Robinhood Review 2024

Robinhood was founded in 2014 and is a popular broker that is regulated by the Securities and Exchange Commission (SEC). It has become one of the top brokers, with more than 15 million people using Robinhood as their preferred trading app. One of the best things about the app is its intuitive user interface and the fact that users can trade stocks, options, ETFs, and cryptocurrencies with $0 commission fees.

If you are considering using Robinhood to trade crypto, we have put together a comprehensive review of all the app has to offer and what to watch out for.

Robinhood Main Features and Highlights

Investors with very little money can open a Robinhood avoid and account fees. Robinhood doesn’t have a minimum balance requirement, so you can start investing in your account right away. Another exciting feature is that the app also allows you to buy crypto; users can choose to purchase 19 different cryptocurrencies.

It is also possible to purchase fractional shares. For shares that would normally be outside your budget, you can buy a fraction of the more expensive shares if you wish to do so. With the help of fractional investments, you can easily build a diversified portfolio, and a lack of funds will not prevent you from holding a share of the companies you would like to invest in.

Moreover, users have easy access to the funds in their respective Robinhood accounts. More than 75,000 ATMs within the Robinhood network allow users to withdraw money from their accounts without paying a fee.

What are the Advantages and Disadvantages of Using Robinhood?

There are perks to using Robinhood. Apart from being a mobile-first platform, the broker does an excellent job in providing a simple-to-use interface. However, there are still some drawbacks that hold the platform back.

Pros & Cons

What is Robinhood and How Does it Work?

Robinhood is a fintech company that operates a commission-free online discount brokerage. Investors can join the brokerage to buy stocks, exchange-traded funds (ETFs), options, and more through its web and mobile-based platform. As mentioned above, its customers can also invest in a selection of popular cryptocurrencies.

Robinhood generates revenue by investing clients’ funds at a higher interest rate. The company also generates revenue through its premium services Robinhood Gold and debit card fees. Overall, it works similarly to almost all other investment platforms, only without the commission fees. You are free to use any investment technique and buy and sell shares as you please.

If you would like to join Robinhood and begin trading, follow the steps below:

For inexperienced investors and avid traders, Robinhood is best. Investors can effectively use this brokerage commission-free as there are no recurring base account fees and no trading costs.

Robinhood Products and Trading Options

This section examines the exciting products and trading options offered by Robinhood. Below is a list of the pros and cons of the products offered by the platform.

Cryptocurrency support

Unlike many competing brokers, Robinhood offers support for cryptocurrencies through a separate section for accounts called Robinhood Crypto. Similar to other providers, Robinhood does not charge commissions when buying or selling cryptocurrencies.

Experienced cryptocurrency traders should be aware that only a small number of digital currencies are supported by Robinhood and that customers still need to be able to withdraw funds to other crypto wallets. Users will need to exchange their coins for cash and then transfer the proceeds to their external accounts.

Technical charting

Robinhood users can access advanced charting technology. This allows you to analyze stocks and other asset classes in more detail and create customized charts.

Robinhood Cash Card

The Cash Card, a Mastercard-powered debit card that allows users to earn rewards in the form of stocks and cryptocurrencies for their spending, is an exciting product offered by Robinhood. Users round up their change from eligible purchases and pay it into a weekly roundup pool. Roundups are set at $100 per week, and incentives are capped at $10 per week.

Robinhood’s Cryptocurrency Selection

Since it does not charge any fees for buying or selling cryptocurrencies, Robinhood is very profitable as a cryptocurrency broker. Buying on many exchanges can cost up to 5%, so Robinhood is absolutely worth considering.

Bitcoin (BTC), Ethereum (ETH), Cardano (ADA), Solana (SOL), Dogecoin (DOGE), Polygon (MATIC), Shiba Inu (SHIB), Avalanche (AVAX), Ethereum Classic (ETC) and Compound (COMP) are among the supported cryptocurrencies.

How Does Robinhood Compare to Other Brokers?

Below we have created a table that compares Robinhood to three of its main competitors.

Robinhood Fees Review

Individuals can trade the US stock market with Robinhood without incurring withdrawal or inactivity fees. The trading platforms for smartphones and the web are intuitive and beautifully designed. Account opening is quick, easy, and completely digital.

On the downside, Robinhood only offers a small selection of assets and is primarily focused on the US market. Only email is available for customer service, which can be a bit sluggish. The selection of educational materials is limited.

