Robinhood Review 2024

Robinhood Financial Products

The Robinhood investment app offers versatile financial products. From the outset, the platform has offered stocks and exchange-traded funds free of platform commission and fees. Nowadays, the app also allows you to trade options. On top of that, Robinhood is one of the rare platforms that enables cryptocurrency trading, focusing in particular on Bitcoin trading. However, it doesn’t offer mutual funds and bonds trading, or futures trading.

Stocks and ETFs

Stocks and exchange-traded funds (ETFs) were Robinhood’s first financial products. The platform enables the painless trading of stocks, regardless of the device you use. You can download the mobile app to sell or buy stocks, or you can do that directly from the web. If you choose the web version, you can track stocks’ performances and see each company’s earnings, which can help you refine your trading strategies.

As for markets, you can rest assured that you’ll always get the latest market price for the security you want to trade. Robinhood collaborates with Nasdaq to provide users with real-time market information from all 13 US market exchanges.

For traders who want to diversify their portfolios, there are Robinhood ETFs. The platform covers a range of sectors, allowing you to make investments in any number of companies.

Robinhood Options

Robinhood options are another form of investment you can trade, with basic call and put options. After conducting our review, we’ve concluded that options trading on Robinhood is good for both beginners and experienced traders. The platform offers three levels of options trading catering to different levels of experience.

Robinhood Crypto

As we mentioned earlier in this article, Robinhood allows you to buy and sell Bitcoin and many other cryptocurrencies, including Dogecoin, Ether, Bitcoin Cash, Monero, and Dash. Overall, cryptocurrency trading is currently available for 17 currencies, which makes Robinhood one of the most comprehensive trading platforms when it comes to digital money.

Robinhood’s Additional Products

Our review wouldn’t be complete if we didn’t mention the other services and features this platform offers. Aside from various financial instruments, the company has additional products that help users manage their finances even better. There are three important additional features we need to discuss.

Robinhood Cash Management Account

Cash management is a service that you’d usually find at traditional banks, but at Robinhood, you can enjoy the benefits of this service too. A Robinhood cash account is a convenient tool that you can use for free if you have a Robinhood brokerage account. You can manage your funds, pay bills, send checks, and make other transactions with uninvested funds. With this account, you’ll get a 0.30% APY and a customizable debit card that you can use at more than 75,000 ATMs across the country.

Robinhood isn’t a bank as such; collaborates with several banks to provide this service to users. All banks that collaborate with Robinhood are FDIC members, meaning that each account holder is insured by up to $250,000.

Robinhood Fractional Shares

Much like other similar trading platforms, Robinhood offers fractional shares. If you’re not familiar with this type of investment, the trading platform is loaded with articles and a guide that can help you get your head around the concept.

In short, fractional shares are a form of investment that enables you to buy a portion of a stock, thus investing in stocks that would otherwise be out of your reach. Moreover, with fractional shares you can build a diversified portfolio by investing money in several different companies at the same time.

The best part of buying fractional shares on Robinhood is that you can invest as little as $1. You simply need to choose the stock or stocks you want to invest in, then this trading app will do the rest. Depending on the money you deposit, the app will convert it into portions of stocks.

Robinhood Fees and Commission

Robinhood is best known for providing completely free trading services. There are no platform fees and costs regardless of the product you choose. You can trade stocks and ETFs for free, but the platform’s biggest advantage is that you can also trade options for free.

While there are many platforms that enable free trading of stocks and ETFs, Robinhood is one of the rare companies that doesn’t charge anything for options contracts. For regular options traders, this is beneficial because they don’t need to worry about how many contracts they have.

Similarly, there are no crypto fees, and the platform won’t charge you account maintenance fees, annual fees, or ACH fees. The only trading fees you need to pay are for ACAT outgoing transfers, which cost $75.

Aside from offering all these free services, Robinhood stands apart from many other trading platforms because it doesn’t require a minimum balance to open an account. You can download the app, create an account, and start trading stocks or any other investment you like within a minute.

