In A Nutshell
Robinhood is a zero-fee US broker established in 2013, and we recommend it for beginner traders. This broker has top-tier licenses from authorities like the Financial Industry Regulatory Authority (FINRA), and the US Securities and Exchange Commission (SEC).
Robinhood has a Cash Management service, excellent for earning interest on uninvested funds. This broker has a transparent approach in its services, which is why it is an excellent choice for beginner traders in 2020. We reviewed this broker based on a thorough analysis of 57 of the best forex brokers.
Robinhood Good & Bad
Robinhood has commission-free US stock investing. There are no inactivity or withdrawal fees. The web and mobile trading platforms are well designed and simple to use. The trading account opening process is smooth, fast, and digital.
There is a downside: Robinhood offers only a limited selection of assets, mostly from the US market. Customer service is slow and available only by e-mail. There are a limited number of educational tools.
- Free ETF and US Stock Trading
- Excellent Web Trading And Mobile Platforms
- Fully Digital And Fast Account Opening
- Limited Products Available
- Average Customer Support
- Limited Educational Materials
Main Features & Highlights At Robinhood
Country Of Regulation
Trading Fee Class
Account Opening Duration
Demo Account Availability
Crypto, Options, Stock, ETF
1. Fees and Spreads
At Robinhood, ETFs and US stocks are free. This broker has no withdrawal and inactivity fee. The downside is that the margin rates are high.
- No Commission For ETF And US Stock Trading
- No Fee For Withdrawal Or Deposit
- Clear Fee Structure
- High Margin Rate
Fees At Robinhood
Free ETF And Stock Trading
No Inactivity Fee
How We Assessed Fees
We assessed Robinhood's fees as low, average, or high, depending on how they compare to those of all forex brokers we reviewed.
To help you get a broader understanding of our process, here is the distinction between trading and non-trading fees.
• Trading fees happen when you trade. These can be conversion, commission, spreads, or financing rate fees.
• Non-trading prices are not linked to trading. These can be inactivity or withdrawal fees.
We shared in this review the essential fees at Robinhood for each asset class. For example, commissions are the most substantial fees for stock investing.
We reviewed Robinhood's costs in comparison with those of two competitor brokers, TD Ameritrade and Webull. Our assessment relies on objective factors, like client profile, fee structure, or products available.
Here are our top findings of Robinhood trading fees.
Robinhood Trading Fees
Robinhood has zero commission for cryptocurrency, options, and US stock trading.
ETF And Stock Fees
Overall, the ETF and stock fees are low. Robinhood has no commission on US stocks.
ETF And Stock Commission Of A $2,000 Trade At Robinhood
Robinhood allows you to trade foreign stocks via ADRs, but this service comes with a $50 fee for each trade.
It is best to look at Robinhood's financing rates if you prefer short sale or stock trading on margin.
A margin or financing rate happens when you trade on margin or short a stock. It signifies that you can lend stocks or money from your broker to trade. The borrowed asset has an interest, which you have to pay. Overall, a financing rate can be a significant part of your trading fees.
Financing rates at Robinhood are high.
Annual Financing Rates For Options And Stocks Of A $2,000 Margin Trade At Robinhood
US Margin Rate
The total margin rate: there is a monthly $5 fixed fee and no additional annual charge if the margin rate you use is up to $1,000. An additional 5% annual fee is charged if the margin exceeds $1,000.
For this review, we used a $2,000 margin rate. You pay an annual fee of $60 (3% of $2,000), along with an extra 5% annual fee.
As is the case with stocks, Robinhood has commission-free options trading.
Stock Index Options Commission Of 10 Contracts At Robinhood
US Stock Index Options
This broker has cryptocurrency trading in almost all US states. Robinhood allows you to trade cryptos without a fee.
Robinhood has low non-trading fees and no inactivity or withdrawal commission.
2. Account Opening
Account opening at Robinhood is fully digital and fast. The process takes around 24 hours. The downside is that only US customers can create an account.
- Full Digital
- No Minimum Deposit
- Available Only For US Customers
Only US customers can create an account at Robinhood. But, this broker plans to expand its services to other continents, too. For example, Robinhood already has a license from the Financial Conduct Authority (FCA) in the United Kingdom. The UK service should be available sometime in 2020.
Account Types At Robinhood
When you sign up, you open an Instant/Standard Robinhood account. You can convert it to a Robinhood Gold or a Cash Account afterward.
