Robinhood Review

robinhood-review

If you are reading this, we think it is safe to say…

…you are interested in investing.

This is GREAT!

But why should you invest?

Here are three reasons:

  1. People invest to make money with their money;
  2. Investing can help you save for things like a house, vacation, or retirement; and
  3. Investing allows you to help companies and industries you are passionate about.

One rule of thumb is to invest 5% to 10% of your monthly income.

Another rule of thumb is to keep enough money to pay your bills.

Accordingly, any great investment strategy should consider:

  • Your current financial situation;
  • Your financial goals; and
  • Your timeline and risk tolerance.

Are you young? Start investing TODAY.

Are you old? Start investing TODAY.

Whatever your situation, the answer is to invest TODAY.

If you have never invested before in your life…

…we have news for you.

There are brokerages out there that allow you to invest for free and with any amount of money.

One of those brokerages is called Robinhood.

And today, we are here to give you our Robinhood review.

So, if you are procrastinating on your financial future…

…it ends today.

Robinhood Overview

Robinhood is an app that needs no introduction.

Founded in 2013, Robinhood raised $539 million in venture capital funding.

The discount broker burst onto the scene in 2015.

Currently, the company boasts over 5 million users.

That amount exceeds that of popular discount broker E*Trade.

What makes Robinhood so popular?

The company provides fee-free trading.

If you are an experienced trader…

…you know fees can add up fast.

Robinhood eliminates this cost.

The service proves to be one-of-a-kind by cutting out nearly all costs associated with investing.

robinhood-review

Robinhood Features

Stock Trading

Are you ready to trade stocks?

Me too.

Here is how you start:

  • Open the Robinhood app.
  • Enter your password (or fingerprint).
  • Access your account.

Note there is no “trade” button in the menu.

Instead, simply select the “search” icon.

From there, you can find any stock.

The process is delightfully easy.

And do not forget…

…stock trades are entirely free.

If you purchase a $20 stock, you do not want to pay a $5 fee!

You would not recoup that money until the stock price increases by 25%.

Apart from free trades, the platform supports:

  • Market orders;
  • Limit orders;
  • Stop-limit orders; and
  • Stop orders.

You can set these options to “good-for-the-day” or “good-till canceled” parameters.

robinhood-data

Options Trading

Options trading is new to Robinhood.

You can access no-fee contracts.

These contracts include:

  • No commissions;
  • Zero per-contract fees;
  • No exercise fee; and
  • Zero fee assignments.

Options trading includes useful filters and advanced trading strategies.

Additionally, you can trade multi-leg options strategies.

You can trade these strategies in a single order.

You can also monitor complex contracts together.

If you are new to investing, we advise against options trading.

But if you are comfortable trading options…

…Robinhood can significantly increase your margin.

Cryptocurrency Trading

Did we mention that you can trade cryptocurrency with Robinhood?

Because you can.

You can access six of the most popular currencies, including:

  1. Bitcoin;
  2. Bitcoin Cash;
  3. Ethereum;
  4. Ethereum Classic;
  5. Litecoin; and
  6. Dogecoin.

Access may vary depending upon your state.

About 50% of U.S. states can access Crypto trading.

If you do not fall in one of these states…

…you can access price and market data for 16 cryptocurrencies.

The primary benefit of trading Crypto on Robinhood is fee-free trading.

You can trade 24 hours a day, 7 days a week.

Robinhood Gold

Are you VERY serious about trading?

Because Robinhood offers a premium service called “Robinhood Gold.

Robinhood Gold is one way the company sponsors fee-free trading.

The Gold account is better for advanced, active traders.

The most significant benefit of Gold is access to margin.

What is margin?

If you are asking, Gold is not for you!

But FYI – margin gives you the ability to buy and sell stocks with credit.

If you go for the margin account, there is a $2,000 minimum balance required.

The minimum balance is required by federal regulations.

Unlike other margin accounts, you do not pay interest.

Your margin account is covered by the flat monthly fee.

Gold also provides access to extended-hours trading.

Extended-hours trading includes:

  • 30 minutes before market open; and
  • 2 hours after market close.

This feature allows you to execute trades before others.

Gold includes instant access to deposits.

