The transformative influence of financial technology on ever day life cannot be overemphasized. From banking and investment apps to robo-investing and budgeting apps, as well as the rise of cryptocurrencies and new online brokerages, the fintech industry is witnessing significant changes.
At the forefront of this innovation stands Robinhood. Since their launch in 2013, Robinhood has been the undisputed leader in eliminating commissions, allowing users to trade 24/7, and making it easy to trade crypto, options, and manage your IRA. But before you open a Robinhood account, it is smart to be asking these 2 questions:
Is Robinhood Safe? Is Robinhood Legit?
It is always smart to question the safety and reliability of any type of investing platform before you send them your money. Here are the top 5 reasons we feel that Robinhood is safe and legit:
- Robinhood now has over 25 million users as of June 6, 2025.
- Robinhood has over over $221 billion in assets under custody as of May 31, 2025.
- Robinhood is considered one of the largest and most well known fintech platforms, with customers’ funds protected up to $500,000 for securities and $250,000 for cash claims, thanks to membership in the Securities Investor Protection Corporation (SIPC).
- I personally have had accounts with Robinhood since 2014 and have made over 500 trades of both stocks, ETFs, options and crypto. I have never had any problems with trade executions or the ability to withdraw cash.
- I have even tested their crypto price execution by simultaneously buying $1,000 of Bitcoin on Robinhood and on my Coinbase account. I waited a day and then simultaneously sold the Bitcoin. On Robinhood I ended up getting better prices on both the buy and the sell of about 3% so that meant I made $30 more on that trade on Robinhood than Coinbase.
- They are a publicly traded company with a market cap of $50 billion.
ALERT: Are you a U.S. citizen, permanent resident or have a valid US visa? Then you can open a Robinhood account. If you are Canadian, see our MooMoo Review and see how you can get 15 stocks for free. If you are not US or Canadian, then see our eToro Review (and take advantage of their free stock offer to non-U.S. citizens!
My Experience with Robinhood
I have had a Robinhood account since 2014 and I have made hundreds of trades, so I can assure you that Robinhood is definitely both legit and has the necessary policies (with federal regulations) to be a safe brokerage. I have never had a problem executing a trade. I have received the free stock Robinhood promised for opening an account and I have received more free stock for referring friends every year.
And in terms of their platform’s reliability, I have seen the app down for probably about a total of 5-15 minutes a couple of times over the years. But I have also seen Facebook/Meta and Amazon down from time to time so I don’t think that is a reason for concern.
In addition to my personal experience showing it is safe, you can rest assured that your first $500,000 of cash and stocks is insured by the SIPC. According to their website “Robinhood Financial LLC and Robinhood Securities, LLC are members of SIPC so securities in Robinhood accounts are protected up to $500,000. For details, please see www.sipc.org. Robinhood also makes additional coverage available.”
Robinhood has turned the investing world upside down. Just like Uber changed the way people use taxis, Robinhood has changed the way people invest. With Robinhood:
- You no longer need a $1,000 or more to open a brokerage account. Just $10 is enough to get started.
- You no longer need to pay commissions.
- They pay interest on cash (most of brokerage apps don’t)
- You can now buy a half of a share or some other fraction of you favorite stocks like Apple or Amazon or Netflix.
- Best of all, when you open a new Robinhood account and fund it with just $10 you receive a FREE stock in your Robinhood account (valued at $5 to $200).
- Once you have your account you will also get your own referral link. Then, when you refer your friends, both you and your friends will get more free stock (up to $1,500 per year)!
With these innovations in investing (especially being commission-less and their referral program), Robinhood has quickly become the fastest-growing brokerage service in the United States.
But we’re here to answer your questions about the overall safety of Robinhood. Is Robinhood legit? Is the Robinhood app safe?
Table of Contents:
- About Robinhood
- Why Choose Robinhood?
- Is Robinhood Safe?
- Can Robinhood be Trusted?
- Is Robinhood Good for Beginners?
- The Robinhood App Features
- How Does Robinhood Make Money?
- What Stocks Should I Buy?
About Robinhood’s History
Founded by Baiju Bhatt and Vladimir Tenev, Robinhood has seen significant growth since its inception in 2013.
The concept was quite simple: Traditional brokerage firms were charging excessive commissions on every transaction and ripping off their customers.
The founders leveraged their experience on Wall Street, returned to Silicon Valley, raised some money and launched the first COMMISSION-LESS, APP-BASED brokerage. They now have over 25 million users. That’s proof positive of their product and their concept. And it also should tell you that Robinhood is legit option for investors in the US looking for access to public markets.
In fact, Robinhood recently surpassed one of the most well-known brokerages, E*Trade, in terms of the number of active investment accounts.
But their explosive success begs the question: is Robinhood a safe app to use? What are the risks involved with Robinhood?
You will find the answers to all of this and more in this Robinhood Review. Simply read on…
Why Choose Robinhood?
Robinhood was the first stock brokerage app that did NOT CHARGE COMMISSIONS.
The other reason to choose Robinhood, is they give you free stock when you open an account; and they give you more free stock when you refer a friend that opens an account. Learn how to get up to $1,700 in free stock with Robinhood.
What that means is that users can open an account with literally just a few dollars and start buying shares without paying any commission with each trade.
The Robinhood app offers a commission-free trading model that provides users access to trade securities at no cost. Robinhood began exclusively as an iphone app but then quickly rolled out their Android versions, as well. The app allows users to invest in U.S. stocks, ETFs, options, and cryptocurrencies.
One thing to know is that Robinhood is for the people–That is why there are no account minimums and no fees to trade with Robinhood.
Both features are a rarity in the fintech space. You can trade several all U.S. listed stocks and ETFs. And now you can also trade cryptocurrency and even options.
Robinhood also recently unrolled their Retirement features. You can sign up and contribute to a traditional or Roth IRA, and Robinhood will match 1% of your contributions!
Robinhood also offers Robinhood Gold account which is a premium option that allows you to trade on margin at a lesser cost. But beginning investors don’t need to worry about that or pay for that.
So, what makes Robinhood so popular?
Robinhood is famous for its commission-free trading, easy application process, and intuitive mobile platform. But best of all, they give you a free share of a stock when you open and fund your account!
ALERT: After the commotion caused by the Silicon Valley Bank collapse, many investors are left wondering whether their money is safe with the institutions they use.
- When you open a Robinhood IRA, your money is protected by the SIPC up to $500k, including $250k coverage for cash. PLUS, when you open a Robinhood IRA and brokerage account, your IRA contributions are matched at 1% and you can earn up to $1700 a year in FREE STOCK by referring friends!
How Do I Get up to $1,700 in FREE STOCK with Robinhood?
To open a Robinhood account, all you need is your name, address, and email. To get your free stock you will need to fund your account with at least $10 within a few days of opening so you will also need your bank account routing and account number.
As its current promotion, Robinhood will immediately give you FREE MONEY (between $5 and $200) to invest in a set list of stocks when you open a new account. You will be given your unique referral link. You will receive more free money (again valued at $5 to $200) for each person you refer. The more people you refer, the more you get up to a max of $1,500 a year. To learn more, visit Robinhood's free stock promo page below.
Why do they give away so much free stock? Because they spend their advertising dollars this way instead of buying TV, radio, print, or online ads! They WANT you to refer friends!