The service is suitable for investors and traders who seek a basic app for trading stocks, ETFs, cryptocurrency and options. If you're seeking a full-service investment brokerage platform with access to bonds, mutual funds and futures trading, Robinhood isn't for you. That said, it was one of the first platforms to offer crypto trading, and it has offerings absent on other platforms, like fractional shares and penny stocks.
As the name suggests, Robinhood is on a mission to democratize investing. Robinhood began the commission-free trading revolution that has since been adopted industrywide. The app-based brokerage firm also offers a debit-card-based spending account, replacing the former cash management product. There are no minimum required investments or trading commissions, which makes the app suitable for new investors.
- Fee-conscious investors.
- Small, newer and tech-savvy investors who can figure out a platform on their own.
- Beginner to intermediate investors.
- Day traders who only need basic order and asset types.
Robinhood was founded in 2014 by Stanford University graduates Baiju Bhatt and Vladimir Tenev and began as a software trading service for hedge funds. They were inspired to build a company that used technology to give everyone, not just the wealthy, a chance to participate in the financial markets. Since the company's inception, many competing app-based investment platforms have copied the Robinhood model.
Users might appreciate these features:
- You can send cryptocurrency to friends as a gift.
- New users get one free share of a stock chosen by Robinhood when they open an account.
- You can receive free stock when you refer friends.
Pros
Tech-savvy investors who are short on cash are likely to consider investing via Robinhood.
The platform's top features include:
Buy and sell stocks, exchange-traded funds and Bitcoin on a mobile device.
Clean interface.
No fees for most transactions, although Bitcoin transactions may charge a small fee.
Bitcoin can be transferred to and from an external wallet.
Fractional shares are available for small investors.
Automated investing.
Round-ups available with Cash App debit card.
Debit card, cash management and instant payments.
Cons
The company suffered from trading outages and halted trading on certain securities during periods of high demand.
Robinhood disadvantages include:
Difficulty contacting customer service via email.
No mutual funds, individual bonds, futures or options on futures.
No stocks that trade on foreign exchanges, closed-end funds or preferred stocks.
Limited account types – no joint or custodial accounts available.
No downloadable advanced trading platform.
Robinhood Fees and Costs
Robinhood doesn't charge trading commissions or fees to open or maintain an account. There are also no fees to transfer funds into your account.
Other Fees
Most funds levy management fees that go directly to the fund management company. Wherever you invest, you'll pay these fees.
There's a $100 fee for a full or partial account transfer to another brokerage firm. Other fees relate to overnight mailing charges and other infrequent services.
How Much Does Robinhood Gold Cost?
The Robinhood Gold subscription offers extra services and products including access to margin trading. For a service fee, starting at $5 per month, users get:
- Access to research reports.
- A 8% per year margin interest rate.
| Annual Account Fee |
Account Transfer Fee (Partial) |
Full Account Transfer/Closure Fee |
Cash Reserve Annual % Yield |
Insufficient Funds/Return Check Fee |
Options Commission |
Options Fee (per Contract) |
Margin Trading Rates (Effective Rate for $20K) |
International Trading Costs |
| $0 |
$100 |
$100 |
0.01% (5% for Gold members) |
$0 |
$0 |
$0 |
Available with Robinhood Gold at 8%, and with standard at 12%. |
ADR fees paid to issuing banks range from $0.01 - $0.03 per share. |
Robinhood's product offerings are narrower than its larger brokerage firm competitors. The service is suitable for investors and traders who seek a basic app for trading stocks, ETFs, cryptocurrency and options. Extended hours trading is available from 7 a.m. to 9:30 a.m. and from 4 p.m. to 8 p.m. EST. If you're seeking a full-service investment brokerage platform with access to bonds, mutual funds and futures trading, Robinhood isn't for you.
Available assets include:
- Stocks, including initial public offerings, or IPOs.
- ETFs.
- Options.
- Cryptocurrency.
Investment Assets
Stocks
- Trading is available for more than 5,000 stocks and ETFs.
- Users receive one free stock for referring a friend (and they get one, too).
- Penny stock trading is available, but the stock must trade on the NYSE or Nasdaq exchanges.
- ADRs, which offer a way to trade international stocks, are available for more than 650 global companies.
- Day trading is also available at Robinhood, subject to Financial Industry Regulatory Authority rules.
- Fractional shares, which are fractions of whole shares of a company or ETF, are available.
ETFs
- Publicly traded ETFs are available from a variety of providers, giving investors access to bonds, stocks and other assets, along with strategy investing.
Options
Robinhood is commission free and without per-contract fees, a rare advantage in the options investing arena.
To help retail investors understand what they're getting into, the platform has made efforts to ramp up its options educational portal.
- Approval is required to trade options, as is the custom at all brokerage firms.
- Options trading is also available and should be sufficient for all but the most sophisticated options traders.
The following shows a sample of the platform’s Level 2 and Level 3 options trades:
Level 2
- Buying a call or put.
