Robinhood is here to help you break into the world of investing.
With zero-commission stock trading, Robinhood can be a great option for new investors who want to start small and place trades for a handful of shares. But there's a lot more to Robinhood than just free trading.
This efficient, user-friendly platform offers investors a number of benefits such as:
- High-quality mobile investment app
- Fractional shares and cryptocurrency investing
- No fees for options trading or ETFs
Check out the full review below to help decide if Robinhood is the right fit for your brokerage needs.
Robinhood
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4.5/5
Our ratings are based on a 5 star scale.
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3 stars equals Good.
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Robinhood offers a user-friendly mobile app that allows trading in stocks, options, and cryptocurrencies.
Fees:
$0 for stocks, ETFs, and options; up to $5 monthly for Robinhood Gold
Account Minimum:
$0
Five perks that put Robinhood on our best online stock brokers list
$0 stocks, cryptocurrencies, ETFs, and options commissions: Robinhood is best known for pioneering the idea of zero-commission stock trading. While most other top brokers have followed suit, Robinhood still has a favorable fee structure. For example, in addition to not charging flat commissions on options trades, Robinhood doesn't impose a per-contract charge either. That's something that many of the best options platforms still do.
Fractional shares: Traditionally, if a stock was trading for $500 per share, you needed to have at least $500 to invest in it. Robinhood lets investors buy fractional shares of thousands of stocks, even if they have only $1 to invest. This can be an incredibly valuable tool -- it not only lets you put 100% of your money to work, but also helps create a diversified portfolio without a ton of investment capital.
Cryptocurrency trading: If you're interested in cryptocurrencies, Robinhood could be a great choice for you, as cryptocurrency trading is integrated into the company's trading platform. Customers can buy and sell Bitcoin, Litecoin, and other cryptocurrencies any hour of the day.
Cash management: Robinhood also offers an appealing cash management account that allows clients to earn returns that fluctuate with prevailing interest rates (currently 1.50% APY for regular members, and 5.00% for Robinhood Gold members, as of November 2023; subscription required) on their uninvested cash. What's more, the cash management account has no fees associated with it, including $0 ATM fees at more than 75,000 ATMs in its network.
Robinhood Gold: While Robinhood is known for being the "no fee" brokerage, it's important to mention that the company does have a premium product known as Robinhood Gold. This version of the platform costs $5 per month, but could be well worth it to active investors. Gold members get access to margin trading, including $1,000 of interest-free margin) at 8% interest (compared to 12% for non-Gold members), instant access to larger deposits (standard accounts can have up to $1,000 instantly available), and access to Morningstar stock research reports.
Commissions
Robinhood's claim to fame is its no-commission approach to trading, so this section shouldn't be too much of a surprise. The platform charges $0 for stock, exchange-traded fund (ETF), and option trades placed through its app or website.
| STOCKS AND ETFS | STOCK OPTIONS | MUTUAL FUNDS |
|---|---|---|
| $0 | $0 (no per-contract charge) | Not offered |
The $0 options trading commission is a rarity. While most of the brokers who have dropped their standard stock trading commission have also dropped the base commission on options trades, a lot of them still charge a small per-contract commission. Robinhood allows traders to buy and sell as many options contracts as they want with no commissions at all.
This brokerage account could be right for you if:
In any combination of the below scenarios or for individual needs, Robinhood is a solid pick.
- You want a broker with fewer fees: Robinhood not only offers free web- and app-based stock trading, but it also offers free options and cryptocurrency trading.
- You like simplicity: Robinhood's trading platform was designed with simplicity in mind. It's not packed with features, but what it lacks in features, it makes up for in user-friendliness.
- You want to trade cryptocurrencies or invest in fractional shares: Few brokerages allow investors to trade in both fractional shares and cryptocurrencies, but Robinhood allows clients to invest in both.
- You're a newer investor with limited capital: With the ability to buy fractional shares of stock with as little as $1, Robinhood is a good choice for investors who are just getting started.
- You want a savings and brokerage account in one: Robinhood essentially treats clients' uninvested cash as a high-yield savings account, especially for Robinhood Gold members, who receive an APY on cash balances that rivals even the best online savings banks.
- You don't want to invest in mutual funds or bonds: Robinhood may be a good option for those interested in stocks, ETFs, options, and even cryptocurrencies, but if you want to hold mutual funds or individual bonds in your brokerage account, you're out of luck.
- You want a standard brokerage account or IRA: Robinhood does offer IRA accounts for retirement. But you can't open a trust, partnership, Coverdell, 529, custodial, SEP-IRA, Simple IRA, Individual 401(k), or any other type of brokerage account through Robinhood.
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Robinhood disclosure
All investments involve risk and loss of principal is possible.
Securities are offered through Robinhood Financial LLC, member FINRA/SIPC. Cryptocurrency services are offered through an account with Robinhood Crypto, LLC (NMLS ID 1702840). Robinhood Crypto is licensed to engage in virtual currency business activity by the New York State Department of Financial Services. Cryptocurrency held through Robinhood Crypto is not FDIC insured or SIPC protected. For more information see the Robinhood Crypto Risk Disclosure.
Trades of stocks, ETFs and options are commission-free at Robinhood Financial LLC. Other fees may apply. Please see Robinhood Financial’s Fee Schedule to learn more.
Fractional shares are illiquid outside of Robinhood and are not transferable. Not all securities available through Robinhood are eligible for fractional share orders. For a complete explanation of conditions, restrictions and limitations associated with fractional shares, see the Fractional Shares section of our Customer Agreement.
Robinhood Gold is an account offering premium services available for a $5 monthly fee. Not all investors will be eligible to trade on Margin. Margin investing involves the risk of greater investment losses. Additional interest charges may apply depending on the amount of margin used. Bigger Instant Deposits are only available if your Instant Deposits status is in good standing.
Investing is risky. Bonus offers subject to terms and conditions, visit robinhood.com/hoodweek for more information. Margin is not suitable for all investors. Robinhood Gold is offered through Robinhood Gold LLC and is a subscription offering services for a fee. Brokerage services offered through Robinhood Financial LLC (member SIPC), a registered broker dealer.