Robinhood Instant/ Standard Account
- Unlimited Day Trading
- Commission-Free Trades During Extended-Hours And Standard Trading Sessions
- Instant deposit up to $1,000
- Extended-hours trading
- Instant deposit up to $50,000
- Leverage up to 2:1
- Extended-hours trading
- Live market data (level II)
- Extra research tools, like recommendations from Morningstar
- No Instant Deposit
- Money Transfers take up to 5 days
- No Leverage
- Slow Settlement
- Limited Day Trading
- No Leverage
- Limited Day Trading
The main distinction between accounts is about day trading limitations, i.e., when you sell and purchase a stock on the same day. Both Robinhood Gold and Robinhood Standard accounts allow you three day-trades every week. If you trade more, your account will be blocked for 90 days. You can avoid this restriction if you have at least $25,000 in your account. The Cash Account comes without this restriction. So, you can have as many day trades as you wish without a minimum required account balance.
Another difference between accounts is leverage. Leverage refers to trading borrowed money from the broker. At Robinhood, this concept is Buying Power. Robinhood Standard and Cash accounts let you trade with leverage. Robinhood Gold permits 2:1 leverage.
Lastly, accounts at Robinhood come with distinct instant deposit limits.
Opening An Account At Robinhood
Opening an account at Robinhood is simple, user-friendly, and fully digital. You can submit your application in around ten minutes, and it will be verified in no more than 24 hours.
If you are a US client who wants to open an account at Robinhood, you will have to:
- Be 18 or older
- Have a valid social security number
- Have a legal US residential address
- Be a US citizen, US permanent resident, or have a valid US visa.
To complete the process, you will have to:
- Submit personal data, like date of birth, social security number, and address
- Answer short questions about your trading experience
- Verify your identity with an identity card, passport, or driver's license (you can use a photo of the documents taken with your smartphone).
3.Withdrawals And Deposits
Withdrawals and deposits are user-friendly and free. You can opt for an excellent cash management service. The downside is that you can use only bank transfers. Also, deposits over the Instant limit may take several business days.
- No Withdrawal Fee
- No Deposit Fee
- Cash Management Service
- Debit/ Credit Card Not Available
- Depositing Larger Amounts On Robinhood Gold Takes Longer
- Expensive Wire Withdrawal
Recently, this broker introduced the Cash management service. It can help you earn interest on uninvested funds.
Options And Deposit Fees
Deposits at Robinhood are free. The downside is that you can use only bank transfers.
Debit/ Credit Card
With the Instant deposit service, your money arrives instantly. If you don't use this service, the process can take up to five business days.
The Instant deposit service comes with limitations. For the Robinhood Instant account, you are allowed to deposit up to $1,000 instantly. For the Robinhood Gold account, the limit is $50,000. All transfers that exceed the limit will be charged only after 4 to 5 business days.
For example, if you transfer $1,500 in a Standard account, $1,000 will arrive immediately, while the rest is transferred after 4 to 5 business days.
You can only deposit funds from accounts in your name.
Withdrawal Options And Fees At Robinhood
Robinhood has no fee for ACH withdrawals.
Wire transfers are costly, as domestic transfers cost $25, and international wire withdrawals have a $50 fee.
Debit/ Credit Card
In most situations, withdrawals take around three business days. There is a daily withdrawal limit of $50,000. Another limitation is that deposited money not used for trading can be withdrawn after five business days.
You can only withdraw funds to accounts in your name.
When investing in stocks you can transfer stocks out or in your account, but outgoing transfers have a $75 fee per transaction. Incoming stock transfers are commission-free.
The Cash Management service is a new feature at Robinhood. You can receive interest on your uninvested cash. When we reviewed this broker, the yearly interest earned was 0.30%.
Also, you can use other services like:
- Request a Mastercard debit card from Sutton Bank
- Request a card from Revolut
- Pay bills or any purchases with the cash
- Withdraw from ATMs for free, if you use a device in-the-network (MoneyPass or Allpoint network)
FDIC-Insured banks hold uninvested cash, i.e., you receive up to $250,000 protection. You should know that deposits held in the same bank without the Robinhood Cash Management benefit from up to $250,000 protection.
Robinhood holds the uninvested cash at the following banks: Goldman Sachs, Bank of Baroda, HSBC, Wells Fargo, Citibank, and the US Bank.
To access the Cash Management service, you will have to sign up for a waitlist.
4. Trading Platform
Robinhood offers a trustworthy, well-designed, and user-friendly web trading platform. The downside is its limited customizability.
- Transparent Fee Report
- Safer Two-Step Authentication
- Limited Customizability (for workspace and charts)
Available Platforms At Robinhood
4.5 / 5 stars
5.0 / 5 stars
Disclaimer: Robinhood repeatedly crashed between 03 March and 09 March 2020. This situation meant that customers couldn't use their accounts to log in and trade. The market conditions were volatile. Our review is independent of this incident.