- Selling a covered call.
- Selling cash-covered puts.
Level 3
- Call credit spreads and put debit spreads.
- Iron condors.
- Iron butterflies.
- Calendar spreads.
Robinhood doesn’t allow selling uncovered options as there’s no limit to the amount of money you could lose with some naked strategies.
Cryptocurrency
- Robinhood was one of the first trading apps to offer cryptocurrency.
- Investors can buy and sell Bitcoin (BTC), Ether (ETH), Dogecoin (DOGE), Litecoin (LTC) and more.
Services
Robinhood Gold is the platform's fee-based premium service.
Gold users have access to in-depth research reports from Morningstar, bigger instant deposits, access to lower margin interest rates — 8% compared to 12% with a regular account — and Level II market data (monitoring real-time bids and asks directly from Nasdaq).
Access to the Morningstar reports is an important feature for investors who lack other sources of unbiased research. Even if you don't use margin trading, Morningstar research, among the other perks, might still interest you.
Robinhood's 24/7 phone customer service lets users request a phone call and receive a notification when they are next in line for a callback. Chat customer support is also available 24/7.
Additional customer service includes a search feature and a support page that provides answers to typical questions surrounding:
- Getting started.
- Account and login.
- Investing.
- FAQs.
- Documents and taxes.
- Bank transfers and linking.
If a user can't find the answer to a question, they can email, phone or use the chat feature to contact the company.
Does Robinhood Offer Good Customer Service?
Complaints against Robinhood submitted to the Better Business Bureau have spanned various issues from the inability to withdraw funds from an account to inaccurate share counts. The company is not BBB accredited. In fact, it has an D+ score with the BBB and there's a "pattern of complaint" alert for the business on the company's BBB page.
According to the BBB alert, complaints have ranged from not getting a response or follow-up from customer service, to having to verify identity repeatedly while still being denied account access. The bureau said it has reached out to Robinhood to address the concerns but has so far not received a response.
Is Robinhood Safe and Reputable?
In early 2021, Market turmoil surrounding excessive trading of stocks like GameStop Corp. (GME) and AMC Entertainment (AMC) forced Robinhood and other investment platforms to limit trading on certain securities. As one might expect, this has led to increased complaints about Robinhood’s platform.
Robinhood App Customer Reviews
Robinhood’s mobile app reviews feature some happy customers, especially those using the iOS system.
Robinhood is not a typical feature-rich platform like the major investment brokerage companies, so complex features are limited. Investors who seek a sophisticated, downloadable trading platform and analytical tools should look elsewhere.
The Basics
Robinhood is primarily a platform to buy and sell stocks, ETFs and cryptocurrencies. Its research information is limited but includes detailed quotes and reports for Robinhood Gold members.
Platform features include:
- Real-time market data and earnings information.
- Watchlists to create customized stock and cryptocurrency lists to track selected assets.
- Cards that provide information about new platform features, account updates and market news.
- Candlestick charts to help with stock analysis.
Order Types
The order types are sufficient for most investors. Robinhood doesn’t offer short-selling, bracket, market-on-close, or market-on-open orders. Active and sophisticated traders seeking advanced investment order types should look elsewhere.
Stock market orders: There is the option to add good-for-day (GFD) and good-til-canceled (GTC) for each order.
- Market.
- Limit.
- Stop.
- Stop limit.
- Trailing stop loss.
Options orders:
- Limit.
- Stop limit.
- Stop market.
Cryptocurrency orders:
- Market.
- Limit.
- Stop.
- Stop limit.
Robinhood App Review: Mobile Experience
Robinhood was designed as a mobile trading app for on-the-go investing. So users can access all platform features on the app.
The mobile features, which are explained in this review, include:
- Commission-free stock, ETF, options and cryptocurrency trading.
- Educational portal to learn about investing.
- News, real-time market data and customized alerts.
Account Types
Robinhood offers one account type, an individual brokerage account. Robinhood doesn't offer joint, custodial or trust accounts. This is a drawback for couples and parents seeking a custodial account. The company mentions that more account types will be available in the future. Within the individual brokerage account category, there are additional account options:
- Basic Account: This version includes margin, instant deposits up to $1,000 and extended-hours trading. Electronic deposits are available.
- Robinhood Gold: This costs $5 per month and 5% interest on cash, offers Morningstar research reports, larger instant deposits, Level II market data and a margin discount.
Research and Education
The education portal does a good job of laying out basic investing concepts and strategies. Offerings are listed within the Learn category and include:
- Investing basics: This includes the ABCs of investing in stocks and funds along with margin trading.
- Library: The library tab branches out into strategy, economics and deeper information.
- The Robinhood Snacks newsletter: a free daily newsletter with financial news and information.
Research reports from Morningstar are available to Robinhood Gold users. Morningstar analysts are impartial and many have advanced financial education. This unbiased research is a premier information service and well worth the $5-per-month fee.