Robinhood Review

Robinhood logo

Robinhood

8.5

Millennial Money rating

Expert Take

Robinhood is an investing platform that offers commission-free trades on stocks, options, ETFs, and cryptocurrencies. Their real-time quotes, customizable watchlist, and research tools make it one of the best online brokers for both experienced and new investors.

Pros

  • Commission-free trades on stocks, funds, options
  • Many investing options
  • Supporting research
  • Intuitive easy to use app and website
  • Free stock when you sign up

Cons

  • Customer support only via email and chat
  • No checking or savings accounts
  • Can't invest in tax-advantaged retirement accounts like IRAs

Investing options

9.5

User Experience

9.5

Fees

10.0

Features

9.5

Security

9.5

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at Robinhood

Robinhood is an online investment services company that offers commission-free trades on stocks, options, ETFs, and cryptocurrencies.

Their real-time quotes, customizable watchlist, and research tools make it one of the best online brokers for both experienced and new investors.

The company also offers margin trading, options trading, and in-depth research from Morningstar and Nasdaq.

I’ve been using the Robinhood mobile app for the past few months and really enjoy both how easy it is to use and the easy to digest in-depth information on stocks they provide with their Robinhood Gold plan for $5 a month. I honestly feel like it’s made me a better and more informed investor.

As a trading platform, it’s almost too easy to buy and sell stocks, and because you can make as many free trades as you’d like, I find myself checking the app often and wanting to trade more often than I should. This is why I have less than 1% of my net-worth in Robinhood but I really enjoy using it.

This Robinhood review covers everything you need to know about this fast-growing company, its services, the fees they charge, and my personal experience using the app.

About Robinhood

Founded in 2013, Robinhood Markets, Inc., more commonly referred to as Robinhood or Robinhood Financial is a financial services company headquartered in Menlo Park, California.

Their core product is the extremely popular Robinhood mobile app for both Apple and Android devices where you can trade stocks, bonds, ETFs, mutual funds, and cryptocurrencies all 100% commission-free.

Where old-school companies like Vanguard and Charles Schwab feel like they’re for your parents, Robinhood is super fast, intuitive, and clearly designed for younger investors. It’s no wonder I like using it so much – it’s was designed for people just like me.

Yet despite Robinhood’s relatively new presence in the world of online investing, they’ve managed to gain quite a bit of momentum. In fact, the company was recently valued at $7 billion, putting it firmly in the unicorn category in just a few short years.

The Robinhood App

Robinhood’s app is impeccably designed – smooth, sleek, intuitive, and easy to use. It actually makes investing fun, which can be good or bad depending on how disciplined you are as in investor. I find myself checking it at least 20 times a day, sometimes more. It’s addicting, which makes it super easy to day-trade, an investing strategy I don’t recommend.

My personal investment strategy is largely based on investing in low-cost diversified index funds, which you don’t need Robinhood to do. But I also enjoy investing in individual stocks and Robinhood is the best investing app out there.

You don’t have to take my word for it; the Robinhood App has high ratings in both the Apple App Store (4.8 stars out of 5, with over 1,600,000 reviews) and on Android through Google Play (4.3 out of 5, with over 135,000 reviews). I’m an Android man myself and love the app.

Commission-Free Trading with Robinhood

Robinhood’s claim to fame is they allow customers to make an unlimited number of commission-free trades on stocks, ETFs, mutual funds, and options in a brokerage account.

Back in the day stockbrokers would charge you money every time you bought or sold a stock, but Robinhood’s mission is to make investing easy, accessible, and affordable so they offer free trades.

This one simple decision has completely disrupted Wall Street and over the past few years, after watching the growing popularity of Robinhood, many of the biggest stock brokerages have also introduced commission-free trading.

In the past year, financial juggernauts Charles Schwab, T.D. Ameritrade, and Fidelity have all announced they would no longer charge fees on trades.

But that hasn’t stopped Robinhood’s continued growth and it’s definitely the most popular investing app with millennials and new investors. Their zero-commission trading could save you big money over the long haul. The money you would typically spend on fees gets reinvested into your account—adding to your compounding returns.

Robinhood Options

Robinhood Options enables advanced investors to try their luck on options trading. On the Robinhood platform, there are no fees for options trades or limit orders.

Savvy traders can also use complex options trading techniques such as iron condors, straddles, and strangles using Robinhood.

As I mentioned, while I don’t recommend it as an investing strategy, many of Robinhood’s features are particularly useful for day trading or trading penny stocks.

