Deep Discount Brokers: Capital One vs. Robinhood

By Jordan

When you're ready to make an investment, you'll need to open a brokerage account to place a trade. Online discount brokers like Capital One and Robinhood open up the world of investing to individual investors, bringing Wall Street to your computer or mobile device.

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Here's how Capital One and Robinhood compare in relevant categories for the individual investor.

Trading costs and commissions

Below, we've compared each broker's published commission prices by type of investment.

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Source: Company websites.

There's more you should know about each broker's commission price schedule.Robinhood doesn't charge commission on trades, but it only allows for investors to buy stocks and ETFs. It doesn't currently offer the ability to trade options or mutual funds.

Capital One has some low-cost options. Its sharebuilder service allows you to buy stocks for as little as $3.95 per trade. Its PortfolioBuilder service can be used to buy a complete portfolio of multiple stocks, ETFs, and funds for as little as $18.95.

Your actual trading costs can also be reduced by special offers. Check out some special offers for traditional brokerage accounts and IRA accounts to see if you qualify for some perks that include cash bonuses and free trades just for opening an account.

Commission-free ETFs and NTF Funds

Not all trades require that you pay a commission. Commission-free ETFs and no-transaction-fee (NTF) mutual funds can be bought and sold without paying a fee to your brokerage. Here's how Capital One and Robinhood compare on commission-free choices.

Source: Company websites.

Each broker wins a column here. Robinhood's free trades on all ETFs easily tops Capital One's nonexistent commission-free ETF list, but Capital One's mutual fund access sweeps Robinhood, which doesn't offer the ability to invest in mutual funds. Depending on your needs, you could make the case for either brokerage being better for you.

Account minimums

You don't have to be super wealthy to be an investor. In fact, both Robinhood and Capital One are no-minimum stock brokerages, meaning that you can open an account with the spare change in your pocket.

Practically speaking, it may be advantageous to start with more than the bare minimum. While neither broker has a minimum requirement for initial deposits, you'll want to have enough money to buy shares of a stock, ETF, or mutual fund in order to actually make your first investment. Shares of most investments trade for more than just pocket change.

You can trade on your phone with mobile apps from Robinhood or Capital One. Image source: Getty Images.

Trading platform

We believe that preference for a trading platform is usually based on personal opinion and an individual's personal strategy. As buy-and-hold investors, we at The Motley Fool don't really care about what a trading platform looks like, or how many charts we can load on a screen. For us, it's all about whether or not we can make a trade, and frankly, any broker can do that.

Much like the perennial debate over Mac vs. Windows, personal preference is usually the driving factor behind a preference for a trading platform. With that in mind, we'd encourage you to take any broker's platform for a test drive if a platform is of particular importance to you.

We'll point out that Robinhood is only available on mobile devices (phones, tablets, etc.), whereas Capital One is available on mobile devices and desktop or laptop computers.

International stocks and ADRs

Most online brokers allow you to invest in foreign companies with some limitations. Below, we've compared the foreign investment opportunities available as a client of Capital One or Robinhood

Source: Company websites.

Capital One clients can freely trade ADRs. Robinhood does not currently offer trading in over-the-counter (OTC) stocks, which includes many ADRs. It specifically limits trading to companies domiciled in Canada and Israel that trade above $5 per share and are listed in the United States.

Neither broker allows for trading in international stocks on foreign stock exchanges, however. This may be more or less important, depending on whether or not you want to invest in companies domiciled outside the United States.

Research quality and tools

As a general rule, we tend to think that having access to research can be a good perk of opening a brokerage account. Besides, most research is available for free just for having an account, so it won't necessarily cost you if you don't make use of it.

Capital One provides some screening tools, in addition to Morningstar data that powers its research library. It also offers heat maps, alerts, and other features to help you stay on top of your portfolio.Robinhood doesn't currently offer research to its clients, which is one of the trade-offs to its no-commission business model.

Mobile app

As long as you can connect to the internet with your phone or tablet, you can make a trade through mobile trading apps provided by Capital One or Robinhood. Here's how each broker's users and clients rated their iOS and Android apps (as of 12/15/2016).

Source: Relevant app stores.

Best choice for you: Capital One or Robinhood?

Depending on your needs, you could make the case for either brokerage. On one hand, Robinhood's commission-free model may be preferable to investors who are just starting out, as well as investors who are especially price sensitive. Capital One charges commissions, but it offers access to investments that Robinhood does not, including more foreign companies, options, and mutual funds.

To be clear: The Motley Fool does not endorse any particular broker, but we can help you shop around. Visit's Broker Center to quickly compare leading brokerages and special offers. If a retirement account is what you're looking for, the IRA Center compares brokerages on their features specific to retirement accounts.

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