Robinhood offers commission free stock trading to US clients via intuitive trading apps. They provide trading tools and market research. However, the range of financial products and funding options are limited compared to other online brokers.
Robinhood Review, Pros & Cons
- SIPC member
- Morningstar research
- Level II market data
- User friendly mobile app
- US clients only
- Limited financial markets
- No Metatrader
- No forex currency trading
- Minimum $2,000 deposit for gold account
- Limited funding options
- No online chat support
In this detailed Robinhood review, our online broker research team have covered some of the most important aspects for you to consider when choosing the best broker for your online trading needs.
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 trading services to clients in the United States of America (USA).
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.
In this instance, Robinhood is an online broker that offers a variety of different ways for clients to invest on self-directed accounts via web or mobile devices. You can conduct an unlimited amount of commission free investing on stocks, funds, options and cryptocurrencies via Robinhood Crypto. Please note that other fees may still apply.
Robinhood’s goal is to make financial market investing more affordable, intuitive and easier to access for investors of all experience levels. Clients can manage their investment portfolio and assets anywhere in the world (with the exception of a few countries) from the Robinhood app for Android and iOS devices. They can keep up to date with their investments by setting flexible and customised news and notifications alerts.
Robinhood also offer a debit card through their brokerage accounts where uninvested cash is moved into banks that pay variable interest rates. These cards can be used worldwide where Mastercard® is accepted with no fees from over 75,000+ ATM’s. Furthermore, the cash that is in the programs banks is also eligible for up to $1.25 million of Federal Deposit Insurance Corporation (FDIC) insurance, or up to $250K per bank, subject to FDIC rules. The FDIC is a government agency designed to protect consumers and the U.S. financial system.
Robinhood Financial is a member of the Financial Industry Regulatory Authority (FINRA). Securities trading is offered to self-directed customers by Robinhood Financial.
Robinhood Financial LLC is a member of the Securities Investor Protection Corporation (SIPC), which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash).
Cryptocurrency trading is offered through an account with Robinhood Crypto. Robinhood Crypto is not a member of FINRA or SIPC. Cryptocurrency investments are not protected by either FDIC or SIPC.
Robinhood International, Ltd., a Robinhood subsidiary, is authorised and regulated by the Financial Conduct Authority (FCA) with reference number 823590, to operate as a broker in the United Kingdom (UK).
Robinhood do not offer client accounts in any jurisdiction where Robinhood Financial is not registered. Currently, they offer services to the United States although they are planning to expand operations into the United Kingdom, hence the FCA regulation. Some Robinhood broker features and products mentioned within this Robinhood review may not be available to traders from specific countries due to legal restrictions.
Robinhood is currently available on iOS, Android, and most web browsers. Robinhood Web runs on both Mac and PC, with support for most modern web browsers including Chrome, Safari, Firefox, and Edge.
Robinhood is supported in most countries excluding Cuba, Iran, North Korea, Syria, and the Crimea region of Ukraine. In these countries you cannot access your account, and attempted log-ins from within those regions may lead to account restrictions.
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.
Robinhood platform features:
- Web & mobile devices (iOS & Android)
- Level II market data
- Morningstar research & insights
- Check stock reports & details
- Create watchlists
- View candlestick charts
- Technical indicators for chart analysis
- Set customised alert notifications
- Place multiple order types
Robinhood Trading Tools & Education
Robinhood offers professional research by partnering with Morningstar which gives users unlimited access to in-depth analysis and research report on over 1,700+ stocks. The Robinhood platform also has a range of inbuilt tools for analysing markets, managing orders and receiving alerts.
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. The writers are well respected having had material published by WSJ, Forbes, and Bloomberg, to name a few.
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.
Robinhood offer trading on over 5,000 Stocks, Funds, Options and Cryptocurrencies. This includes most U.S. equities and exchange-traded funds (ETFs) listed on U.S. exchanges. You can invest without any commissions in individual companies or bundles of investments (ETFs). Trade long or short on popular stocks, including over 250 global stocks not listed on American exchanges. Cryptos include Bitcoin, Ethereum and Dogecoin. It is worth noting that Robinhood Crypto is not a member of FINRA.
- 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
Robinhood Accounts & Fees
Robinhood offer a choice of three types of accounts to suit the different needs of investors. 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.
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 gives access to 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 clients to place commission-free trades during the standard and extended-hours trading sessions but does not give access to instant deposits or instant settlements.
As broker fees can vary and change, there may be additional fees that are not listed in this Robinhood review. It is imperative to ensure that you check and understand all of the latest information before you open a Robinhood broker account for online trading.
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.
Robinhood Deposit & Withdrawal
Robinhood offer deposit and withdrawal via bank transfer. This is limited and many users would find it beneficial if they offered online payment processor options such as PayPal, Neteller, Skrill, etc.
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.
Clients 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. 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.
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.
Robinhood Account Opening
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 one of the 50 states of the US or Puerto Rico.
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.
You can make a bank deposit prior to your account being confirmed but it will not be deposited until your account is officially opened.
Robinhood have a 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.
Robinhood offers commission free stock trading on easy to use and flexible trading applications. They have some useful trading tools for assisting with market analysis and keeping up to date with the latest economic news events. However, their services are currently limited to the USA, funding options are limited as is the range of financial products offered.
All securities trading, whether in stocks, exchange-traded funds(“ETFs”), options, or other investment vehicles, is speculative in nature and involves substantial risk of loss. The past performance of a security, or financial product does not guarantee future results or returns. You should consider whether you understand how these investment vehicles work and whether you can afford to take the high risk of losing your money.