Robinhood Gold

Robinhood Gold is a higher-level service that enables users to trade on margins. As you probably know, this type of investment is risky since you trade with borrowed money. Although many trading platforms offer this service, we don’t recommend it if you’re a beginner.

Robinhood charges $5 per month for this account. According to customers, that’s too pricey for the services you get. However, with a Robinhood Gold account you undoubtedly get better trading tools than with a regular account.

Aside from getting access to margin trading, you’ll also receive research reports from Morningstar and get access to “level II” market data.

How Does Robinhood Make Money?

Robinhood is a pioneer in providing fee platform trading services. But if it’s completely free to buy and sell stocks on Robinhood, how does the platform make money?

There are, as you might suspect, several ways. In our review, we mentioned Robinhood Gold. Unlike a regular Robinhood account, this service costs $5 per month and gives you access to premium features. The cash management program is also a source of income for the platform, as Robinhood makes money from customers’ debit cards.

However, premium accounts and debit cards are just a secondary source of income. Most money comes to the platform from rebates from market makers and trading venues.

Robinhood Ease of Use

Designed to give ordinary people easy access to the world of investments, the Robinhood app is praised for its simplicity. The app is primarily intended to be used on Apple phones and Android devices. However, there’s also a web version that you can access from any device you like.

The signup process is fast and straightforward. You’ll need to provide essential information to the platform, like your name, address, ID, and Social Security number. At that point the company will verify your identity and send the approval within one hour.

Robinhood offers a fintech approach to trading, meaning that most of the actions are streamlined and tailored to make trading much easier for beginners. However, you still might find it difficult to use the Robinhood app, especially if you’ve never traded before. For those who are not sure how to use Robinhood, there’s a help center with a pile of articles and guides to help you learn.

Robinhood Trading Tools

Unlike other platforms, the Robinhood app offers only basic trading tools. Both the mobile app and the website have limited trading features, which is the main downside of this trading platform.

The the platform also has fewer features than other similar products. For example, the number of indicators is limited to a few, while other trading platforms offer hundreds.

Despite these apparently limited features, we found Robinhood tools good enough to trade stocks, options, and cryptocurrencies. The UI is also well-organized, so you can find various order types or categories quickly.

One of the company’s latest features is recurring investments. This means you can create a schedule and set the amount of money you want to invest, and the platform will automatically perform the trade on the date you choose.

Robinhood Customer Service

The company’s biggest downside is its customer service. For example, the customer service phone number is practically impossible to find. There’s no live chat support either, so the only way to talk with a representative is to write an email. However, email support is also extremely hard to get; if you’re not a member of the platform, there’s no way to get in touch with Robinhood customer support.

Instead of direct support channels, the website offers articles, blogs, and guides that inform you about trading and using the platform. There’s an extensive library with articles that explain basic investment topics, such as “What is a portfolio?” and “What is diversification?”

We also need to mention another type of support that the company offers: Robinhood Snacks, a newsletter where you can read the latest financial news every day.

Robinhood Customer Satisfaction and Security

Initially praised for its “democratization of finances,” Robinhood quickly gained enormous popularity among millennials and young traders. However, the company's reputation has dropped dramatically since the platform restricted users from purchasing GameStop actions in early 2021, a move that sparked outrage and caused literally hundreds of thousands of disgruntled users to write negative reviews. To loyal Robinhood users, it seemed like the company had abandoned them to save the hedge fund managers they’d been battling against.

As you probably know, GameStop’s actions skyrocketed in value in January 2021. This was thanks to an army of Reddit users who decided to band together and buy stocks using Robinhood, causing hedge funds that had shorted the stock to lose billions. Later that month, Robinhood stopped trades of GameStop, BlackBerry, AMC, Nokia, and other stocks, which resulted in massive protests, a lawsuit against the company, and a tsunami of negative reviews on the internet.

Even today, Robinhood users remain furious about the platform’s decision, claiming that it constituted market manipulation and caused them to lose a lot of money unfairly. Indeed, a significant number of users sold all their stocks and switched to other trading platforms to continue their crusade against the hedge funds.

On Trustpilot, there are more than 3,7000 reviews and an overall score of 1.2/5 stars.