Trading feature also allows the users to learn from other profitable traders within the community and copy their trades or trading strategies while opening or closing their positions.
Robinhood, on the other hand, also offers the essentials for learning the nuances of trading and investing of different types of financial instruments including cryptocurrencies.
In addition to that, the platform also offers their users a specific segment called the Investment Basics, which is small yet helpful for the beginners in this space to learn more about the stock and stock markets, investment, and lots more.
There are also a host of articles available in the virtual library of this platform that will help you to learn a lot of things about trading and investments.
As for the fees charged by eToro, it includes a commission and an account inactivity fee of $10 if you do not log into your account for 12 months at a stretch. As for the fees charged for making any withdrawals it is $5 for every withdrawal request made outside the US.
There is also a rollover or overnight or weekend fee charged by this platform from time to time depending on the market conditions worldwide. As for the CFD positions left open overnight, the fee is charged between Monday and Friday at 5 pm EST.
Though the platform does not charge any fee for making a deposit or management but has a minimum deposit amount requirement which is $200 for standard accounts with a minimum trade of at least $25.
The platform also charges a cryptocurrency transfer fee that varies for different blockchain providers and spreads on purchases only once but it differs from one coin to the other ranging between 0.75% and 5%, subject to change over time.
As for the fees charged by Robinhood, there is no deposit fee, bank transfer fees, ACH fees, incoming account transfer fees, wire fees, account maintenance fees, stop payment fees, inactivity fees or commissions.
However, the platform charges a fee of $75 when you want to transfer your assets out of the platform irrespective of the transfer being partial or complete.
Apart from that, this platform charges $20 for domestic overnight mail, $50 for international overnight mail, $5 for paper statements, $5 every month for Robinhood Gold account, a Trading Activity Fee which is $0.000119 for each share or equity sells and $0.002 for every contract or options sells.
The SEC fee for sales made only is $5.10 for every $1,000,000 worth of principal.
9. Mobile App
Both these trading platforms offer their users a mobile app for their convenience in trading. As for the eToro app, it is compatible with both Android and iOS devices.
Therefore, you can use this app on almost anything whether it is on the web platform, your tablet, or any other mobile devices. Apart from that, the traders residing outside the United States can also use it as a social media platform to meet their trading needs.
This is a very useful and helpful feature especially for those traders who deal with cryptocurrencies. Over and above all these features, the platform also offers an option to the new users especially to open a demo account on it.
On the other hand, the Robinhood app is also available on both iOS and Android devices and the users can use it on a tablet, on the web platform, as well as on any mobile device just like the eToro app.
However, in this app, you will find that the crypto offerings are quite limited. It also allows the users to create a demo account and practice trading on the app itself for the new users but, in addition to that, it also sends push notifications as and when there is a change in the price of stocks.
10. Regulation and Trust
When it comes to the safety aspect, eToro is quite safe to use since this zero-commission stock broker is regulated by the FCA or the Financial Conduct Authority, the CySEC or Cyprus Securities & Exchange Commission, the MiFID or The Markets in Financial Instruments Directive, and the ASIC or The Australian Securities and Investments Commission to operate in different locations.
The trust of the users on this platform is established by the fact that this particular exchange platform has been around in the market for more than 14 years now.
What’s more, this platform also ensures that chances of frauds are minimized and requires email confirmations for any withdrawals and transactions made on it.
The platform follows a stringent verification process and also ensures that the personal details and data information are guarded safely with SSL encryption. Most importantly, all the funds of the customers are stored safely in Tier 1 banks.
As for Robinhood, it is also quite safe being a member of the SIPC. This platform is also regulated by the FCA, the Securities and Exchange Commission or SEC, and FSC. Like eToro, the users need to go through a strict verification process and email confirmation for security purposes for making any transactions over this platform.
However, in its existence of 8 years or so, this platform has had a few controversies. For example, in 2020, the traders using this platform were infuriated because they could not use its app during the busiest days of the year when they wanted to trade in high volumes.
Each of these platforms manages the funds of its customers with varying levels of security. As for eToro, the security measures include Two-Factor Authentication or 2FA via SMS and cold storage.
On the other hand, the security features of Robinhood include Two-Factor Authentication via an app or SMS, biometric login through Face and Touch ID, account passwords through top-class BCrypt hashing algorithm, encryption of sensitive info before storage, and Transport Layer Security or TLS protocol while communicating with servers.
As for insurance, the Robinhood platform offers SIPC Insurance of up to $500,000 and up to $250,000 for cash claims, additional SIPC coverage from Lloyd’s of London up to $100 million, up to $1.5 million for cash claims and up to $10 million for securities for each customer.
These underwriters also offer cryptocurrency crime insurance. Moreover, the platform also provides coverage in full if there is any direct loss of amount due to any illegal activity in any account, including securities, cash and crypto, provided that there is no fault of the users found in it.
