Ally Invest vs. Robinhood: Head-to-Head Comparison

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Ally Invest vs. Robinhood

Whether you want to get started investing or are an experienced trader, it’s common to be on the lookout for ways to save on fees. While it’s a good thing that there are plenty of low-cost stock trading platforms, this makes choosing one a little overwhelming at times.

Two of the most popular online brokerages are Ally Invest and Robinhood. Both could save you money on your trading fees, plus they also have some impressive features. However, there are some key differences between the two platforms.

Here, we’ll make a detailed Ally Invest vs Robinhood comparison to help you choose the best platform for your needs.

Ally Invest vs. Robinhood Overview

The main difference between Ally Invest and Robinhood involves the investment options and account types available to the investor. Robinhood is a streamlined platform that prioritizes ease of use and simplicity. While that’s great for usability, the tradeoff is a lack of options.

For example, Ally Invest offers mutual funds, CDs, bonds, and robo advisor functionality. None of those are offered by Robinhood. In terms of account types, Ally Invest offers individual accounts, joint accounts, taxable accounts, retirement accounts (Roth and Traditional IRAs), and custodial accounts. Currently, Robinhood only offers an individual taxable brokerage account.

If you’re looking for a simple way to trade stocks and ETFs, Robinhood could be an excellent choice. But if you’re looking for a full-service brokerage, Ally Invest is a more suitable option.

The Ally Invest Basics

Ally Invest

Ally Bank began operations in 2009 as a way to streamline banking services and increase accessibility. However, over the years, Ally has expanded its product line and now offers a full range of investment options through Ally Invest.

Ally Invest has already established a reputation for being an excellent trading platform. This includes analysis features and specialized tools that can help you to build your portfolio.

And for fee-conscious investors, Ally Invest has low or no account fees with zero commission on stocks and ETFs. However, you can still access dynamic profitability graphs, probability calculators, and comprehensive research options.

This makes Ally Invest a solid choice for new investors or more experienced traders.

The Robinhood Basics

Robinhood

Robinhood is considered to be the major disruptive force in the brokerage industry that pushed established brokerages to reassess their fee structures. It was one of the first platforms to offer commission-free trading, which gave it a huge edge over the competition.

Since it began operating, many brokerages and platforms have eliminated their commissions, which has neutralized Robinhood’s competitive edge somewhat. However, Robinhood has established strong brand recognition and has created a niche market for investors who appreciate using a clean, intuitive platform that focuses on the basics.

Robinhood has some nice features including cash management services and a recurring investment feature that have helped it attract new customers while strengthening its relationship with its existing customer base.

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Robinhood offers commission-free trades of stocks, ETFs, options, and cryptocurrency. There are no account minimums and you can buy fractional shares for as little as $1. Right now you can get a free stock just for creating an account through the button below.

Features:
  • Commission-free trades
  • No account minimums
  • Buy fractional shares for as little as $1
  • User-friendly platform
  • Invest in cryptocurrencies like Bitcoin and Ethereum

In fact, it’s the growth over recent years that brought Robinhood some negative attention. The platform has received some criticism for untimely outages and intentional trade restrictions which led to suspicions of a conflict of interest.

In 2021, Robinhood agreed to a $70 million settlement for the regulatory investigations, which led many traders to look for Robinhood alternatives. However, Robinhood remains a popular platform for those who appreciate its low-cost strategy and trading features.

Related reading: How to Get Free Stock

Investment Options

Ally Invest has an impressive variety of investment possibilities for any investor including options trading, ETFs, mutual funds, and fixed income products such as CDs and bonds. There’s also a separate dedicated foreign exchange trading platform that provides access to over fifty currency pairs. However, there are no cryptocurrencies (Robinhood offers trading of the most popular cryptocurrencies) and you cannot trade in futures or fractional shares.

With Robinhood, you can invest in stocks, options, and ETFs, as well as cryptocurrency. Robinhood crypto includes popular coins such as Bitcoin, Litecoin, Dogecoin, and Ethereum.

