On this planet of on-line investing, you’ve received loads of selections. Actually, the variety of choices may be overwhelming, notably if you happen to’re simply getting began as an investor. For those who’ve been doing analysis, you’ve in all probability heard of each Vanguard and Robinhood and chances are you’ll be wanting a Vanguard vs Robinhood comparability.
Excellent news: we’ve received what you want! Whereas these two platforms won’t seem to have very a lot in frequent, both is perhaps best for you as a newbie. It will depend on 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 centered 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 gives a mobile-first expertise.
We’re evaluating the 2 as a result of they characterize two totally different approaches to investing. Whereas Vanguard affords traders extra asset courses, Robinhood is the one one of many two that enables cryptocurrency buying and selling and no minimal account steadiness. Each supply retirement accounts, and each are FINRA members which are regulated by the SEC.
Hold studying to match Robinhood vs Vanguard and find out about their similarities and variations, how a lot they value, and which one is the precise alternative in your funding journey.
Robinhood vs Vanguard: Key Variations
Let’s begin by exploring a few of the key variations between Robinhood and Vanguard. We’ll deal with two of a very powerful issues when selecting an internet brokerage: account sorts (with a particular deal with retirement) and funding asset courses.
Account Sorts Accessible
If opening a retirement account is vital to you, then you need to be conscious that Vanguard affords extra kinds 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 selections: conventional IRAs and Roth IRAs. That stated, 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. (Learn: IS ROBINHOOD GOLD WORTH IT?)
Funding Selections
Some of the vital issues new traders ought to know is the fundamentals of portfolio balancing and diversification. This stuff shield traders by guaranteeing that they don’t have too excessive a proportion of their whole holdings in anyone asset or asset class. In different phrases, you want a mixture of investments with totally different threat components in your portfolio.
Robinhood doesn’t have an enormous array of asset courses, 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 similar to Bitcoin, Ethereum, and DOGE. They provide a complete of twenty-two cash to commerce as of January 2025.
Vanguard has a bigger variety of belongings 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 belongings that don’t react to financial stress the identical manner. For instance, when inventory costs are in a downturn, bonds can present stability and safety.
You should utilize 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. You can too purchase cryptocurrencies, which some traders view as a hedge in opposition to inflation. For those who do purchase crypto, remember that it’s a much more risky asset than shares or bonds.
One ultimate be aware 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 right now and obtain as much as $1500 of inventory per yr by referring mates on Robinhood!
Vanguard vs Robinhood: Efficiency
Whereas an organization’s historical past isn’t essentially an indication that it’s a very good match in your funding wants, we do suppose it’s helpful to know a bit about Vanguard vs Robinhood by way of every firm’s efficiency.
Let’s begin with a number of salient info about Vanguard.
The corporate was based in 1975 by John C. Bogle.
At first, Vanguard had solely three staff on the time of its IPO. At present it has roughly 20,000 staff.
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 belongings 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 staff.
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 belongings beneath custody (AUC).
Each corporations 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 belongings you’ll wish to take into account earlier than selecting an internet brokerage is how a lot you’ll pay in charges. Robinhood was a pioneer on the earth 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.
The world the place charges for Vanguard can get complicated is if you happen to purchase mutual funds. Most of Vanguard’s funds don’t have a buying and selling payment, however a number of do. You’ll want to ensure to learn the superb print. Mutual funds and ETFs that aren’t administered by Vanguard do include charges that modify.
Yow will discover Robinhood’s full payment schedule right here, and Vanguard’s payment schedule right here.
Vanguard vs Robinhood: Consumer Expertise
Each Robinhood and Vanguard have labored to offer customers with a passable and intuitive consumer expertise.
Robinhood’s cell app (learn our ROBINHOOD APP REVIEW) 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 info obtainable 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 simple 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 rookies can discover ways to use Vanguard shortly.
Professional Tip:
Enroll right now and obtain as much as $1500 of inventory per yr by referring mates 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 you must learn 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 want a Roth as a result of positive aspects and withdrawals are tax-free. (For more information, learn our ROBINHOOD IRA REVIEW!)
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. For those who’re somebody who doesn’t have an employer-sponsored retirement plan, opening an IRA with Robinhood lets you make the most of matching funds.
Tax Advantages and Contribution Limits
There’s no distinction between Vanguard and Robinhood with regards to IRA contribution limits. These limits are set by the IRS and so they don’t range 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 individuals 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 earnings 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 prime is in retirement planning. When you have 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 you could have saved to have a cushty retirement.
Robinhood doesn’t have retirement planning instruments, so if you happen to determine to make use of Robinhood, you’ll want to search out these instruments elsewhere.
Professional Tip:
Enroll right now and obtain as much as $1500 of inventory per yr by referring mates on Robinhood!
Which Platform Fits Your Wants?
The query for you is which of those two platforms most accurately fits your wants as an investor? Right here’s our take.
Robinhood’s free account is right for starting traders who wish 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’ll be able to 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 intensive analysis or get steering on tips on how 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 if you happen to want it. It additionally has a robo dealer if you happen to’re searching for steering at a low value. There are some extra 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 a variety of similarities and some vital variations.
For those who’re somebody who doesn’t thoughts being self-directed and doing your personal analysis, Robinhood’s low prices and streamlined interface make it a sensible choice. We additionally want Robinhood for IRAs due to their matching program, which is one thing that almost all brokerages don’t supply.
Vanguard affords extra in the best way {of professional} recommendation, with a number of extra retirement choices and extra asset courses general. Nevertheless, 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 expect Robinhood is the higher alternative for lots of people who wish to save for retirement. You may arrange a standard or Roth IRA free of charge, make the most of matching funds, and purchase fractional shares.
To see how Robinhood stacks up in opposition to one other common platform, learn: TD AMERITRADE VS ROBINHOOD!
FAQs
Sure, we expect Robinhood is nice for IRAs, notably 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. Nevertheless, it might not all the time be simple (in both case) to calculate charges forward of time. Our suggestion is to evaluation all payment disclosures on the time of a commerce to make sure you perceive what you’re paying.
The reply will depend on what you need from an internet brokerage. For those who’re somebody who values a user-friendly, mobile-first, no minimal funding expertise, then Robinhood is the apparent alternative. The simplified interface makes Robinhood simple to make use of. Youthful and extra adventurous traders may additionally want Robinhood as a result of it affords crypto buying and selling, which Vanguard doesn’t. For those who’re extra desirous about a long-term, buy-and-hold technique, then chances are you’ll want Vanguard.
Each Robinhood and Vanguard take consumer safety severely. Each use encryption and SSL validation, plus password safety and two-factor authentication (2FA). Robinhood has skilled a knowledge breach of non-sensitive information. Customers of each companies are protected by the Securities Investor Safety Company, SIPC, insurance coverage as much as $500,000.
