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Written by Jason Dolan on April 5, 2020
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Fundrise vs Robinhood 2020: Which Is A Better Investment?

Online investment platforms are a dime a dozen nowadays. This has made finding an investment platform that fits your needs a bit more difficult. There are also a variety of different assets you can invest in today, such as stocks, bonds, gold, real estate and even cryptocurrency!

This can easily lead to "information overload." We are here to help!

Today, we are going to be looking at two very different investing platforms. We will compare and contrast the similarities and differences between both Robinhood and Fundrise.

Robinhood is a commission free brokerage that lets you trade stocks, ETFs, crypto and options commission free.

Fundrise is a crowdfunded real estate platform that allows you to invest in private real estate deals with as little as $500.

By the end of the article, you should have a clear understanding of which platform is best for you; Fundrise vs Robinhood.

Summary: Fundrise vs Robinhood

  • Robinhood is a commission-free brokerage platform
  • It allows you to trade stocks, ETFs, crypto and options
  • Fundrise is a crowdfunded real estate investing platform
  • You invest in private real estate deals alongside other investors
  • No account minimum with Robinhood
  • $500 account minimum with Fundrise
  • Fundrise assets are considered less liquid than other investments
  • You should have a 5 year minimum time horizon with Fundrise
  • Fundrise offers a 90-day money-back guarantee
  • Robinhood offers a Free Stock at sign up
  • As far as real estate goes, Robinhood only offers publicly traded REITs
  • Non-traded REITs, like the ones Fundrise offers, tend to generate better returns

Click here to invest with Fundrise!

Sign up for Robinhood! + Get 1 Free Stock

What Is Robinhood?

Robinhood started out as the first commission-free online investment brokerages. They have zero commissions on their platform which has attracted over 6 million individual users. They are credited with changing the brokerage industry as we know it forever.

Robinhood revolutionized what it meant to be a broker-dealer in the modern world and many companies have changed their policies and practices to keep up with Robinhood. This effect on the industry has come to be known as the “Robinhood Effect."

Now, countless other brokerages have adopted this commission free investing model.

robinhood vs m1 finance review.

Robinhood’s user-friendly design targets the beginner investor and it has become one of the most popular investment platforms out there for millenials. They offer both a web service as well as a mobile app to utilize their service.

Though the company does not tailor as well to the more experienced investor or someone who wants a lot of analytics, Robinhood is still possibly the most highly recommended service out there for beginner investors.

How Does Robinhood Work?

Robinhood makes it very easy to begin investing.

Getting your account ready will take just a few minutes to complete and you can do it right from their mobile app if that’s what you prefer.

When you sign up you will need your basic info; name, address, social security number, the works. But once you have filled in all the required fields, you are good to go.

The process is made even easier with the fact that Robinhood has no account minimum. So you can open your account today with $0 if you choose to do so and fund it later on.

In addition, Robinhood offers instant verification with a lot of major banks. This means that you will be able to transfer up to $1,000 instantly. Anything over that amount will funnel in within the next few days after the initial deposit depending on your bank.

Robinhood Features

Completely Free Trades

Regardless of what you choose to invest in with Robinhood, you will never pay a dime outside of the cost of your securities.

They offer totally free trades on stocks, ETFs, options and cryptocurrencies.


Robinhood does allow you to make use of options as well as traditional stock investing. This is a feature that is not always offered at all brokerages. And of course, like other assets offered with Robinhood, it is totally free to trade.

You do, however, have to get approval in order to take advantage of these features. They require you to have some experience in stock investing before you can take the plunge into options.

Even after you have gained approval, you will not have access to all kinds of options strategies. You must complete a few options trades in order to gain access to the higher-level strategies.

Margin Lending

Investing on a margin is sometimes a controversial topic. When you invest on margin, it means that you are borrowing money in order to buy stocks. If you do want to invest on margin, Robinhood does offer this.

This is a feature that is only available through Robinhood’s premium level of service called Robinhood Gold.

The amount you are able to invest on margin is the same as the amount of cash in your Robinhood account. You get a loan dollar for dollar and pay interest on it.

The example Robinhood uses is that if you have $2,000 cash in your account you can invest up to $2,000 on margin. If you deposit another $1,000 increasing your cash account value to $3,000 your available margin will increase to $3,000.

Fractional Shares

The ability to invest in fractional shares is a really good way to make use of all your available investment funds, but a lot of brokerages don’t offer it.

Traditionally if a stock has a value of $1,000 then you must have $1,000 in order to purchase a share of that stock and invest in it.

With fractional shares offered by Robinhood, you may buy a piece of the share instead, all the way down to $1. So for a stock trading at $1,000 per share you will be able to invest a smaller amount.

This means you won’t have cash just sitting in your account unused if you don’t want it. It also allows you to create a more diversified portfolio.

Robinhood Fees

The only thing you pay for with Robinhood is the Gold service, which is totally optional.