Robinhood Gold

I pay $5 a month for Robinhood Gold, their premium account option, which includes round-the-clock access to over 1,700 Morningstar reports and access to Level 2 market data. Robinhood Gold is free for the first 30 days so you can try it out and easily cancel before you get billed the $5. Unlike most apps, Robinhood actually sent me a notification before they billed me asking if I wanted to cancel.

But I find the Morningstar ratings and analysis of each stock particularly valuable and enjoyable to read so I keep paying the $5 a month.

In the Morningstar reports you can access a deeper analysis of the core business behind the stock, including the risks and opportunities for the company. These reports are worth way more than the $5 a month Robinhood charges and I’ve spent hours (no joke) looking through them.

Another benefit of Robinhood Gold I’ve found useful is the ability to instantly deposit up to $5,000 from my bank account so you can buy a stock quickly. Without a Robinhood Gold account, it typically takes 4-5 days to transfer money into Robinhood.

Just last week I saw an opportunity to invest in American Airlines stock and wanted to do it quickly so I instantly deposited $2,000. The $5,000 instant deposit limit resets each time the money clears your bank account.

With the Robinhood Gold account, you also get access to $1,000 of margin you can use to trade. When you trade on margin you are borrowing money from Robinhood to trade and I don’t recommend it.

After the first $1,000 in margin, you’ll pay an 8.00% annual interest rate (12.00% for non-Gold users) compounded daily on every dollar above that amount. While the margin account certainly gives you more buying power for your stock trades, be careful anytime you’re borrowing money.

Cash Management

A Cash Management account provides an impressive APY for your uninvested cash. The APY is currently set at 1.50% APY, but goes up to 5.00% APY if you upgrade to a Gold account. This is comparable to what you would get from the best high-yield savings accounts.

Cash management account holders also get the benefit of having unrestricted access to funds with a Robinhood ATM debit card, which can be used for purchases anywhere that Mastercard is accepted. You’ll also be able to withdraw funds at their network of over 75,000 ATMs.

As with any investment or savings account, make sure to do your homework. Personally, when it comes to HYSAs, I feel safer trusting companies that are FDIC-insured. With that said, it looks like Robinhood Cash Management accounts offer FDIC insurance on cash management accounts, so that’s good news.

Robinhood Fractional Shares

Another feature Robinhood added recently is fractional shares, where you can buy a piece of a share of a stock instead of the whole share.

This is particularly useful if you want to buy a share of a stock that’s expensive like Amazon or Google and don’t have enough money to buy a full share.

Robinhood Crypto

Robinhood Crypto is the newest division of the company. This service enables you to trade the most popular cryptocurrencies—like Bitcoin, Ethereum Classic, Dogecoin, and Litecoin —without paying any commissions.

Due to the various licensing and legal complexities behind digital currency trading, Robinhood Crypto is a separate entity from Robinhood Financial but you can still use it in the mobile app and through the web platform.

While trading cryptocurrency is extremely popular and the commission-free trading format is attractive because other platforms charge a percentage of the transaction or a fixed dollar amount, we don’t typically recommend it as an investing strategy.

Does Robinhood Have Any Fees?

Robinhood is free to sign up and you get a free stock after you open an account. Stocks, options, funds, market orders, and cryptocurrency trading are also 100% commission-free.

What’s more, there are no monthly fees or minimum balances, so you can get started with even a small amount of money and grow your account from there.

As discussed earlier, if you upgrade to a Robinhood Gold account, there’s a $5 fee each month after the free trial expires. If you trade with margin amounts over $1,000, you’ll also pay a 8.00% yearly interest rate on the amount of margin you use over the initial $1,000.

For the full details about Robinhood’s fees, check this out.

At the end of the day, most account holders will never pay a fee unless they upgrade to a premium account.

Getting Started

It took me less than 60 seconds to sign up for a Robinhood account. Simply download the mobile app or visit the website and fill out your basic information.

Next, you’ll have to confirm your identity and link your external bank account so that you can deposit and remove funds. Once that’s done, it’s time to submit your application, and you’re good to go. I was approved to trade in a few minutes on a weekday. However, it might be a bit slower if you sign up on a weekend instead of a business day.

One cool thing about Robinhood is that they give you a chance to earn free Robinhood stock when you successfully open an account. Once you are approved and link your bank account, you’ll earn a specified dollar amount ($5-$200) and be able to pick your gift stock from a list of 18 of America’s leading companies. You can use the cash value toward fractional shares of the companies offered.