That situation was temporary, and any broker might experience an outage now and then. So, our Robinhood review for 2020 does not refer to this issue.
The web trading platform at Robinhood was released after the mobile platform. To get a better understanding you can compare this platform with our list of the best trading platforms in 2020.
Look And Feel
This broker's web trading platform offers excellent user experience due to its user-friendly design.
The standard workspace is easy to use and logical. You can customize it as you desire.
Security And Login
Robinhood has two-step authentication, which is safer than using only a password and a username.
Search features at Robinhood are reliable and transparent. The search bar allows you to do a simple search, but you can look for data by searching with tags.
Clicking on stock will get you related tags suggestions under the 'Collections' section (e.g., sector where a company is active). Clicking on a tag will get you information about stocks that share the same label.
It is a useful tool if you want a thorough comparison. For example, if you are searching for social media companies, you can click the tag and receive the full list.
Order types available at Robinhood include:
- Stop Loss
- Stop Limit
- Trailing Stop
You can opt for Good-Till-Cancelled (GTC) and Good-Till-Day order terms.
Placing an order will get you a useful estimated cost tab.
Notifications And Alerts
You can create push notifications and alerts for several events:
- Dividends payments
- Price movements
- Money transfers
- Earnings announcements
- Corporate actions
Companies reveal their quarterly losses or profits in their regular earning announcements. Corporate actions refer to events such as corporate mergers or stock splits.
Fee Reports And Portfolio
Robinhood's web trading platform comes with a transparent fee report function and simple to understand portfolio.
You can check the standard returns and costs on your stock portfolio. Also, you can access a pie chart revealing the diversity of your portfolio.
5. Mobile Trading Platform
The mobile platform at Robinhood is one of the best we've reviewed. It is well designed, easy-to-understand, and safe.
- Safer Two-Step Authentication
- Reliable Search Function
This mobile trading platform is available on Android and iOS devices. We tested the platform for Android.
The mobile trading platform has a similar design, functionality, and user experience as a web platform. The research tools differ from the web platform since a detailed stock screener is not accessible on mobile.
Robinhood's mobile trading platform offers a safe login. It uses two-step authentication with the option of adding convenient biometric authentication.
6. Desktop Trading Platform
This broker doesn't have a desktop trading platform.
7. Markets And Products
The product portfolio at Robinhood is limited. It offers only ETFs, stocks, cryptos, and options. Also, most assets are available only to US markets.
Asset Classes At Robinhood
Robinhood has an excellent selection of cryptocurrency. The downside is that both ETF and stocks are limited.
ETFs And Stocks
Robinhood has up to 5,000 ETFs and stocks. Most of these ETFs and stocks are on leading US stock exchanges. There are some non-US stocks available offered via ADRs and not through foreign exchanges.
In our reviews, we rank brokers based on how many markets they cover. Robinhood doesn't have a transparent policy concerning its market range. We recommend you reach Robinhood's customer service team before trading non-US stocks or small US stocks.
Keep in mind that 'penny stocks' or low-priced stocks that come with a price of less than $5 usually come from small companies. Penny stocks come with a high risk due to their volatility.
You can only trade stock index and stock options. The downside is that these options are available for bigger stocks, and not for all commodities.
There are several cryptocurrencies available at Robinhood. Some of these include Ethereum and Bitcoin. But you can track real-time data about minor cryptos such as Stellar and Monero.
Cryptocurrency Selection At Robinhood
When we reviewed this broker, cryptocurrency was available in the following states:
District of Columbia
Robinhood aims to expand its crypto trading service to additional US states.
Robinhood offers useful and easy to understand research tools. You can access quality news, trading suggestions, and some fundamental data.
The downside is that the charts are average and come with a limited range of technical indicators.
- Trading Ideas
- Asset Fundamentals Data
- Quality News Feed
- Limited Interactive Charting
- No/ Limited Analytic Tools
As it is the case with its trading platforms, Robinhood offers user-friendly research tools. There are some differences between the instruments. For example, the screener is missing from the mobile trading platform.
The Robinhood Gold Service comes with extra research tools: research reports from Morningstar and live market data (level II).
Various products come with analyst ratings from experts. These can aid you to make the best investment decision. Rank reveals the percentage of analysts who rate the stock as a hold, sell, or buy. You can check products linked to the one you're interested in the 'People also bought' menu.