Without Gold, there is a three-day hold on deposits.

Robinhood Snacks

Robinhood recently acquired the company MarketSnacks.

MarketSnacks includes a financial news podcast and newsletter.

The company is now called Robinhood Snacks.

This feature promises, “digestible and easy to understand financial news you’ll enjoy.”

The podcast includes a breakdown of the top 3 business stories in 15-minutes.

robinhood-snacks

Robinhood Learn

Let us talk about money.

Robinhood provides in-depth financial information.

This information is super easy to understand.

The writes include those that have worked for the Wallstreet Journal, Forbes, and Bloomberg.

But this time, you will not need to decode each article.

You can educate yourself on topics like:

  • What is an IPO (Initial Public Offering)?
  • What is a Compound Annual Growth Rate (CAGR)?
  • The difference between Bull and Bear markets.
  • What is an Option?
  • What is a Bond?

If you cannot answer these questions…

…Robinhood has you covered!

You can even search for topics you want to learn.

Robinhood Blog

The Robinhood Blog is known as “Under the Hood.”

Here you can stay current on all things Robinhood.

These updates include things like:

  • Robinhood introduces messages
  • Robinhood Raises $323M to Democratize Finance for All
  • Nasdaq Level 2 Market Data is Here

The blog is updated monthly (on average).

Visiting the blog can help you get the most out of your account.

Robinhood Trading Platform & Tools

Robinhood offers the downloadable mobile app (of course).

The company also has a web platform.

Both platforms have similar offerings, but we give the app a slight edge.

Robinhood is a bit skimpy on trading tools.

Instead, the company focuses on a minimalistic experience.

The real focus of Robinhood is centered around free trades.

For basic stock trading, Robinhood has what you need.

Robinhood is easy, fast, and easy to use.

Here are some of the most useful features:

Watch Lists

The watchlist functionality is basic.

You can customize with a few optional columns outside of the last price and percent change.

One drawback is that you are limited to one watch list.

Stock Charts

You can pull stock quotes here.

But you are limited to six default date ranges.

There is also no room for technical analysis.

However, there are free options outside of the Robinhood app.

We recommend Yahoo Finance or the CNBC mobile app.

Price Alerts

You can enable notifications for your positions or all stocks on your watch list.

Robinhood Fees

This section should be your favorite yet.

Robinhood is committed to 100% commission-free trading.

Commission-free trading includes:

  • Stocks;
  • Options;
  • Exchange-traded Funds (ETFs); and
  • Cryptocurrency.

If you trade frequently, the savings can be HUGE.

If you infrequently trade with small amounts, the savings can also be HUGE.

Every single dollar you save is a dollar added to your return.

While Robinhood does not charge fees, there are fees required by the SEC.

The U.S. Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) charge a small fee for stock sell orders.

These organizations charge fees for all sell orders, regardless of the broker.

Robinhood does not receive money from these charges.

The company is merely responsible for collecting and remitting the money.

These fees work as follows:

  • SEC: $13.00 per $1,000,000 of principal.
  • FINRA: $0.000119 per share.

Long story short…

…trades on Robinhood are completely free.

Robinhood App

Robinhood specializes in its mobile platform.

The app is highly intuitive and easy to use.

The app is available on iOS and Android.

You can access trades and account information anywhere.

This convenience is a major reason Robinhood is so successful.

You can execute trades anytime and anywhere.

The flexibility provided with this feature is outstanding.

Whether you are a new investor or trading veteran…

…the app can work for you.

So, if you are seeking a new app to execute trades, check out Robinhood.

robinhood-app

Robinhood Customer Service

Robinhood’s customer service is relatively limited.

This means you must be somewhat self-sufficient.

You can rely on the support as necessary, but larger platforms offer more robust customer service.

Robinhood handles all inquiries via email.

You may not find this to be a huge sticking point.

However, this limited option is less than ideal.

But remember, this is one method Robinhood works to allow fee-free trades.

Back to the “you must be somewhat self-sufficient” comment.

Robinhood offers a reliable help center that provides answers to many questions.