Another positive of Robinhood is that it does offer fractional shares. This is a great feature for those who want to access high-end stocks or have a limited investment fund and still want to diversify. Fractional share orders are available for stocks over $1 per share with a $25 million or greater market capitalization.

Account Types

Ally Invest is a full-featured broker, so it offers practically any type of investing account you may want. There are standard taxable brokerage accounts that you can also open with another owner (joint accounts), retirement accounts, custodial accounts, and even robo advisory accounts.

Since Ally Invest is part of Ally, you can also open a savings account, checking account, CD, and access lending products. This makes it ideal if you want to keep all your finances under one roof.

On the other hand, Robinhood has been designed for simplicity. It only offers a standard individual taxable brokerage account. It’s possible to upgrade your account to Robinhood Gold. This is for more serious traders as you can access a margin account, but this does add a monthly subscription fee to your trading costs.

How the Platforms Work

Ally Invest has a fully functioning platform that has all the features an investor would expect. However, in some areas, it does feel a little dated.

The home screen shows all your Ally platform accounts in one location, including your bank accounts, loans, and managed accounts. You can then click on the link to launch Ally Invest Live.

The platform does have a responsive feel, with quickly refreshing pages and easy-to-find streaming quotes. There are intuitive menus and easy-to-navigate sub-menus. You can alter the look of the dashboard with a few customization options, and while there is a mobile app, the main functions and features are found on the primary desktop platform.

As we touched on above, Robinhood has been designed for simplicity. The layout is easy to follow, making it quick to set up your account and intuitive to make your trades. You can also organize stocks by category or sector, which makes it easier to find the companies you want to invest in.

While Robinhood may lack the customization of Ally, you should find everything you need to get trading on the stock market.

Mobile Apps

Ally Invest has a mobile app for iOS and Android. This makes it possible to access extended hours of trading, and you can still trade in stocks, ETFs, and options. There are graph styles, horizontal chart features, timeframes, and technical studies that all work well on the mobile platform. Other great features of the investment app include mobile check deposits, bill pay, and Zelle transfers.

As Robinhood was originally launched only as a mobile app, it’s to be expected that its mobile trading platform is smooth. As with the Robinhood website, you can see watchlists and trade on the Robinhood app. You can also access ongoing news feeds and receive customizable alerts.

Related reading: The Best Investment Apps

Fees

Ally Invest has a slightly complicated fee structure. Although there are no commissions on stock, ETF, and foreign exchange trading, there are fees you may encounter. These include:

  • Options Fees: $0.50 per contract and a $0.50 fee when positions of low-value options are closed.
  • No Load Mutual Fund Trades: $9.95.
  • OTCBB Charges: $4.95 and $0.01 per share. Maximum commission set at 5% of the total trade value per order.
  • Live Broker Assist Trades: $20.
  • Robo Managed Accounts: Minimum $100 investment and no management fee applies if 30% or more is allocated to cash with an enhanced portfolio. However, there is a 0.30% annual management fee to cover robo-managed portfolios that do not carry a 30%+ cash balance.

Robinhood’s fee structure is a little easier to understand. There are no account maintenance, inactivity, or wire fees, There is also no commission on equity and options trades.

If you want to trade on margin, you will need a Robinhood Gold subscription, which costs $5 per month. This does include $1,000 of margin, and above this level, the margin is charged at just 2.5% interest.

Research

Ally Invest has a comprehensive selection of research and data tools. This includes valuations, price performance exchanges, fundamentals, and filtering which can be applied to your stock screener.

There’s also access to fundamental information including FactSet analysis ratings, accounting ratios, earnings per share, and dividends.

Ally Invest also has some good charting options, but these are limited if you’re using the mobile app. If you’re on the website, you’ll find the charting offers comparisons, customized timeframes, and more.