Back in February 2020, Robinhood announced a new feature named Profiles. This feature allows users to customize their public profiles and look for other users' investments. We believe this is the first step towards social trading. However, at the moment, this feature is not active.
Robinhood offers standard fundamental data, like market capitalization, P/E, or the number of employees.
Robinhood has average charts. You can check past price fluctuation of the stock and a couple of technical indicators. The downside is that the detailed chart analysis requires the use of another app.
Clicking on a product offers relevant news feed. This information is of high quality, and it comes from top-tier third parties like Yahoo! Finance and Seeking Alpha.
9. Customer Support
Customer support at Robinhood is basic. You will receive useful information, but there is no chat or phone support.
- Fast And Relevant Answers
- No Phone Support
- No Live Chat
- No 24/7 Support
We believe that the weakest feature at Robinhood is customer service. You can reach out to its team via e-mail.
When sending an e-mail, you will have to select from topics like funding or account opening. Overall, we can say that the answers to our queries were knowledgeable. The response time was less than one day.
We believe that 24/7 support would be useful.
Robinhood offers only educational texts. These texts are simple to understand.
The downside is that there are no educational tools like tutorial videos or demo accounts.
- Quality Educational Materials
- No Demo Account
- No Video Tutorials For Trading Platforms
- No Educational Videos
You can learn from informative texts featured in the 'Learn' tab. All the information in these articles is logical and helpful for beginner traders.
Robinhood has licenses from top-tier providers, discloses its financial data, and offers reliable Investor protection. The downside is that there is no negative balance protection, and the broker is not on any stock exchange.
- Top-Tier Licenses
- High Level Of Investor Protection
- Public Financial Information
- No Negative Balance Protection
- No Banking License
- Not Featured On Stock Exchange
Robinhood has top-tier licenses from the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC).
Account Protection At Robinhood
Robinhood consists of two leading entities: Robinhood Crypto LLC and Robinhood Financial LLC. The former is responsible for cryptocurrency trading, while the latter manages options and stock trading.
Robinhood Financial LLC is part of the Financial Industry Regulation Authority and falls under the SIPC, the US investor protection program. SIPC comes with a protection limit of $500,000, and it doesn't include a $250,000 limit for cash.
Keep in mind that SIPC protects some of the investments. Mostly, SIPC protects stocks, bonds, mutual funds, notes, registered securities, and other investment company shares. Instruments like unregistered limited partnerships, unregistered investment contracts, fixed annuity contracts, interests in silver/gold, currency and commodity options, or commodity futures contracts are not protected.
Robinhood Crypto LLC is not part of the SIPC or FINRA. As such, trading cryptocurrency with this broker doesn't come with an Investor protection program.
Robinhood does not have negative balance protection.
Robinhood was established in 2013, and it serves clients in the US. It is a relatively new US broker, and you should know that the longer the track record, the most likely the broker will be successful in a financial crisis.
This broker is a private company, and it isn't on any stock exchange. Apart from this, Robinhood has public financial statements.
Robinhood is a US-regulated broker, which is a critical safety indicator.
The fees at Robinhood are excellent. There is no inactivity or withdrawal fee while trading US stock is commission-free. This broker has an easy to understand web and mobile platforms. The account opening process is simple, fast, and fully digital.
There are some drawbacks to Robinhood. Most of the tradable products are limited to the US market. Customer service is available, and you can reach them by e-mail. As such, you will have to wait for some time to solve a problem. Also, the educational texts are useful, but experienced traders won't find any relevant information in it.
Robinhood is excellent for beginners and for those looking forward to trading US stocks for free.
Compare Fidelity With Other Brokers
The mission of Business24-7 is to provide comprehensive, unbiased ratings and reviews of online providers. User experience, the mobile experience, customer service, costs and fees, security, the quality of trade executions, the products available on their platforms are all part of our six-month evaluation of a providers’s platform. The rating scale was based on thousands of data points that have been weighted into the scoring system.
Providers were also required to fill out a multi-point survey regarding every aspect of their platform. In-person demonstrations and evaluations were provided by the majority of the online providers we reviewed.
Business24-7 maintains high editorial standards and provides the best advice and recommendations. The products and companies that we review may compensate us when you click on the links on this website. Click below to find out more about our review process and methodology.
- 1 In A Nutshell
- 2 1. Fees and Spreads
- 3 2. Account Opening
- 4 3.Withdrawals And Deposits
- 5 4. Trading Platform
- 6 5. Mobile Trading Platform
- 7 6. Desktop Trading Platform
- 8 7. Markets And Products
- 9 8. Research
- 10 9. Customer Support
- 11 10. Education
- 12 11. Safety
- 13 Bottom line