Personal Finance Insider writes about products, strategies, and tips to help you make smart decisions with your money. We may receive a small commission from our partners, like American Express, but our reporting and recommendations are always independent and objective.
Robinhood vs. Coinbase: The biggest differences
Robinhood and Coinbase are both popular online investment platforms offering a vast range of investment choices for active traders. Both investment apps let you trade multiple cryptocurrencies like bitcoin, ethereum, dogecoin, and more.
But the platforms each have evident differences that you should consider before signing up. Robinhood is ideal for traders looking for exposure to multiple asset types (it offers stocks, ETFs, options, cryptocurrencies, and ADRs). Coinbase, on the other hand, is a better option for traders in search of trading features specific to cryptocurrencies.
Robinhood and Coinbase’s account features and fees also vary. Keep reading to see how the investment platforms compare.
Robinhood pros and cons
Robinhood is an
offering commission-free trading on stocks, ETFs, options, and cryptocurrencies. In addition to its lack of minimum account size requirements, Robinhood also offers Robinhood Gold (for margin trading and more advanced users), cash management perks, fractional shares, and American depositary receipts (ADRs).
Compared to Coinbase, Robinhood is the best option for traders who want to merge traditional investments (e.g., stocks, ETFs, and options) and cryptocurrencies under the same umbrella. Though Robinhood has a much smaller crypto selection than Coinbase, it does offer a wider variety of investment choices.
But unlike Coinbase, Robinhood doesn’t offer institutional crypto exchange services (for businesses), nor does it let you transfer crypto assets into or out of your account (i.e., you won’t be able to make coin withdrawals or send any crypto assets to other wallets or users).
You’ll need at least $1 to trade fractional shares, and unlike many online brokerages, Robinhood charges $0 for options contracts (most brokerages charge $0.65 per options contract).
Then there’s Robinhood Gold. The Robinhood Gold account has a $5 monthly fee, but it lets you trade on margin at a 2.5% annual rate. The account also gives you access to professional market data, larger instant deposits (these can range from $5,000 to $50,000), and Morningstar professional research reports on roughly 1,700 stocks.
As for its cash management services, Robinhood gives you a customizable debit card, a 0.30% interest rate on uninvested cash, and access to 75,000 ATMs.
Coinbase pros and cons
Founded in 2012, Coinbase is a global cryptocurrency exchange serving individual and institutional investors. The platform provides a wide range of services, including crypto exchange services, digital storage, crypto rewards, staking, and more.
Retail traders can choose between two different accounts — the Coinbase standard account or Coinbase Pro — when exchanging cryptocurrencies. The standard account only offers things like trading, crypto rewards, interest rewards, digital storage, and mobile access. With the Coinbase Pro account, however, you can take advantage of more advanced features like trading APIs, order books, and charting tools. Coinbase Pro also offers FDIC insurance up to $250,000.
Unlike Robinhood (which only lets you trade a handful of crypto assets), Coinbase gives you access to over 80 cryptocurrencies. In addition, if you’re big on crypto rewards or staking (staking is a process that lets you earn interest from holding certain cryptocurrencies over a set period of time), Coinbase could be ideal for you.
The exchange’s Coinbase Earn feature pays you in crypto for learning about different crypto assets (see more here). Plus, with staking, you can earn up to a 5.0% APY for holding different assets. Coinbase requires at least $1 to stake, and it lets you stake the following crypto assets: ethereum, algorand, cosmos, tezos, dai, and usd coin.
Institutional traders can take advantage of the Coinbase Prime trading platform, offline storage for crypto assets, commerce services, ventures fundraising services for new crypto companies, and more.
Robinhood vs. Coinbase: Which is right for you?
Robinhood and Coinbase both offer a variety of investment options. But the biggest differences to pay attention to are fees, investment choices, and crypto features.
While Robinhood offers a small selection of commission-free cryptocurrencies, it’s not the best option for traders who want access to a wider range of crypto assets. In addition, Robinhood doesn’t offer services for institutional traders (as opposed to individuals) like Coinbase does, nor does it allow you to transfer crypto assets.
Coinbase, on the other hand, has higher fees, but it lets you exchange a much larger selection of cryptocurrencies. It also offers crypto rewards as educational incentive to learn about different assets, and you can stake coins to earn regular interest.
Overall, Robinhood is the best choice for those looking for the best of both worlds with trading for crypto, stocks, ETFs, and options. However, Coinbase is the best option for crypto-focused traders.