There are sections for the following categories:

  • Get Started: Welcome! Here’s everything you need to start investing.
  • Invest on Robinhood: Learn how to invest in stocks, options, and cryptocurrencies.
  • Tools & More: Discover powerful tools to help you invest with confidence.
  • Manage Your Account: Update your account and maintain your portfolio.
  • Troubleshooting Questions: Troubleshooting? We’ve got you covered.
  • Tax Questions: Get answers to commonly asked questions about your Robinhood tax documents.

Robinhood Security

With Robinhood, you can trade with confidence.

The company ensures that your account is safe and secure.

From the Robinhood website:

“SEC-registered broker-dealer, and a member of both the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC). This means stocks and options in your account are protected up to $500,000 (including $250,000 for claims for cash). For details, check out the SIPC website, and for more information on Robinhood Financial, you can find us on FINRA Broker Check.”

The Robinhood Security Team employs high-level measure and industry best practices to protect you.

Here are some of those securities features (via Robinhood.com):

  • Your account password is hashed using the industry-standard BCrypt hashing algorithm, and it’s never stored in plaintext.
  • Sensitive details, such as your social security number, are encrypted before they’re stored.
  • Our mobile and web applications securely communicate with our servers using the Transport Layer Security (TLS) protocol with up-to-date configurations and ciphers.
  • Once we verify your banking credentials, we’ll never access them again. We use trusted third-party integrations to access information about your bank account, such as your account number and available balance.

Finally, you can secure your mobile app using TouchID, FaceID, or a custom pin code.

What we love about Robinhood

Robinhood is extremely investor friendly.

You will save money

You can eliminate trading fees by using Robinhood.

Stocks, ETFs, options, cryptocurrency?

All these are traded for FREE.

Investors love this feature because it is incredibly easy to run up a huge bill investing.

The “cheap” brokerages charge $5 per trade.

But at Robinhood?

You pay nothing.

No minimum balance requirement

You can open an account with no minimum balance requirement.

This feature is another reason why Robinhood is investor-friendly.

And Robinhood provides instant access to your deposited funds.

It is easy to use

The app has a streamlined interface making it easy to use.

What we don’t love about Robinhood

Lacking customer service

The customer service options are quite limited.

No mutual funds

Robinhood offers many investment options. Unfortunately, mutual funds are not one of those options.

You can only have one account

You can only have one individual taxable account, which is not ideal.

Sign up for Robinhood

Does all this sound good?

Too good to be true?

Well, we can assure you, it is TRUE.

Here is what you need to get started with Robinhood (via Robinhood.com):

  • Be 18 years or older;
  • Have a valid Social Security Number (not a Taxpayer Identification Number);
  • Have a legal U.S. residential address within the 50 states or Puerto Rico (we may make exceptions for active U.S. military personnel stationed abroad); and
  • Be a U.S. citizen, U.S. permanent resident, or have a valid U.S. visa*.

Here is what you need to open your account:

  1. Apply through the Robinhood app.
  2. You will receive an email within one trading day either confirming your application is approved or asking for a little bit more information.
  3. If Robinhood requests a document to verify your identity, the company will include instructions for uploading your documents securely. Please gives us five to seven days to review the materials and open your account.

Is Robinhood right for you?

Let’s get one thing straight…

…Robinhood is truly free.

There are no hidden fees.

You can trade without burning a cent on fees or commissions.

There are some trade-offs with fee-free services.

For instance, you can find better trading tools, research, and investment options elsewhere.

But if the cost is your main concern, Robinhood is an excellent choice.

The company frequently adds new features and improves existing ones.

Bottom line?

The service offers excellent value.

You can’t beat free, right?

Creating your Robinhood account takes less than 5 minutes.

You can do it in 5 easy steps:

  1. Create your Robinhood account
  2. Enter your contact information
  3. Verify your identity and social security number
  4. Fund your account
  5. Download the Robinhood app

The answer to ‘Is Robinhood right for you?’ comes down to one thing.

That thing is what you need in a trading platform.

Remember the old saying, “Don’t knock it until you try it?”

That sayings applies here.

Robinhood is 100% free.

Robinhood

7.2

Overall Service

8.0/10

Commissions & Fees

10.0/10

Platform & Tools

8.0/10

Special Features

4.0/10

Customer Service

6.0/10