Robinhood vs Vanguard 2024

Introduction to Robinhood

The key thing to understand in our Robinhood review  – and a crucial point to understand the full context of our Robinhood vs Vanguard comparison – is that they’re not meant to be for everyone. Actually, that’s one of the things these providers have in common and something that makes our Vanguard vs Robinhood analysis so interesting.

When wondering whether Vanguard or Robinhood is right for you, consider how enticing you find the idea of a beautifully designed app aimed at non financial experts looking to get into the world of trading – because that’s exactly what Robinhood offers. If you ask us, they do an incredibly good job. They explain themselves well, are technically as close to flawless as you could hope, and manage to trim away all the complexities to leave a newcomer with what they need without bogging them down with too much confusion.

Introduction to Vanguard

The reason that Vanguard won’t be for everyone is very different to Robinhood. Rest assured, choosing Vanguard or Robinhood gets you a very different investment experience. We certainly aren’t going to bore you by comparing carbon copies here.

Vanguard have 40 years of experience in the world of investment and in that time, they have also gained a reputation as the premier option for low-cost long-term investments, with special attention paid for those looking towards retirement. They’ve been around for so long because they do an amazing job. Now, with an easy to use mobile app, they make the services, guidance and expertise they have always provided that much easier.

Robinhood vs Vanguard: Usability, Look & Feel

One thing we find really interesting when it comes to this part of our Robinhood vs Vanguard comparison is how their design reflects their different demographics. Not only do they target audiences who want different things – despite the many similarities, there are noticeable differences – but we also believe Robinhood is stylistically aimed at a younger demographic as well. This is reflected by its cutting-edge phone apps, which many consider to be among the absolute best in the industry.

They’re astoundingly easy to use but despite that, are clearly built for people who are used to modern technology. Importantly, it operates at a fast pace. Vanguard, however, takes its time a little more and has a more classical style, which well reflects their long-standing tenure in the industry. We’re sure that if you timed how long it took people to get started in this Robinhood vs Vanguard contest, there would be a significant difference, despite them both being quite straightforward.

However, as we’ll get to in the spread section of our Vanguard vs Robinhood review, this is to be expected considering their type of appeal. Their mobile app is also simple to use, with navigating buying and selling all being nice and straightforward. All those vital elements, like account and personal information, are all easy to find whether you end up going with Vanguard or Robinhood.

Robinhood vs Vanguard: Payments

The last part of our Vanguard vs Robinhood comparison saw a huge stylistic contrast but when it comes to your payment options, there’s an awful lot more in common than you may expect. As we have discussed previously – and indeed in similar comparisons like Robinhood vs Etrade and Robinhood vs Acorns – they work by linking accounts. This is similar to how you can move money through an electronic bank transfer or wire transfer.

Neither is breaking new ground in terms of payment options. With that said, they’re tried, trusted and ultimately, they work really well. They also have a $0 account minimum policy in common too – although you’ll need to opt for paperless communications with Vanguard to enjoy a free account. Robinhood does have the option of providing their own debit card and some additional options with their cash management scheme. However, there is a waiting list for this, so we don’t think it’s fair to consider it too much in our Robinhood vs Vanguard analysis.

They also offer instant deposits up to $1000 for basic users, and up to $50,000 a day. In terms of minimum investment amounts for Vanguard, you typically need at least $3,000 to buy most Vanguard mutual funds – although this will often vary depending on which funds you choose to invest in.

Transfers can also take up to 30 days as opposed to the five that’s usual for Robinhood, but this is down to the different kinds of investments on offer. Remember that Betterment vs Robinhood largely comes down to what you’re after.

Robinhood vs Vanguard: Customer Service

Despite offering quite different investment perspectives, good customer service is something any kind of company should strive for. This is true whether we’re talking about Webull vs Robinhood or eToro vs Robinhood, for instance.

They both have an education first perspective. Obviously, Vanguard’s model is all about low cost long-term investment and getting your head around this is absolutely vital. Therefore, the educational resources they provide are vast, so you know exactly what you’re getting into. Robinhood is similar in the sense they also highly value educating their users.