Finally, Ally Invest has a built-in strategy builder which allows backtesting.

Although Robinhood has been designed for simplicity, it has a nice selection of research offerings. In recent years, Robinhood has increased its research and tools, so you can now use analyst ratings, links to earning calls, earnings calendars, and even lists of top movers.

You can also benefit from candlestick charts, and information from Robinhood customers is resurfaced to create its own data universe.

Robinhood also has some excellent data sources including Wall Street Journal Markets, Barron’s, CNBC Business, Reuters, and Nasdaq.

Platform Advantages

If you’re still unsure which is best in the Ally Invest vs Robinhood comparison, it’s important to look at where each platform shines.

Ally Invest Advantages 

  • Linked to Ally Bank: Ally Invest is part of Ally Bank, which provides some excellent banking products. You cannot only access competitive minimum investments, fees, and commissions, but also savings, checking accounts, and lending products. This is a great advantage if you want to streamline your finances and keep everything at one place.
  • Account Integration: The Ally Invest self-directed accounts easily integrate with other Ally financial products. This allows you to obtain a snapshot of your finances.
  • Wide Variety of Accounts: Ally Invest has a number of account types including individual and joint taxable investment accounts, retirement accounts, and custodial accounts.
  • Commission Free Foreign Exchange Trading: Ally Invest has a dedicated foreign exchange trading platform with over 52 currency pairs.
  • Lots of investment options: While Robinhood offers stocks, ETFs, and options, Ally Invest also offers mutual funds, CDs, bonds, and international investments.
  • Robo advisor: If you’re looking for a hands-off or automated approach to investing, Ally Invest offers robo advisory services with a minimum investment of $100.
  • Interest on Cash in Investment Accounts: Many traders hold cash in their accounts as they wait on their next trade or have funds remaining after purchasing a specific number of shares. However, with this platform, you can earn a variable interest rate on the cash balance in your investment account up to $250,000.

Robinhood Advantages:

  • Access to Cryptocurrencies: A distinct advantage for Robinhood over Ally Invest is that you can trade in cryptocurrencies. This has become a popular investment choice for diversification.
  • Fractional Shares: Robinhood facilitates fractional share trading. This is a massive plus if you want to invest in high-value companies and either don’t have thousands of dollars to invest or want to keep your portfolio diverse.
  • News Notifications: Robinhood allows you to set notifications, so you can keep track of earnings, stock news, and other information about items in your portfolio and watch list on the go.
  • Simple Fee Structure: Robinhood made its name on low-fee trading and it has maintained this approach with a very simple fee structure. This makes it easy to understand exactly what charges will apply to your trades.
  • Low-Cost Margin: While you will need to upgrade to Robinhood Gold for $5 per month, this does include $1,000 of margin, with higher amounts available at 2.5%.

Ally Invest vs. Robinhood: Final Thoughts

If you’re new to trading, Ally Invest can be a great option to open a variety of accounts. More experienced traders will appreciate the different asset classes. You can also integrate your regular banking activities with Ally Bank savings, checking, and loan accounts.

Ally offers excellent guidance for newb investors and a greater choice of account types. If you want to save for retirement, you want a managed portfolio, or need personal recommendations, Ally Invest is a great platform

If you prefer simplicity, Robinhood offers a no-frills approach. You’ll need to be prepared for less help. While the trading platform is intuitive and easy to use, there’s little guidance as you’ll be working solely with a self-directed portfolio.

However, you can access cryptocurrencies and fractional shares, which can help even those with a modest fund keep their portfolio diverse.

So, you’ll need to think carefully about what you’re looking for in a platform. Both of these platforms hold appeal for new and advanced traders, but there are some crucial differences in the Ally Invest vs. Robinhood comparison.

If you’re independent and have the confidence to go it alone, the simple fee structure and clean platform layout of Robinhood is likely to appeal. On the other hand, if you need more guidance and want to integrate your everyday banking, Ally Invest does have some great options.

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