Robinhood gives you access to commission free stock trading via a modern and user-friendly investing app. They provide you with some exclusive trading tools and market research to help you make informed decisions. You can choose from an excellent selection of financial instruments across multiple asset classes including stocks, funds, options and crypto. They are one of the few brokers that I have come across who offer fractional shares in stocks from as little as $1. Webull being another option. You can also invest in new companies before their stock starts trading on public exchanges with the IPO offering. The broker is on a mission to democratize finance for all and I feel like they have the technology and team in place to do that.
Pros & Cons
- User-friendly trading and investing app
- Access stocks and ETFs with no commission fees
- Fractional shares and IPOs
- Quality execution on trades
- Lots of helpful educational content
- Quality tools for market research and insights
- Excellent customer support
- USA clients only
- CFD trading not available
- Limited funding options
- No online chat support
- Minimum $2,000 deposit for gold account
Founded in 2013 by two classmates, Robinhood Markets Inc, referenced informally as Robinhood, is a U.S.-based financial services company headquartered in Menlo Park, California. They offer online investing and trading services to those of you who reside in the USA. The founders came up with the name when they discovered that big Wall Street firms were paying next-to-nothing to trade stocks, while most Americans were being charged commission for every single trade. They wanted to change that, so they headed back to California to build a financial product that would give everyone—not just the wealthy—access to financial markets.
Most readers will be familiar with the legendary character “Robin Hood” who is a legendary heroic outlaw originally depicted in English folklore and subsequently featured in literature and film. According to legend, lived in Sherwood Forest, near Nottingham. He regularly fought against his enemy, the Sheriff of Nottingham. Robin is known for dressing in green, for being a skilful archer and for taking from the rich to give to the poor. Hence, the inspiration behind the name.
Investing & Trading
Robinhood gives everyone access to the financial system, regardless of your background or bank account balance. That’s why they have uniform interest rates, no account minimums, and a product that was designed from the ground up for small accounts. They would rather serve many small customers over a few large ones and make sure that everyone feels at home at Robinhood.
There is a good variety of different ways for you to invest on self-directed accounts via all of your desktop and mobile devices. I think it is great how you can conduct an unlimited amount of commission free investing on stocks, funds, options and even access cryptocurrencies via Robinhood Crypto. Although there is no commission charge, there are some other fees that still apply. After all, the broker has to make money somehow so they can keep on trying to improve their service.
Robinhood Cash Card
You can turn purchases into stocks and crypto with the Robinhood Cash Card. It’s a debit card with weekly bonuses that helps you invest as you spend. You can earn stock and crypto rewards, unlock everyday savings and automatically invest part of every paycheck in your choice of stocks and crypto. When you use your Robinhood Cash Card, there are never monthly fees, in-network ATM fees, or overdraft fees—and you won’t need to maintain a minimum balance. You can access 90,000 fee-free ATMs and get 24/7 phone support.
Securities trading is offered to self-directed customers by Robinhood Financial. Robinhood Financial is a member of the Financial Industry Regulatory Authority (FINRA). I am pleased to see that the broker has top-tier regulation in the USA where they operate. I would always prefer to use a regulated broker. This is because they can give you certain protection that an unregulated broker cannot if something was to go wrong. I therefore wouldn’t have any problem trusting them with my funds which is great as it means that I can focus on my trading. They work closely with regulators and lawmakers to protect customers and the broader financial system.
Despite the many positive aspects of the broker, they currently only serve users in the United States although they are planning to expand operations in the future. If you are not located in the US, please feel free to check out our broker comparison tool for alternatives.
Robinhood’s goal is to make financial market investing more affordable, intuitive and easier to access for investors of all experience levels. The platform has everything you need to place and manage your positions. You can keep up to date with your investments by setting flexible and customised news and notifications alerts. Level II market data from Nasdaq is available on Robinhood Gold which has a suite of powerful tools, data, and strategies. Level II data displays the different bid/ask levels for chosen stocks which can help to determine a stocks availability at specific prices. Advanced traders have the capabilities to perform more sophisticated strategies via the platforms such as iron condors, strangles, straddles, etc.
You can manage your investment portfolio and assets anywhere in the world (with the exception of a few countries) from the Robinhood app for Android and iOS devices. Robinhood is currently available on iOS, Android, and most web browsers. The Robinhood Web runs on both Mac and PC, with support for most modern web browsers including Chrome, Safari, Firefox, and Edge. I think it is great how you can run the web platform without needing to install any software and you always get access to the latest version. However, I prefer the convenience of the trading app as I like to take the markets with me in my pocket and access them whenever I feel like it.
