Ally Invest vs Robinhood: Which Is Better?

When looking for an online trading platform, many investors seek out a low-cost service that will not eat away at their earnings. It is one of the reasons why Ally Invest and Robinhood, with their commission-free trading, are two of the top services today. However, these two services are structured in very different ways. Ally Invest is just one part of a bigger financial platform and thus has more to its design. By contrast, Robinhood is a singular and simplified trading service specializing in quick trades. While both platforms may be tempting options for investing, it is important to weigh the benefits and disadvantages between Ally Invest vs. Robinhood so you can determine which one is the right choice for you.

Consider talking to a financial advisor about the best way to structure your portfolio so you can maximize your earnings.

Overview of Ally Invest vs. Robinhood

Ally Invest is part of a bigger financial organization called Ally Financial. Under this umbrella, Ally offers its customers the ability to buy or refinance a home while also offering banking services like online savings accounts.

With an Ally account, investors can access the following products.

With these added services, the two platforms are quite similar..

When comparing Ally Invest vs. Robinhood, they are both low-fee trading platforms for investors looking to minimize their fees. They also offer a generous suite of products..

Although Robinhood’s concentration used to strictly be on investments and trading, that is not the case anymore, with several additional services available.

Stocks and ETFs
Bonds
Options
Futures
Crypto
IRAs
- Roth IRA
- Traditional IRA
Rewards credit card
Private banking (for high-net-worth individuals)

Additionally, the Robinhood app is a welcome breath of fresh air with its sleek interface and minimal barriers, making it appropriate for experienced and beginner investors alike.

When choosing between Ally Invest vs. Robinhood, the best platform for you will likely depend more on your experience level and preferred investment strategies.

Ally Invest vs. Robinhood: Fees

While it was common in the past for brokerages to have trading and commission fees in place, many have now eliminated these charges. Robinhood has been cited as a leader in this movement, although Ally Invest also now serves as a free trading platform for certain investments.

Both services have no commission on stocks, exchange-traded funds, (ETFs) and options. However, Ally requires $100 to open a brokerage account, while Robinhood only requires $1 to begin trading.

Robinhood also offers its Robinhood Gold for $5 each month, giving you access to advanced research, instant transfers and margin trading (with a $2,000 minimum).

While Ally Invest does not charge fees on a number of trades, there are a few others to keep in mind. The investment platform offers both self-directed accounts and automated accounts, for example. Although self-directed portfolios do not have a minimum, automated accounts require at least $100. You will also generally run into $0.50 per options contract and $1 per bond.

Ally Invest vs. Robinhood: Services & Features

An investor using their smartphone to check their investment account.

Between Ally Invest vs. Robinhood, Robinhood is less feature-heavy due to its streamlined nature. Its main purpose is to provide easy access to trades with a focus on day trading. For the most part, Robinhood avoids heavy analysis due to its simple design. You will find basic information, such as pricing history and basic statistics, but not much more.

If you upgrade or choose the Robinhood Gold premium account, you will have access to more advanced analysis, such as Level 2 market data and Morningstar research, for $5 a month. This version also provides margin trading with a minimum portfolio balance requirement of $2,000.

In comparison, Ally Invest offers a greater degree of services and features. To start, you have the option of either a self-directed portfolio or a managed one. This may appeal to a wider audience who prefer passive investing. While you need a $100 minimum to open an account, there are no advisory, annual or rebalancing fees.

Four portfolio types are available for self-directed accounts. For example, there is a tax-optimized portfolio, as well as a high-yield option.

The managed investment portfolios are adjusted with robo-advisory technology, and you have several research tools at your disposal. They include option chains, customizable streaming charts, profit/loss calculators and market data.

Although Ally Invest does not offer cryptocurrency, it does allow OTCBB/Pink Sheets and FOREX trading, in addition to its other services.

Ally Invest vs. Robinhood: Online and Mobile Experience

Robinhood’s focus is on a quick and easy trading experience. Its light interface does sacrifice some valuable tools that could be vital to experienced traders. However, investors can still view watchlists, create customizable alerts, receive notifications on earnings announcements and view charts.

Its app has been the source of some ire, being fined for the gamification of investing. Robinhood has also faced fines by the Financial Industry Regulatory Authority for anti-money laundering, supervisory and disclosure violations.

Ally Invest takes a different approach with its mobile app. Those who bank with Ally Financial are able to manage their accounts, while also accessing their credit card, investment and retirement accounts.. It is also relatively user-friendly and simple to navigate, although it lacks some research tools that users may miss, like real-time updates for watch lists and data.

Compared to the features that other online brokers provide, Ally Invest offers investor resources that far more limited.

Account Types and Retirement Options

The types of accounts a brokerage offers can make a big difference in determining whether it’s a good fit for short-term trading or long-term retirement planning.

Both Robinhood and Ally Invest offer IRA accounts. Investors who are also planning for retirement can choose from traditional or Roth IRAs. However, Ally Invest provides more flexibility, supporting rollover IRAs in addition to taxable brokerage accounts. This makes it easier to integrate trading with greater retirement savings strategies.

Who Should Use Ally Invest?

When you compare it to Robinhood, Ally Invest is a useful platform for a number of investors. If you are interested in more diverse products like FOREX and mutual funds, Ally is the better choice. It also may appeal to both passive and advanced traders who require less support.

However, the Ally app does not offer as much research or as many tools as other platforms. For investors looking for a wealth of resources, another platform may be better.

Ally investors should also consider the platform for its other services. You can combine banking and investing through Ally Bank, which offers checking and high-interest savings accounts. Several types of loans are also available through Synchrony (formerly Ally Lending).

Who Should Use Robinhood?

Robinhood’s selling point is its ease of use, thanks to its user-friendly design. This can be great for newer investors who are still gaining their footing.

Overall, the interface is navigable, and the few fees are appealing. For investors with experience under their belt, Robinhood serves as a convenient platform for on-the-go trading.

Bottom Line

An investor compares Ally Invest vs. Robinhood.

An investor should find an online brokerage that best supports their investment strategy and risk tolerance. Consider both your skill level and investment needs before opening a brokerage account. Although Robinhood has experienced some regulatory issues, it has committed to continued improvements. Meanwhile, Ally Invest offers a generous selection of financial products, but it lacks the tools that sophisticated traders may need to properly manage their portfolios.

To help you decide between Ally Invest vs. Robinhood, consider consulting a financial advisor who can analyze your portfolio and recommend the right investment strategy for you based on your financial goals.

Investing Tips

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