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In-Depth Analysis

Robinhood Review

Julija A. Image
ByJulija A.
September 29, 2021

Primarily designed for small screens, Robinhood is one of America’s most popular trading apps. Why? Because it provides an uncomplicated trading experience for everyone by offering simple-to-use investment tools. A commission-free platform, game-like interface, and access to a range of investments are just some of the reasons why hundreds of Robinhood reviews from users speak positively about this trading platform.

We’ve undertaken detailed research to find out how good this platform really is. Keep reading to find out more.

Min. account balance
$0

Available securities: Stocks, ETFs, cryptocurrencies, options

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Fortunly Rating

MINIMUM ACCOUNT BALANCE
$0
STOCKS AND ETFS TRADING FEES
$0
OPTIONS TRADING FEES
$0
MARGIN TRADING FEES
2.5%
ACCOUNT MAINTENANCE FEES
$0
ACAT OUTGOING TRANSFER FEE
$75
AVAILABLE SECURITIES
Stocks, ETFs, cryptocurrencies, options
CUSTOMER SUPPORT
Email, help center, newsletters
pros thumb up Strengths
  • Free service with low fees
  • No minimum account balance
  • Intuitive UI
  • Mobile app for Apple and Android
  • 17 available cryptocurrencies
  • Cash management product
  • Trade fraction shares
pros thumb up Weaknesses
  • Limited number of securities
  • Limited number of trading tools

Robinhood Overview

Robinhood is a California-based online trading platform launched in 2013. The platform is designed and operated by Vladimir Tenev and Baiju Bhat, a pair of classmates and roommates who decided to create a financial app for ordinary people and symbolically name it Robinhood.

The main idea behind this app is to enable people with little or no budget to access financial markets and trade stocks. As Tenev once stated, most online brokerage platforms charge up to $10 per trade for a service that actually costs them less than a penny, meaning that serious traders need to have hundreds or thousands of dollars in their account. That’s why he and his partner created a platform that enabled more flexible trading conditions.

Robinhood’s cost-free platform is not the only reason why the app has become so popular among small-scale traders. Many first-time traders are thrilled with the platform’s game-like user interface that makes complex financial tools seem much easier to manage. Robinhood is primarily a fintech product, meaning that most of its functions are automated and easy to use.

Thanks to its free service, simple-to-use interface, and variety of financial products, the app has more than 13 million users, mostly people in their twenties and thirties.

Although there are other similar products that also offer free services, Robinhood is still one of the best trading platforms you can find. Aside from the app’s simplicity, Robinhood investing reviews also praise the fact that the company regularly offers new financial products. It’s one of the rare platforms where you can trade BTC, and the platform recently introduced fractional shares trading and recurring investments.

Despite the platform’s simplicity, Robinhood is not the best option if you’re looking for advanced research features. Also, more experienced traders will find Robinhoods’s limited securities to be problematic.

How does Robinhood compare to other investment platforms?

Robinhood Logo Robinhood
Minimum account balance:

$0

Stock and ETF trading:

$0

E*Trade Logo E*Trade
Minimum account balance:

0$ (robo-advisor $500)

Stock and ETF trading:

$0

tastyworks Logo tastyworks
Minimum account balance:

$0

Stock and ETF trading:

$0

Types of 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 of Robinhood stock trading, you can track stocks’ performances and see each company’s earnings, which can help you refine your trading strategies.

As for Robinhood 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 Robinhood options trading 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 Robinhood app 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 Robinhood 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 Robinhood crypto fees, and the platform won’t charge you account maintenance fees, annual fees, or ACH fees. The only Robinhood 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 Robinhood 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 Robinhood app reviews, 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 Robinhood trading 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.

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 trading 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.

Trading Tools

Unlike other training platforms, the Robinhood stock 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.

According to Robinhood trading reviews, many point out that the platform offers only basic tools and 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

According to Robinhood stock trading reviews similar to ours, perhaps the company’s biggest downside is its customer service. For example, the Robinhood 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 Robinhood 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?”

In our Robinhood investing review, we 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.

Customer Satisfaction and Security

Initially praised for its “democratization of finances,” Robinhood quickly gained enormous popularity among millennials and young traders. However, Robinhood downloads have 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 on Robinhood. 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 Robinhood reviews on the internet.

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 Robinhood stocks and switched to other trading platforms to continue their crusade against the hedge funds.

Currently, Robinhood has a rating of just 1.7 stars on Google Play. Despite the fact that Google has already deleted more than 100,000 negative reviews, claiming that they were “inorganic,” there are still more than enough negative Robinhood stock reviews to keep confidence in the company very low. On Trustpilot, there are more than 2,900 reviews and an overall score of 1 star.

Final Thoughts

Robinhood is a US-registered platform that’s regulated by the US Securities and Exchange Commission. But after these recent events, we need to ask: Is the Robinhood app safe to trade on? We’ve focused on providing the most accurate information on the platform’s services, products, and reputation, but it’s up to you to decide where you want to invest.

FAQ
What is Robinhood? +

Robinhood is a 100% free trading platform that was launched in 2013. It was created for ordinary people who want to start trading stocks, options, ETFs, and cryptocurrencies. Read our Robinhood broker review to find out more about this platform.

Is Robinhood legit? +

Robinhood is a California-based trading platform that is owned and operated by Vladimir Tenev and Baiju Bhatt. It’s regulated by the US Securities and Exchange Commission and it uses the latest security measures to protect clients’ accounts. However, its reputation has been tarnished after the company decided to block purchases of GameStop stocks, disrupting people’s investment strategy.

Is Robinhood good for beginners? +

According to numerous Robinhood reviews, Robinhood is one of the best trading apps for beginners, praised for its simplicity, intuitive interface, and free services.

What is the monthly fee for Robinhood? +

Robinhood doesn’t charge any fees for its services. The only fee you need to pay is a $5 monthly fee if you want to use a Robinhood Gold account, which offers more comprehensive trading tools and access to level II market data.

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