I found the Robinhood platforms to be easy to navigate with sleek and modern interfaces that make performing your daily trading activities a breeze. However, if you require more complex market analysis using customised indicators then you might find it limited. In this instance, I would suggest the MetaTrader platform as an alternative. This is widely regarded as one of the best trading platforms for day trading and you can get it through many trading brokers including IG.
That being said, if you are a casual trader or looking to hold positions over the long term, I think the Robinhood platform should have more than enough features and functionalities to meet your needs. You can customise the platform to be as complicated or simple as you need it to be, depending on your trading style.
Some of the key features of the platform include the following:
- Sleek user-friendly interface
- Level II market data for accurate pricing
- Excellent Morningstar research & insights
- Check important stock reports & details
- Create watchlists to follow your favourite instruments
- View candlestick charts to spot price formations
- Technical indicators for analysing charts in detail
- Save time by setting customised alert notifications
- Place multiple order types including instant & pending orders
- Platform is free to use on web & mobile devices (iOS & Android)
As mentioned above, the Robinhood platform has a range of inbuilt tools for analysing markets, managing orders and receiving alerts. If you want to take things to the next level, you will be pleased to see that they make available some additional tools free of charge. These can be great to assist you with your market research and analysis. I found them helpful to inspire ideas that I amy have otherwise been aware of. If there is a position you have open or are considering opening, you might want to use the tools for direction.
I really appreciate how the broker offers professional research by partnering with Morningstar. This is a great feature that gives you unlimited access to in-depth analysis and research reports on over 1,700 stocks. I like how they are updated frequently to reflect important company events so you can keep in touch with what is happening in the markets. Each report covers professional analysis and ratings on the company’s business strategy, economic moat, fair market value, risk, and leadership. You can read these reports to learn what Morningstar professionals think about a company’s outlook and better inform your investment decisions. However, only Robinhood Gold members get unlimited access to their premium, in-depth stock research reports.
The Robinhood newsfeed is available from within the app. In partnership with Dow Jones, it delivers market news coverage from The Wall Street Journal, Reuters, and Barron’s, at no additional cost to users. You can browse news stories from trusted news sources including those that are relevant to your investment portfolio and watchlist. You can set notifications for stocks in your portfolio and watchlist. There are also ad free videos from CNN Business, Cheddar, and Reuters, displayed directly in your feed.
The broker has a generous selection of learning materials that teach you what you need to know about investing from the get-go. You can browse an extensive library of investing basics explained in plain English. I think it is really useful how the content is also available in the app as this allows you to learn at your own pace and in comfort.
There is a section of the Robinhood website dedicated to learning through a collection of frequently updated and informative articles covering a wide variety of investment topics for both beginner and advanced traders alike. It’s nice to know that the writers are well respected having had material published by WSJ, Forbes, and Bloomberg, to name a few. Investing 101 is a good place to start, where you can get the low-down before you dive in.
This is a cool 3-minute newsletter with fresh takes on the financial news you need to start your day. I found it to be nice way to get a head start on what may impact the markets during the day ahead and can see how it would benefit in planning your trades.
Through Robinhood, you can invest in and trade on an impressive selection of over 5,000 Stocks, Funds, Options and Cryptocurrencies. This includes most U.S. equities and exchange-traded funds (ETFs) listed on U.S. exchanges. I like how you can invest without any commissions in individual companies or bundles of investments (ETFs). You can even trade long or short on popular stocks, including over 250 global stocks not listed on American exchanges. Cryptos include Bitcoin and Ethereum. It is worth noting that Robinhood Crypto is not a member of FINRA. With thousands of stocks to choose from and Fractional Shares, you can put in as little as $1 towards the companies that could potentially add value to you and your future.
- U.S. Exchange-Listed Stocks and ETFs
- Options Contracts for U.S. Exchange-Listed Stocks and ETFs
- Cryptocurrencies, including Bitcoin and Ethereum
- ADRs for over 250 Globally-Listed Companies
- You can become one of the first public investors in upcoming IPOs
- Invest in thousands of stocks with as little as $1 via fractional shares
Robinhood give you a good choice of three types of accounts to suit the different needs of investors. I like how you can upgrade or downgrade accounts at any time. The Robinhood cash and instant accounts do not offer leverage and the Robinhood Gold account offers leverage of up to 1:2. There is no minimum deposit requirements for the instant account although the Gold account does have a $2,000 minimum required. There is a useful feature called device monitoring that adds an extra layer of security to your account by allowing you to view and manage the various devices accessing it. You can also setup two-factor authentication for another layer of security to your account.
