Public vs. Robinhood: Is Public a Good Alternative Investing App?
SustainFi Updated January 10th, 2022
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At a glance
- Both Public and Robinhood are super-sleek, beginner-friendly investing apps with access to stocks, ETFs, options, crypto, and fractional shares. Neither charges commissions on stocks and ETFs. There are no minimumes, either. However, they are not 100% the same.
- Best for crypto and trading with a social component: Public. Public lets you connect with and follow other investors. It offers thematic investing and a choice of 25 cryptos. And, unlike Robinhod, Public doesn’t take Payment For Order Flow.
- Best for options and margin loans: Robinhood. Robinhood lets you trade options and get margin loans, so it targets more risk-loving investors than Public.
Keep reading to learn more.
Pick from 5,000 stocks and ETFs
Pick from 9,000+ stocks, ETFs
Takes payment for order flow?
Takes payment for order flow?
What is the Public.com app?
Public is a free social trading app and an investing social network. Formerly known as Matador, the app launched in 2019 to make investing easily accessible to everyone. With Public, you can:
- Follow your friends or popular influencers and share your ideas
- Invest in fractional shares (“slices”) of stocks and ETFs
- Invest in thematic stocks and funds
- Invest in crypto and hold it in the same app as your stock portfolio
Historically, many groups of investors missed out on the market’s returns, and Public’s goal is to correct that by making investing easy. The app has a user-friendly interface and has already surpassed 1 million users despite being launched only two years ago. Public is also inclusive: according to CEO Jannick Malling, 40% of investors are women, and 45% are minorities.
Public’s backers include Will Smith, Professor Scott Galloway, Girlboss founder Sophia Amoruso, and skateboarding legend Tony Hawk. You can follow various celebrities on the app and see how they invest.
All users on the platform are verified, and the overall vibe is supportive. By verifying all the users, Public avoids the less savory aspects and the anonymity of some popular Reddit boards.
Public is committed to helping you invest rather than day trade or speculate in the short term. 90% of users say that they are mostly long-term investors. As a result, Public doesn’t offer options trading. Tellingly, when you look up a stock, the button next to it says “Invest” and not “Buy.”
🔔 Read the full review of Public.
What is Robinhood?
Robinhood was one of the first commission-free apps that led to the low-cost trading revolution. After Robinhood started offering free trades, other brokers had to follow suit. Robinhood has seen a lot of success and, as of 2021, it’s a public company.
The app lets you trade over 5,000 U.S. stocks and funds, options on them, and 650 global stocks (ADRs). You can buy fractions of shares, a good solution if buying the entire share is more than what you would like to spend. Robinhood also lets you invest in crypto.
With instant deposits, you can start trading as soon as you deposit money, without having to wait for the transfer to clear. The interface of the app is great to boot.
However, Robinhood doesn’t support trading foreign-domiciled stocks, mutual funds, and some over-the-counter stocks. The app has also come under fire for making investing look like a game and potentially encouraging risky trading. And it experienced a backlash when it stopped letting investors buy GameStop (GME) at the height of the pandemic, which Public didn’t do.
Trading is free because Robinhood accepts Payment For Order Flow (PFOF), a controversial practice. Effectively, Robinhood is being paid by market-making firms to process your trades. Your trades are the product they sell, which is how you get to trade for free. There is a debate whether PFOF means you get worse execution. Public doesn’t accept payment for order flow, but they allow optional tipping.
Public vs. Robinhood: Account types
Both Public and Robinhood only let you invest with a taxable investment account. Neither app supports retirement accounts, custodial accounts, or trusts.
Public vs. Robinhood: Minimum investment
Neither app requires a minimum to open an account.
💰 The winner: Tie.
Public vs. Robinhood: Commissions and fees
Public is free. The app makes money from optional tipping, lending your shares, interest on the cash in your account, and 1-2% markups on crypto trades. Crypto markups mean that if you pay $100 for crypto, you get slightly less than $100 worth of coin.
Robinhood is also free unless you sign up for the Gold membership, which costs $5 a month. The Gold membership gets you $5,000-$50,000 in instant deposits (based on how much you have in your account) and margin loans with a 2.5% interest. You can also access research from Morningstar and advanced market data from NASDAQ. In addition to charging for Gold memberships, Robinhood makes money on selling your trades to market makers for execution (Payment For Order Flow), margin loan interest, interest on uninvested cash, and interchange fees on debit cards.