The cost of Gold starts out at $5 per month and it gives you access to things like margin lending and deeper analytics. Though they are still not on par with the analytics of some other brokers, this does take a step in the right direction.

Robinhood Pros

  • Completely free platform
  • No account minimum
  • Fractional Shares
  • Options trading
  • Beginner Friendly
  • Good User Interface

Robinhood Cons

  • No mutual funds
  • Very basic research tools
  • No retirement accounts

Sign up for Robinhood! + Get 1 Free Stock

What Is Fundrise?

Fundrise is a bit unique in the world of online investment platforms. They allow their users to invest directly in real estate without the hassle of finding, managing and directing the investment. This is accomplished through something called real estate crowdfunding.

Usually, real estate investing is difficult for the average investor as it requires a large amount of capital to get started.

fundrise review

Fundrise aims to bridge the gap between the average and the wealthy investor. Fundrise investors collectively pool money together that is used to invest in portfolios of real estate. Since everyone is chipping in money, the investment minimums are low.

They currently offer three different investment portfolios as well as a starter portfolios for those looking to give it a shot.

Want to learn the ins and outs of crowdfunded real estate?

Here's our free guide that covers the basics of getting started with this investment.
We will show you how to get started with as little as $500 and explain the basics, like debt versus equity investments.
Get The Guide

How Does Fundrise Work?

Fundrise brings the world of crowdfunding to the investment industry. All the investors pool their money in order to purchase real estate.

In comparison to other real estate investing options, their account minimum is relatively low at $500.

At one point, Fundrise was only available to accredited investors. Now, they offer their service to non-accredited investors as well, giving average people the ability to get in on the opportunities of private real estate.

In the past, these deals were reserved for high net worth investors who were "in the know."

Fundrise Features

Money Back Requests

Fundrise allows you the option to get out of a deal if you start to get cold feet or something comes up.

You may request your money back in the first 90 days of the transaction.

Investors should note that this is not a guarantee but more of a way of saying Fundrise will make their best efforts to get this done for you. There is also a 60 day waiting period after you submit the request to liquidate your shares. During times of volatility, Fundrise may be unable to offer this.

That being said, you should not invest with Fundrise unless you are ready to commit for 5 years! Real estate is an illiquid investment, and as such the ability to cash out is not guaranteed. They do offer a quarterly redemption period, however.

Portfolio Options

Fundrise offers a variety of preset portfolio options for you to choose from depending on what you want from your investment experience.

Starter Portfolio: This is for new investors who just want to get the feel of Fundrise. The account minimum for this is only $500. With this portfolio, your assets will consist of 50% growth and 50% income-oriented holdings.

Supplemental Income: As the name suggests this consists of income-generating holdings. Your returns will be earned mostly through dividends of income-producing real estate. The minimum is $1,000.

Balanced Investing: This option is similar to the starter portfolio as it offers assets comprising 50% growth and 50% income-oriented investments. The goal is to balance real estate that is appreciating in value as well as those that accrue income. The minimum is $1,000.

Long Term Growth: Asset appreciation is the main goal of this portfolio. This is of course used with long term interests in mind. The returns will comprise mostly of the sale of underlying properties. The minimum is $1,000.

Click here to invest with Fundrise!

Fundrise Fees

When you invest in Fundrise you will pay a fee of 1% per year. This fee consists of a 0.15% advisory fee and a 0.85% management fee.

They do have some of the lower fees in the real estate investing circuit with some competitors charging 1.25% fee in its place.

Fundrise also does not charge a commission in order to facilitate purchases.

Fundrise Pros

  • Low account minimum of $500 for the starter portfolio
  • Low fees in comparison to other real estate services
  • Passive real estate investent
  • Retirement accounts offered
  • Money back requests offered for first 90 days

Fundrise Cons

  • Highly illiquid investment
  • Distributions are taxed as ordinary income
  • Distributions are not guaranteed

Verdict: Robinhood vs Fundrise

The differences between these two investment platforms are staggering. This does not mean that one is head and shoulders better than the other. In fact, many investors will find that both are useful in their own way!

When it comes down to it, you are going to have to sit down and think about where your investment journey is going to take you.

If you want a free service that allows you to trade stocks, make use of options contracts and even get into the world of cryptocurrency then Robinhood may be a good fit.

However, if you are more of a passive investor or someone who is looking for supplemental income from their assets Fundrise might be the better way to go.

If liquidity is a priority, you should avoid Fundrise altogether as this is a highly illiquid investment.

At the end of the day, diversification is important when it comes to investing. It might make sense to have some money in stocks and some money in a private real estate investment like Fundrise.

Click here to invest with Fundrise!

Sign up for Robinhood! + Get 1 Free Stock

Fundrise vs Robinhood
Article written by Jason Dolan
Jason has worked for over 7 years in sales and marketing, along with a background in web development. During his free time, Jason enjoys learning and educating others about investing and personal finance.

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