We’ve said it before and we’ll say it again, Robinhood’s Help section is one of the best in the business. That, alongside their back to basics streamlined product, means their actual customer service contact methods of email and social media will likely be rarely needed. This shows that, although the principle of great customer service is common, their priorities are different, as the latter also offers a phone service throughout the week.

Robinhood vs Vanguard: License & Security

Talking about license and security is often the great equaliser in comparisons like Vanguard vs Robinhood. The fact is that, whether you go with Vanguard or Robinhood, this is a necessity you cannot compromise on.

Thankfully, you won’t have to. We’re happy to say that whether it’s Vanguard or Robinhood, you’ll be safe in the knowledge that both are members of FINRA. This is a regulatory body for financial companies in the United States, and essentially means both providers are under strict regulation. So, there’s no difference there in this part of our Robinhood vs Vanguard comparison. Similarly, they’re both members of the SIPC, which provides insurance on invested funds.

There’s more in common too as we move on with our Vanguard vs Robinhood analysis, as they both utilise biometric recognition. This means you can log into the mobile apps with your face or fingerprint. In addition, both utilise encryption. These are examples of efforts to keep your data, accounts and money secure. Finally, you’ll also need to provide information to verify your accounts, which not only prevents fraudsters from accessing your details, but also protects any minors from using the platforms. Vanguard or Robinhood, this is great stuff all round.

Robinhood vs Vanguard: Spread

This is where we really get into the crux of the differences between them. The Vanguard vs Robinhood comparison certainly has a fair few similarities – and many of them are very good ones – but they do have distinct differences. A lot of this is down to how they market themselves as much as what they offer. We mentioned during the design section of our Robinhood vs Vanguard review that they’re clearly targeting different audiences, and this is reinforced by the educational material too.

Robinhood, for instance, is an active trading platform made as easy as possible. However, it’s still an active trading platform. It moves at a fast pace in many instances. Vanguard, on the other hand, has become synonymous over its 40 years in the industry with its low cost, buy and hold philosophy. That doesn’t mean this is all that it offers, but so much of what they do is centered around that. This does mean that people who like to get involved may struggle to find, for instance, the streaming data they need.

The bottom line of the tradable securities between these two are actually pretty similar, including Stocks, Bonds and ETFs. There’s some differences though, as Robinhood offers cryptocurrencies, while Vanguard has thousands of no transaction fee mutual funds. These different to pertain to those aims and philosophies. We would say though, that bigger than the difference in the spread of options between Robinhood vs Vanguard is the difference in how that spread is presented and optimised.

Conclusion: Is Robinhood better or Vanguard?

This Vanguard vs Robinhood review is probably one of the most interesting comparisons we’ve ever done. While it’s pretty much inevitable that we uncover more differences when we do these kinds of analysis, there’s usually something fundamental that hits you in the face in terms of what’s actually being offered. It could be an expert trading platform against a completely passive pre-decided set of ETFs, for example.

Here though, the differences are subtle. You can tell they have different goals from their design. Both are excellent, but there’s a distinction pretty much immediately. Really though, it’s when you get into what these platforms say and the educational material in particular where the stark Robinhood vs Vanguard differences come to light. They have entirely different philosophies, and even a different pace to how their kinds of investments work.

Nonetheless, they both have some similar appeals. Robinhood and Vanguard both have the potential to be very low cost and both are aimed at non-experts. It’s the long-term strategy of Vanguard which really sets them apart – and it’s a good strategy. It works for a lot of people, but if you’re a more active newcomer, then Robinhood may be the better choice for you.

The truth is that whether Vanguard or Robinhood is right for you often comes down to how long-term you want your investment to be to an extent. We think that’s a really interesting distinction you should consider when deciding your Robinhood or Vanguard winner.

Take a look at the rest of our trading guides at Best Broker Reviews – such as our best online broker for futures and online gold broker in USA guides.

Vanguard vs Robinhood – FAQ