Security

Robinhood customers can rest assured that their funds and trades are safe and secure. Here are some of the main security benefits the company offers:

  • Robinhood is a member of the Financial Industry Regulatory Authority (FINRA).
  • The company is licensed to transact stocks by the Securities and Exchange Commission (SEC).
  • Robinhood is a member of the Securities Investor Protection Corporation (SIPC) making stocks and options accounts up to $500,000 protected.
  • Account passwords are encrypted using the latest bank-level encryption technology.
  • Two-factor authentication is an option for those seeking added security.

Customer Support

Robinhood has an easy to use customer support platform. If you have a question or technical issue, you’ll have to send an email to customer support, and an agent will get back to you.

If you do need to call Robinhood their phone number is 1-650-294-4858, however it’s unclear how many employees they have answering customer service requests. I personally haven’t had to call them and found all of the answers to my questions myself in the customer service area of their website.

While you might not be able to speak with an advisor on the phone, Robinhood has gone the extra mile by offering lots of easily digestible educational content on their website. So, if you have any questions or want some advice, the resources on their site can be particularly helpful.

Their address is:

Robinhood Financial LLC, 3200 Ash Street Palo Alto, California 94306 United States

Pros and Cons

Pros

  • Commission-free trades on stocks, funds, options
  • Deep dive company reports and analysis with Robinhood Gold
  • Next-level cryptocurrency platform (also commission-free)
  • Intuitive, easy-to-use website and apps
  • Enjoyable user experience
  • Robinhood gives you a free stock when you open an account

Cons

  • No customer support over the phone
  • Not a real bank (no checking or savings accounts)
  • No tax-advantaged retirement account options (such as a 401k or Roth IRA)

Alternatives to Robinhood

Some of Robinhood’s main competitors include:

Keep in mind that each of these companies offers different services from Robinhood, and some of them charge fees. You’ll have to do some homework to find the one that best suits your needs.

Frequently Asked Questions

Here are some answers to the most commonly asked questions I hear about Robinhood.

How do I get my money out of Robinhood?

You can easily transfer funds from your Robinhood account to your linked bank account through ACH. This process can be initiated on the Robinhood website or right in the mobile app and it typically takes 4-5 business days for the money to reach your bank account. Per federal regulations, you’ll have to wait a few days to withdraw cash after making a trade.

Is Robinhood safe?

Yes, Robinhood is safe to use. They are a well-established financial services company. At the same time, it bears repeating that all forms of financial investing come with some risk. Still, Robinhood’s platform is no riskier than its competitors and they offer bank-level security.

Is Robinhood good for beginners?

Absolutely. Robinhood is actually our favorite trading platform for beginners and new investors here at Millennial Money. However, I don’t recommend investing in individual stocks without doing a fair amount of research first and I never recommend having more than 10% of your net-worth in individual stocks.

If you’re new to investing I’d strongly recommend you keep reading about investing. There is tons of info out there about the best ways to get started. You can read up on my investment advice here.

How much does Robinhood charge per trade?

Robinhood charges $0 per trade. It’s 100% free to trade stocks, funds, and options with Robinhood. The only time you’ll pay a fee is if you trade margins (as explained above).

The Bottom Line

Robinhood is an exceptional app that made me a better investor. It’s perfect for both experienced and new investors, whether you’re a millennial or not. While I often check the app 20 or more times a day and it’s easy to get addicted to, the upside is that it’s easy to buy stocks quickly when I see an opportunity.

I’ve also been impressed with the Morningstar reports and I’ve learned a lot reading them. Since the reports are right in the app they are easy to access and get information. Over the past five years, I’ve personally tested hundreds of investing apps, and Robinhood is by far my favorite.

If you are interested in stock trading, cryptocurrency trading, or buying fractional shares of stocks with zero-commission and no account minimum, then you should definitely check out this trading app. The money you would typically spend on fees gets reinvested into your account—adding to your compounding returns.

While commission-free trades are now the norm thanks to Robinhood, this free trading app stands out as the best-in-class. I plan to buy all of my individual stocks through Robinhood moving forward and I’m excited to see how it develops.

If you can’t already tell, I’m a fan.

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  • Comment Author image blank
    Excellent and complete analysis of Robinhood! I enthusiastically recommend it. After reading it, I decided to start using my LLC business using Robinhood. Thanks, Grant, for your great contribution with this investing analysis! Blessings, Horacio A Hernandez.