Robinhood gives novice investors, and traders access to the market with low fees and zero balance requirement to open an account. While this makes the platform attractive to newer investors, the trading platform and tools may not be extensive enough for advanced users.
At A Glance
Pros & Cons
- Low trading costs
- Cryptocurrency trades
- User-friendly and intuitive mobile app
- Instant access to funds
- Limited resources and tools
- No trading of mutual funds and bonds
- No retirement accounts
Robinhood is best for:
- Beginner investors and traders
- Individuals looking to invest in cryptocurrency
- Mobile users seeking simplicity
- Commission-free trades
Robinhood Key Details
$0 for brokerage account; $2000 for a margin account
- No annual or inactivity fee
- $75 transfer out fee
- $5 a month for Robinhood Gold
All available ETFs trade commission-free
- American Depositary Receipts
- Individual account
- Margin account ($2000 minimum; $5 monthly fee)
- Web browser
- Mobile app
Social media and email support
An early-entry into the free-trading broker market, Robinhood lets investors trade a range of assets, including stocks, options, ETFs, and cryptocurrency. With no commissions or fees and user-friendly trading platform, Robinhood stands out as a good choice for new, young investors looking for quick, simple online trading. However, for more advanced investors and active traders, the limited selection of products and lack of advanced research tools may be a deterrent.
Robinhood is best for beginner investors and traders just starting out. The ease of access and the usability of the web and mobile platforms make it easy for people to transact. This platform is also good for individuals looking to invest in cryptocurrency and mobile users seeking seamless access to their investments
Robinhood offers a trading platform for web and mobile. Both versions are easy to use, letting new traders perform standard tasks quickly and easily. The platform does not offer most of the advanced tools common to other online brokers, including other zero commission platforms. There are no screening or back-testing tools, so if you’re looking for technical research and trading in one place, this platform might not be right for you. However, for basic market research and straightforward trading, Robinhood is a solid choice.
Both the web and mobile platforms let users execute trades, supporting market orders, limit orders, stop-limit orders, and stop orders.
Perhaps the best feature of the trading platform for beginners is the informative pop-ups guiding you through the mobile app. This helps you learn as you navigate and if you need assistance, you can always refer to a host of educational resources.
Some features of Robinhood’s mobile trading app include:
- Basic watch lists
- Stock charts without any technical analysis
- Price alerts only for stocks in the watch list
Like everything else about Robinhood, the research tools offered are limited compared to other brokers. There are no screeners, calculators, or customizable charting options. That being said, these tools may be overly complicated and intimidating for new investors, making Robinhood a good choice for beginners.
Robinhood’s super streamlined platform does offer very basic research, such as:
- Idea generators by sector
- Real-time news and videos from The Wall Street Journal, Reuters, Barron’s, CNN Business, Cheddar, and Reuters
- Basic charting without customization
- Share price data
- Basic ticker profiles
With minimal research amenities and no customization, Robinhood users may need to use a secondary platform to access more data, insights, and analysis.
Starting at just $5 per month, Robinhood offers a premium membership option that delivers more advanced trading and research capabilities for savvier investors. Gold members will enjoy third-party research from Morningstar, NASDAQ Level II market data, instant access to funds depending on account balance, and margin investing. For customers looking for more advanced research and analysis, the Gold subscription is an affordable upgrade to consider. Robinhood members can try Gold for 30 days at no cost.
This daily newsletter and podcast summarize market news in an easy-to-understand format. In just 3 minutes, Robinhood users can get a fresh take on financial news with the daily newsletter. In 15 minutes, podcast listeners learn about three top business stories in an exciting and engaging format.
Other educational resources available to Robinhood users are a host of simple articles outlining basic investment concepts. However, the site doesn’t host webcasts, courses, or other educational formats. All of the articles are available on-demand and in an easy to digest format. Users can search by topic to access a wide range of ‘What Is…?’ articles from Keynesian economics to term investment.
Advantages of Robinhood
Simple Interface: While advanced investors and active traders may not find all of the tools they need, Robinhood’s straightforward and streamlined platform is excellent for newer users. This mobile-first broker lets users execute trades quickly, so if you know what you want and aren’t looking for a wide range of research and analysis tools, this is a good, clutter-free option. Plus, it’s easy to sign up. Just enter your personal information, Social Security number, and link a funding account. Within an hour, you’ll be able to transfer in funds and begin trading.
No Commissions: Robinhood delivers a range of commission-free stock, options, ETFs, and cryptocurrency trades. Users will save a bundle over time, but it should be noted that while Robinhood was one of the first brokers to offer commission-free trades, many competitors have jumped on the bandwagon.
High-Yield Savings: Robinhood offers a cash management account paying 0.30% APY on any uninvested funds in the account. Users will get a debit card and free ATM withdrawals around the world. Robinhood’s cash accounts are secure, with up to $1.25 million FDIC insurance.
Fractional Shares: This option lets traders pay as little as $1 for a portion of a share, letting investors diversify their portfolio without needing too much money.
Disadvantages of Robinhood
Limited Asset Options: While Robinhood does include cryptocurrency in its offerings, users will not be able to invest in mutual funds or bonds.
Lack of Advanced Tools: Users looking for advanced research tools, including customizable charting, screeners, or back-testing will have to look elsewhere.
Limited Customer Support: If you need help right away, Robinhood does not include a live chat or phone option for accessing customer support. While you can send an email or post a question to social media channels, for customers looking for more guidance, they may not find it with Robinhood.
Is Robinhood Right For You?
Robinhood offers a straightforward, simple, and efficient trading platform and basic research tools for investors just starting out or traders looking to execute quickly while on the go. This is also a good option for learning about investing – Robinhood hosts a range of easy-to-understand articles explaining finance concepts and outlining how to begin investing. Plus, the daily newsletter and podcast offer daily market summaries for any level of understanding. If you are looking to start investing in small amounts or are interested in investing in cryptocurrency, Robinhood is also a good choice.