You’ll get unlimited, commission-free trades across the following investment products:
- Stocks and funds. Browse over 5,000 available stocks and ETFs, including fractional shares for as little as $1.
- Options. Explore options trading with no per-contract fees.
- Cryptocurrency. Buy and sell 17 different cryptocurrencies any time of day, including Bitcoin, Litecoin and Ethereum.
What is Robinhood Cash Management?
The Robinhood Cash Management account offers brokerage account holders the opportunity to earn interest on cash sitting in their account. As of March 2021, Robinhood offers 0.3% APY and a free debit card with access to more than 75,000 nationwide free ATMs. There are no associated maintenance fees, foreign transaction fees or account minimums.
Robinhood is designed with the beginner in mind, with commission-free trades, a simple signup process and an intuitive interface. No account minimums mean newbies can open an account with no upfront investment and purchase fractional shares for just $1 apiece.
For advanced investors, Robinhood Gold offers Morningstar research reports, NASDAQ Level II Market Data and instant access to deposits of $5,000 to $50,000 for $5 monthly. But Robinhood’s lack of access to mutual funds, individual bonds and analyst research could be a deal-breaker for more active investors.
With this in mind, Robinhood’s trading platform is best suited to the following types of investors:
- First-time investors. With no account minimums or commissions in sight, Robinhood’s platform is ideal for beginners looking to explore their trading options.
- Small quantity investors. Fractional shares allow small quantity investors to purchase shares for as little as $1.
- Cryptocurrency investors. Cryptocurrency investors can swap digital coins with no commission fees 24/7.
Fees and costs
Robinhood trades have been commission-free since its launch in 2015. Back then, no commission fees were a pretty big deal, giving Robinhood an economic edge over its competitors. But today, many other trading platforms have dropped their commission fees, making it challenging for Robinhood to market itself as a low-cost alternative.
That said, Robinhood has many competitors beat when it comes to per-contract fees for option trades. Where many of its competitors, including Interactive Brokers, TD Ameritrade and Ally Invest, charge between $0.25 to $0.65 per contract, Robinhood offers these trades for free.
|Minimum deposit to open||$0|
|Stock trade fee||$0|
|Option trade fee||$0|
|Robinhood Gold||$5 monthly|
You can sign up on Robinhood’s website or download its mobile app to get started:
- Click Sign up.
- Create an account by inputting your first and last name and choosing a username.
- Enter your contact info, including your address and phone number.
- Verify your identity.
- Fund your account.
- Submit your application and wait for Robinhood’s email for the next steps.
To be eligible for a Robinhood account, you’ll need:
- A valid US residential address
- Be 18 or older
- Valid state-issued ID
- Valid Social Security number
You’ll be asked to provide the following information during sign up:
- First and last name
- Address, phone number and email
- Social Security number
- Valid government photo ID
- Employment information
- Financial institution account information
How does the free stock program work?
Robinhood offers a free stock when you sign up and link your bank account. Available stocks vary, but Robinhood states you have a 1 in 150 chance of receiving Visa, Johnson & Johnson or Apple stock.
You can also earn a reward stock by inviting your friends to join. When your friend signs up through your referral link and connects their bank account, you’ll both receive a free stock. Stock rewards are limited to a maximum of $500 per user per year.
The free tier provides some basic research to help you stay on top of the market, but seasoned investors and day traders might find it lackluster. You’ll get a feed of news articles about the market and specific stocks and companies from sites like the Financial Post, MarketWatch, Reuters and the New York Times, along with daily information on which stocks are moving the most.
For an additional $5 a month, Robinhood investors can sign up for Robinhood Gold to receive Morningstar and NASDAQ Level II Market Datastock research reports. If you’re looking for in-depth research, you’ll likely want to shell out for the upgrade.
Pros and cons
Here’s how Robinhood sets itself apart from the competition:
- Intuitive app. The app makes it easy for beginners to get started with trading.
- Commission-free trading. Robinhood doesn’t charge any commissions or fees to trade — even on options contracts.
- Fast approval. Deposits of up to $1,000 are approved nearly instantly.
- Cryptocurrency support. One of Robinhood’s major selling points is its cryptocurrency support, as not many platforms offer this feature.
- No account minimums. You can sign up for free and start trading with any amount.
Consider the following pitfalls before signing up:
- Limited support. The only way to access Robinhood customer support is through its online ticketing system.
- Limited investment options. You can’t invest in mutual funds or bonds through Robinhood — something that competitors like Chase You Invest and Ally Invest offer.
- No IRAs. Robinhood’s account options are limited to individual brokerage accounts, so if you’re seeking an IRA, you’ll have to look elsewhere.
Robinhood was founded in 2015 with headquarters in Menlo Park, California. It has its own Better Business Bureau (BBB) page but is not a BBB accredited business. It’s registered with the US Securities and Exchange Commission and a member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC).
Robinhood customers are protected up to $500,000, including up to $250,000 in cash balances. Cryptocurrencies are excluded from this protection, as they are not stocks.
Robinhood reviews and complaints
Overall, Robinhood’s online reputation is fairly negative. It’s amassed nearly 1,300 official BBB complaints over the past three years and averages 1.22 out of 5 stars based on 130 customer reviews as of March 2021. And its Trustpilot rating isn’t much better — averaging 1 out of 5 stars based on 3,000 reviews.
Many recent reviews mention outages associated with the recent surge in trading activity — in particular, the restrictions on trending shorted stocks, like GameStop and AMC. These outages resulted in Robinhood investors being locked in unfavorable positions, unable to execute trades and ultimately culminating in the loss of capital. Before this, negative reviews called out Robinhood’s limited customer support and delays in the cash withdrawal process. On the upside, customers love Robinhood’s commission-free trades, easy-to-learn platform and free stock referral program.
Overall, reviews of the Robinhood app are fairly positive. While the app has 1.7 out of 5 stars after 366,306 reviews on Google Play, it maintains an impressive 4 out of 5-star rating on the Apple App store after a whopping 3.2 million reviews. Many recent negative reviews on Google Play and the Apple App store cite Robinhood’s 2020 outages.
Robinhood service outages
In March 2020, the Robinhood trading platform experienced three major outages. The shortest outage lasted just under two hours, while the longest took 16 hours to resolve. In a blog post on its website, Robinhood founders Baiju Bhatt and Vlad Tenev explain that the outages were a combination of highly volatile market conditions and a record volume of trading action on the platform.
The founders state that it’s making improvements to shore up Robinhood’s internal infrastructure with reduced interdependencies and added redundancies. While the site has generally been stable since, it did have a short outage on June 18.
There’s only one way to connect with Robinhood support:
- Email. Fill out an online support ticket request on Robinhood’s website for an email response from the customer service team.
*Signup bonus information updated weekly.
Disclaimer: The value of any investment can go up or down depending on news, trends and market conditions. We are not investment advisers, so do your own due diligence to understand the risks before you invest.
Robinhood’s trading platform is a solid jumping-off point if you’re just getting into active investing or want to avoid commission fees. Its target audience includes first-time traders and cryptocurrency investors, offering accounts with no minimums, annual fees or inactivity fees.
But the platform isn’t for everyone. It’s limited by its simple design and lack of access to mutual funds and IRAs. More experienced day traders may want to opt for a platform with more sophisticated research tools.