On the other hand, eToro also offers insurance of up to $1 million in investments for their clients in Europe, UK, and Australia and for the US it is up to $250k from FDIC.
13. Referral Program
Though both these platforms offer referral programs for their users, there is a big difference in the rewards offered by each.
As for eToro, when you invite any friend of yours to this platform to join in, you will receive a reward of $50 from eToro provided the new user enters using your link and makes a minimum trade of at least $100.
The same reward amount is offered to both the referrer as well as the person referred. However, the platform needs the referred person to sign up via your link and also complete the registration process within a month’s time.
This program offered by this platform is called the Refer-a-Friend reward program and you can claim it up to 10 times. However, the estimated time of the rewards to be credited to your account is about 7 to 10 days.
In comparison, in the Robinhood referral program, you will receive the reward for inviting a friend of yours to join the platform as soon as he or she signs up with them and links the bank account.
Apart from that, the reward amount offered by Robinhood for referrals is also ten times that of eToro and is offered in stocks every calendar year.
According to the available stats, almost 98% of the participants typically receive a reward that has a store value ranging between $2.50 and $10.
Now, here are the differences in the benefits of these two platforms in brief. As for eToro, the platform is very simple in design and easy to use but for experienced traders.
It supports different payment methods and the app uses multiple languages. As for customer support, the platform offers a live chat option.
On the other hand, the advantages offered by Robinhood include the simple interface design that makes it easy to use for the beginners in this field, its multiple language support and a $0 minimum deposit.
As for the downsides of the eToro platform, it does not accept funds in Bitcoin or from American Express and it cannot be used in several countries such as Algeria, Belgium, India, Pakistan, and many others.
In comparison, the downsides of Robinhood include the exclusion of the live chat option from its app and it is not accessible in countries like Cuba, Iran, Syria, North Korea, and the Crimea province of Ukraine.
Which is Better – eToro or Robinhood?
Both eToro and Robinhood are big names in the world of online financial trading and therefore it is quite natural to ask which among the two is better and more recommended for you to use.
Well, the question is quite complicated and the answer to this lies in your specific needs.
It seems that both these platforms have an almost similar reputation in the crypto market and community with only a few complaints made by a few customers off and on.
However, to get a better idea, here are a range of factors to consider that will help you to choose one among them based on your individual financial goals, level of experience and knowledge, trading style, and expertise:
- As for the fees charged by the two platforms, eToro is much cheaper and their fees are also more transparent as compared to those of Robinhood.
- If you consider the number of coins supported, then it is eToro that has a significant edge over Robinhood as well.
- If you consider customer support, eToro has a slight edge as it also offers such support through live chat.
- As for licensing and regulatory compliance, both of these platforms are regulated and follow the legal frameworks of the particular localities where they operate. However, eToro has more regulatory bodies controlling their operations.
- When you consider the deposit and withdrawal methods offered by these platforms, eToro eclipses Robinhood with much more payment methods allowed. And, the time taken to process a withdrawal request on eToro is only one business day but that of Robinhood is just double that.
- In terms of the trading features, eToro again beats Robinhood with its feature-rich platform that is full of new technologies and innovations.
Therefore, as you can see, both these platforms come with their characteristic pros, cons, and attributes. However, eToro seems to be a bit better.
No wonder it has over 6 million users all over the world and also has Alec Baldwin featuring in an ad to draw more attention from the people on them.
Robinhood, too, has carved its way into this world and has made a significant impression as a reliable and suitable platform for the newcomers in the trading field and is hoping to gain adequate knowledge and experience to do well in the long run.
Considering all the factors mentioned above, it can be said that Robinhood is a go-to platform for the beginners who will find it much safer and easier to trade on, and it also has more tradable assets.
Since eToro is a CFD broker, it is certainly not recommended for first-time users.
The eToro platform, on the other hand, is an appropriate platform for those users who are more experienced, if not professionals, because it is considered to be more volatile in nature as compared to Robinhood.
This eToro platform also offers quite a wide range of financial instruments along with its unique social and copy trading feature.
This feature makes trading more interesting on this platform especially for those traders who do not want to make investment decisions by themselves.
Instead, this feature allows them to follow those of the experts and successful traders in the community.
However, your choice of platforms would eventually boil down to your location as well. And, if you do not know what you are doing or getting into, you should not choose any of them just like that.
You may not know that in 2020 there was a controversy surrounding Robinhood. A trader committed suicide when he saw a negative balance in his account.
This means that adequate research is compulsory before you make your final choice and move ahead with your trading and investing endeavors.
Therefore, take out some more time now and visit the respective sites of eToro and Robinhood as well as some third-party review sites to know more about them before you create an account and start trading.
Both Robinhood and eToro are good platforms for trading financial instruments and cryptocurrencies but both may not be suitable for all. Therefore, knowing the differences between them is vital, which was the main intention of this article.