The Robinhood Instant account is the default account you start with after signing up. It gives access to instant deposits for up to $1,000 and extended hours trading.
The Robinhood Gold account is similar to the Instant account although it offers some additional benefits. The Robinhood Gold account is available from $5 per month which I feel is quite reasonable consiering the extra features that you get. It includes access to valuable research reports from Morningstar, level II market data from Nasdaq, enables trading with margin and the ability to make bigger deposits whilst having quicker access to funds. Investing on Margin can give you more flexibility and buying power but also increases overall exposure. There is a 30-day free trial on the gold account available. You can still access Robinhood gold and all its premium features even if you do not want to trade with margin. In this instance, you simply turn trade with margin off.
The Robinhood Cash account enables you to place commission-free trades during the standard and extended-hours trading sessions but does not give access to instant deposits or instant settlements.
If you wish to apply to open a Robinhood account you must be over 18 years of age, have a valid social security number and be located in the USA. To open an account, you can submit an application via the Robinhood app. After one day you will receive confirmation if your application has been accepted or if further information is required. You will need to verify your identification and address by uploading the relevant documents such as passport, drivers’ licenses, utility bill, bank statement, etc. Documents can be submitted via the app. It can take between 5-7 days for your documents to be reviewed and your account confirmed. This isn’t the quickest signup process you will find but they need to make sure they comply with regulations which may cause delays. You can make a bank deposit prior to your account being confirmed but it will not be deposited until your account is officially opened.
Customer support is offered via email and telephone during market hours (9:30am – 4:00pm EST). It would be more beneficial if they offered online live chat support although there is a large collection of frequently asked questions (FAQs) available on their website that covers most topics. However, if you’d still like access to 24/7 support, I recommend checking out Trading 212.
Since the very early days of Robinhood, they have prioritized getting direct customer feedback on what they are building. Talking to customers forms the kernel of the product development process that got them where they are today. They are always open to hearing your feedback and ways in which you feel they can improve. If there is something missing you would like them to include, feel free to reach out to them.
Robinhood only support deposit and withdrawal via bank transfer. This is quite limited and I find that it would’ve been much more beneficial if they offered online payment processor options such as PayPal, Neteller, Skrill, etc. For a better variety of funding methods, I recommend checking out Oanda as an alternative.
You can link a major bank in the Robinhood iOS or Android app. You just need to choose your bank from the list of major banks or manually search for your bank. Once you have linked your bank account you can make deposit into your Robinhood account. You can transfer up to $50,000 per business day into and from your account. You can also set up automatic transfers into your Robinhood account or cancel pending deposits before three specified cut-off points.
You can receive instant deposits up to $1,000. The time for transfer of any deposit more than $1,000 will be approximately 5-6 business days. Although you can get instant access to funds, the ACH withdrawal could happen 5-6 business days after you initiate the transfer. If the required funds are not available in the account then the transfer will be reversed.
Due to Anti-Money-Laundering (AML) requirements, you can only withdraw funds to the bank account from which they were deposited in the first 60 days. If the account in question is closed, it is possible to initiate a transfer to another bank account, provided you can supply the required information.
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|Instruments||Forex, Commodities, Crypto, Stocks, Indices, Options, Bonds, ETFs||Forex, Commodities, Crypto, Stocks, Indices, Options, Bonds, ETFs||Forex, Commodities, Crypto, Stocks, Indices, Bonds|
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Overall, there are many aspects of Robinhood that impress me and make them stand out from the competition. You can get commission free trading and investing on easy to use and versatile platforms. There are some good trading tools that I found to be really useful for assisting with market analysis and keeping up to date with the latest economic news events. They build safeguards and provide education so that clients are in the best position to succeed.
However, their services are currently limited to the USA and the funding options are limited. They don’t provide CFD trading and professional traders may find the platform to be slightly restrictive in terms of analytical capabilities.
Robinhood have high quality timely customer support and believe that the financial system should be built to work for everyone. That’s why they create products that let you start investing at your own pace, on your own terms.