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At a glance
- Free US stock and ETF trading
Robinhood
As the name suggests, Robinhood is looking out for the little guy—although we’re not talking about robbing anyone. The app-based investment platform suits newcomers to investing thanks to an easy-to-grasp interface, fractional shares, and decent cash management.
Our quick take
Its approachability for beginners, however, is its downfall for more experienced traders. Those with an eye on more will find themselves frustrated by the limited investment options and research tools. One area it does shine is its cryptocurrency trading platform—another strong attribute for those new to the scene.
Pros and Cons
Pros:
Simple app-based format
Fractional shares
Its own IRA
Earn interest on uninvested cash
Cons:
No mutual funds or bonds
Customer service has a bad reputation
Limited research tools
Overview
Investment accounts are an excellent way to save money, beat inflation, and build long-term wealth. But the reality is, getting started can be daunting. Thankfully, there are now dozens of excellent investment account options with platforms built to support any level of investor.
Robinhood is one of those making serious waves in the space—and it’s angled perfectly toward beginners and casual investors.
With an outstanding user interface and varied investment options, Robinhood might be the best option for your investing goals. Let’s take a deep dive into Robinhood.
Who’s it for?
It’s primarily app-based, making it perfect for younger investors with a solid understanding of modern tech. The low thresholds for investing and commission-free trading again lean into the inexperienced market, but that doesn’t mean someone with more experience but an eye for simplicity could make solid use of it.
The Bottom Line:
Robinhood is an app-based investment platform offering commission-free trading on a multitude of options, including stocks, ETFs, options, and cryptocurrencies. An easy-to-use interface makes it an approachable entry point for newer investors.
Intro Bonus
Unlike our credit card section, you’ll find less in the way of introductory bonuses. With that said, Robinhood is currently running some service-specific offers to its customers. Check it out.
With Robinhood premium service, Robinhood Gold, customers can grab a 3% IRA boost of up to $420 by maxing out contributions for 2025 before April 15th. Non-gold members can get the same offer but only matched to 1%. Transferring an IRA or old 401K before April 30th unlocks unlimited 2% matching.
Pros & Cons
As always, nothing is perfect and Robinhood is no exception to that rule. Here’s what we love and don’t like so much about Robinhood.
Pros
- Commission-free trading and fractional shares make it approachable for new investors.
- The app-based format is extremely user-friendly, helping make it convenient and less intimidating. It's a cryptocurrency integrated and makes trading simple.
- Includes retirement plans like IRAs
- The Gold subscription service adds more value in the form of handy tools and data.
- Users can take part in company IPOs
Cons
- Limited Investment Options compared to full-service brokerages
- Its customer service has faced criticism for long response times
- Educational content is minimal, which is at odds with the approachable app
Key Features
Commission-free Trading
Robinhood’s greatest draw is commission-free trading. By eliminating the added costs tied to trading stocks, ETFs, and options, more people have fewer barriers to investment. This alone should be an interesting enough proposition for an interested newcomer to check out Robinhood.
Fractional Shares
Fractional shares are a great way of investing in high-value stocks without the capital typically required. Instead of purchasing one share at $1,000, an investor could buy 10% of a share for $100. Not all platforms allow this, but Robinhood does, letting its customers invest effectively with whatever money they’re comfortable with.
Cryptocurrency trading
Whatever your view on crypto, there’s no denying the money that can be made in the space. If you’re willing to deal with the inherent volatility and risks, Robinhood allows investors access to a number of different cryptocurrencies, allowing them to diversify their investment portfolio further.
Robinhood Gold
Robinhood offers a subscription service for as little as $5 a month, allowing customers to access high-end data tools, instant deposits, margin trading, and other earning perks like the IRA bonus mentioned above. Beginners may not find too much use from it immediately, but after learning the ropes, the value may be compounded.
Interest on Uninvested Cash
A nice touch that many investors will enjoy is the ability to earn interest on cash in your account that’s gone uninvested, allowing every penny to work for you—not just the money wrapped up in stocks and the like.
Retirement accounts
Robinhood even offers retirement accounts in the form of traditional or Roth IRAs, along with a 1% match on contributions. This helps users to keep their money in one place instead of using multiple products to maximize their money.
Fees and Pricing
Let’s take a look at the fees and prices involved in using a Robinhood account.
- Standard Trading: $0 commission on stocks, ETFs, and options
- Robinhood Gold: Monthly subscription fee
- Cryptocurrency Trading: Spread markups apply
- ACAT transfer fee: $75
Robinhood’s Investment Options
As suggested before, Robinhood’s investment opportunities are limited compared to some other platforms. That doesn’t mean it’s not useful. Plenty of investors value simplicity, opting to hone in on specific trading options.
Currently, Robinhood users have access to the following types of assets:
- US exchange-listed stocks and ETFs
- Options contracts for US exchange-listed stocks and ETFs
- ADRs for over 519 globally-listed companies, such as RYCEY and BABA
- Cryptocurrencies (although options are limited compared to other platforms)
It’s also possible to invest in an IRA fund with comparable rates to employer offerings. As well as all this, the company is set to allow futures trading soon, although an official launch date is still unknown.
Customer Experience
Robinhood’s app is generally excellent, especially for those with their finger on the world of tech. While an app-based format champions simplicity, it leads to some issues on the support end.
Most customer support is limited to in-app chats and email, which can be frustrating for those trying to resolve a problem quickly with direct communication. There are also some complaints regarding how long it takes to get back to customers.
The good news is that Robinhood is taking steps to improve this aspect of the business.
Is Robinhood Safe?
It’s important to remember that investing comes with a degree of risk, regardless of the platform you use. Never venture into the space if you’re not in a financially viable place to do so.
With that said, Robinhood does everything it can to protect its customers.
On top of the typical SIPC insurance which covers up to $500,000 per account, it also has further coverage for up to $50 million per account. Its spending accounts and any cash not invested are covered by FDIC insurance for up to $250,000. Any unauthorized account activity will be 100% reimbursed under a company guarantee.
Legal Issues
It’s also worth noting the company has faced multiple legal battles over the years, often coming out on the wrong side of the law. Most of the issues are related to using so-called “gamification” tactics to entice inexperienced users to the platform or to engage in higher risk investments. The company has been fined millions over the years, and does appear to have made attempts to change the things it was accused of.
The Point
Robinhood opens investing to a far broader demographic using an approachable app-based platform. This makes it perfect for newcomers or those valuing simplicity, but does mean its potential is limited for those more serious about their investments. The range of financial offers including the opportunity to grow uninvested funds is excellent.
- Free US stock and ETF trading
Robinhood
As the name suggests, Robinhood is looking out for the little guy—although we’re not talking about robbing anyone. The app-based investment platform suits newcomers to investing thanks to an easy-to-grasp interface, fractional shares, and decent cash management.
Our quick take
Its approachability for beginners, however, is its downfall for more experienced traders. Those with an eye on more will find themselves frustrated by the limited investment options and research tools. One area it does shine is its cryptocurrency trading platform—another strong attribute for those new to the scene.
Pros and Cons
Pros:
Simple app-based format
Fractional shares
Its own IRA
Earn interest on uninvested cash
Cons:
No mutual funds or bonds
Customer service has a bad reputation
Limited research tools
by your friends at The Daily Navigator