💰 The winner: Tie. Trades in stocks and ETFs are free on both platforms, though Robinhood takes PFOF and Public does not. Unlike Public, Robinhood doesn’t charge a markup on crypto trades. However, it takes PFOF from crypto market makers, too, which could potentially result in worse execution quality. (It remains controversial whether PFOF leads to worse execution quality or not.)
Public vs. Robinhood: Stocks and fractional shares
Public lets you choose from 9,000+ stocks and funds, while Robinhood offers 5,000+ stocks and funds.
Both apps offer fractional shares. Fractional shares allow you to buy a piece of a share if buying the entire thing is more than you would like to spend. For example, one share of Tesla (TSLA) costs $1,000, but if you only want to spend $100, you can buy 1/10 of that share. Buying fractions of shares limits how much cash is sitting in your account unspent.
💰 The winner: Public.
Public vs. Robinhood: Crypto
Public supports 25 cryptos, including:
- Bitcoin (BTC)
- Ether (ETH)
- Cardano (ADA)
- Dogecoin (DOGE)
- Litecoin (LTC)
- Bitcoin Cash (BCH)
- Shiba Inu ($SHIB)
- Stellar (XLM)
- Ethereum Classic (ETC)
- Dash (DASH)
- Zcash (ZEC)
As of January 2022, Robinhood offered the following seven coins:
- Ethereum classic
- Bitcoin cash
- Bitcoin SV
💰 The winner: Public.
Public vs. Robinhood: Banking and cash management
Public doesn’t have any banking options, and you don’t earn interest on any uninvested cash in your account.
Robinhood lets you earn interest on the idle cash sitting in your account. They currently pay a reasonably attractive 0.30% APY. There are no monthly fees and no balances. You also get an (optional) debit card that gives you access to 75,000 ATMs through the Allpoint and Moneypass networks.
Public vs. Robinhood: Sustainable investing options
Unlike Robinhood, Public lets you explore sustainable thematic investments. The app helps you find green or socially responsible stocks and funds easily by grouping them into themes. As of January 2022, they featured the following themes:
- Green Power: these energy companies produce power through sustainable and renewable means
- Women in Charge: public companies led by female CEOs
- Diverse Leadership: companies that are setting the bar when it comes to diversity and inclusion
- Plant-Based Movement: companies innovating & investing in plant-based food for a better-tasting and greener future
- Reuse and Reduce: companies converting waste materials into new materials and objects
- Combat Carbon: companies actively working towards reducing their carbon footprint
- Immigrant Founders: U.S.-based companies that were founded by immigrants
- Water Works: companies responsible for supplying and purifying drinking water
For example, if you select the “Green Power” theme, the app will suggest a list of stocks like Tesla (TSLA) and NextEra Energy (NEE) and ETFs, such as the Invesco Solar ETF (TAN). This makes thematic stocks and funds easy to find.
💰 The winner: Public.
Public vs. Robinhood: Margin lending
Margin investing is when you borrow against your investment account to make more investments or for any other reason. If you are using margin loans to increase your buying power, your portfolio becomes riskier.
Public doesn’t offer margin loans.
Robinhood gives margin loans to Robinhood Gold members only. Before you can get a loan, you need to apply for eligibility. The first $1,000 is included in your monthly $5 fee, but to borrow more you need to pay 2.5% in annual interest.
💰 The winner: Robinhood. If you are looking for even lower rates, check out M1 Finance Borrow.
💰 The Overall Winner
Both Robinhood and Public charge no commissions and let you invest in stocks, cryptos, ETFs, and fractional shares. However, they don’t offer accounts other than individual investment accounts or let you buy mutual funds, bonds, or forex.
Best for crypto and investing with a social twist: Public. Public is great for investors who want to follow other investors’ trading activity. The app doesn’t take Payment For Order Flow, either. It offers:
- Social investing
- 9,000+ funds and stocks to invest in
- 25 cryptos
- Thematic investments
Best for investors who need access to options and margin loans: Robinhood. All in, Robinhood wins for:
- Margin loans
- Cash management accounts which pay interest
🔔 Looking to compare more options? Check out this list of the top 10 investing apps.