Two of the most popular free stock trading apps available are Robinhood and Stash Invest, which allow you to buy and sell stocks for free without paying trading commissions.
Each app has its pros and cons so I’ll be discussing each one in depth in this side by side comparison review.
Sign Up Requirements
Both apps are only available to US residents, people living in the United States or residents with a valid visa. As of now, Robinhood and Stash aren’t available to residents living outside the United States.
Types of Investments Available
Types of investment options are where these apps start to differ. Here’s a breakdown of the differences in trading products:
- Robinhood offers NYSE, NASDAQ, and many OTC publicly trading stocks as well as options trading, various ETFs and REITS. There are no mutual funds, bonds, or IRA accounts available on the app.
- Stash Invest offers a select group of publicly traded stocks on the NYSE and NASDAQ. There are no OTC stocks available on the app. They also offer a few low cost index funds and ETFs which track sectors for a specific sector like tranportation or cannabs.
Robinhood offers a much smoother trading experience with instant deposits and an easy “swipe up” process to buy and sell using their app. You can place market orders, limit orders, and stop loss order using the Robinhood app. They try their best to execute your trade at the lowest possible price and I’ve bought quite a few stocks at the 52 week low using their app.
Stash Invest is best known for “Auto Stash” deposits on a weekly basis where Stash automatically purchases shares for your account. The trading experience is in real-time and you must wait a few minutes for your deposits to show up in your account. You have a lot less control over your trading because Stash doesn’t offer limit orders.
Costs & Fees
Both apps offer commission-free trades but Stash invest charges more fees than Robinhood. Here’s a quick breakdown of the costs & fees for each broker:
- Stock Trades: $0 per trade
- Options Trades: $0 per trade
- $1 monthly fee for individual accounts under $5,000 (0.25% annual fee for accounts over $5,000
- $2 monthly fee for retirement accounts under $5,000 (0.25% annual fee for accounts over $5,000)
Fractional Shares Breakdown
So far, you may be wondering why would anyone use Stash Invest if they must pay a monthly or annual fee to use the service? Well, Stash offers fractional shares while Robinhood doesn’t offer this feature. Fractional shares allow you to buy small portions of stocks and build up a position over time. For example, you can invest $10 into Amazon and own a small percentage of 1 share while Robinhood requires you to purchase at least 1 whole share to open a position.
Fractional shares is a wonderful strategy to invest in more expensive stocks over time because consistent purchases lead up to large positions over tie.
Both companies offer a referral sign up program for account holders. Here’s a breakdown of the differences in each referral program:
- Robinhood offers you and your referral 1 free share of stock when they sign up under your referral link. You have a 1 in 200 chance of getting a free share of Apple, Berkshire Hathaway or Facebook. 1 in 150 chance of getting a free share of GE, Ford or Energy Transfer. Most free shares are cheaper stocks like Groupon or SiriusXM.
- Stash Invest gives you and your referral a free $5 cash reward for signing up under your referral link. Your $5 reward is credited once your referral signs up and makes a deposit.
At the end, both trading apps are much welcomed into the investment industry because they offer investors the opportunity to save on stock trading fees and build up a large portfolio in an automated fashion.
If you want to buy and sell stocks, ETFS, and trade options then go with Robinhood.
If you want to buy fractional shares in your favorite companies or save for retirement, then go with Stash Invest.
Tarik Pierce is the founder of InvestorTrip.com and regularly contributes articles to this website.
While living overseas, he uses PureVPN for a low cost VPN service.
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While his background is mostly related to trading stocks, he recently gained interest in real estate crowdfunding with Fundrise.