Below is an overview of the types of fees and the cost:

Robinhood does not charge a commission for trading US stocks, options, and cryptocurrencies. Nevertheless, Robinhood also offers additional paid services.

The next table is a fee comparison between Robinhood and eToro.

Stock fees and ETF fees

By using Robinhood, users can trade US stocks (and ETFs) for free, which will undoubtedly save a lot of money.

Standard margin rate

10.5% is the standard margin, which is high. However, the cost of margin trading is $5 per month for Robinhood Gold customers, with an annual fee of 0% for amounts under $1,000 and 6.5% for amounts over $1,000.

Crypto fees and spread fees

Almost all US states currently allow free cryptocurrency trading through Robinhood.

Although Robinhood advertises that it offers cryptocurrency trading for free, there are still costs associated with using this platform. Users cannot buy or sell cryptocurrencies at the same price, even if there are no direct fees. There are also additional costs to consider, as the buying rate for Bitcoin and other cryptocurrencies on Robinhood is about 0.1% higher than the standard rate available on most other exchanges.

Non-trading fees

Robinhood offers low non-trading costs. There are no account fees, deposit, withdrawal, or inactivity fees.

Robinhood Account Types

Robinhood offers two types of accounts. We describe each account in detail below:

Robinhood Basic (free):When you sign up, you can start using the instant account right away. With this account, you can:

· Make instant deposits up to $1,000 (instead of having to wait the usual 5-6 days for ACH to clear).

· Get access to funds after selling.

· Enjoy longer trading hours.

Robinhood Gold ($5/month, $2,000 minimum):Robinhood Gold provides users with more resources, information, and services to better manage their investments. Gold accounts grant users access to four premium features, as well as increased buying power based on account size and higher deposit limits.

How to Open a Robinhood Account?

The account opening process is simple, fast, and completely digital. Submitting your application takes about 10 minutes, and it takes less than a day for your account to be approved.

Opening a Robinhood account in the US requires that you:

• Above the age of 18

• Hold a valid security number

• Reside at a US address

• Are a US citizen, resident, or hold a valid US visa

To complete the Robinhood account opening:

1. Enter your contact information (i.e., address, date of birth, and Social Security number).

2. Briefly answer the questions about your experience trading.

3. Use your driver’s license, ID card, or passport to confirm your identity.

Robinhood Deposit & Withdrawal

Below is a list of the pros and cons of Robinhood’s deposits and withdrawals:

Robinhood deposit fees and options

Deposits on Robinhood are free of charge. However, neither credit/debit cards nor electronic wallets are available to consumers. All deposits must come from a bank account.

How to make a deposit on Robinhood

In order to make a deposit from an iOS, Android, or on the web, you must:

Robinhood withdrawal fees and options

There are no fees for ACH withdrawals at Robinhood. Still, wire transfers are expensive; a domestic transfer costs $25, and an international transfer costs $50.

If you deposit money but do not use it for trading, you can only withdraw it after five business days, and there is a daily withdrawal limit of $50,000. Only accounts in your name are eligible for withdrawals.

How to withdraw money from Robinhood?

How long does it take to withdraw money from Robinhood?

Approximately three business days.

Are profits made by trading on Robinhood taxable?

On your tax return, you must report all of your income, including any gains from the sale of Robinhood stock. If you fail to declare your income, you may face disadvantages, such as tax penalties.

Robinhood Trading Platform Review

The web platform is user-friendly and satisfies fundamental investor requirements.

Robinhood web trading platform review

The simple and user-friendly interface of the Robinhood trading platform makes buying and selling stocks, ETFs, and cryptocurrencies incredibly easy. However, there are only a limited number of order types on the platform.

Is Robinhood beginner-friendly?

Robinhood is great for beginners; however, there is a limited selection of cryptocurrencies available.

Robinhood design and navigation

Although some broker websites can have complex user interfaces, Robinhood prides itself on its straightforward and customer-focused design.

Login and security features

Your account password is never kept in plain text and is always encrypted using industry-standard BCrypt hashing technology. Your social security number and other private information are encrypted before it is stored.

Search functionality

In order to use the search functionality, select the magnifying glass in the upper right corner to open the search bar and discover the “Trending Lists” on Robinhood. Scroll down to the “Trending Lists” on your browser’s “Invest” tab.

Alerts and notifications

You can sign up for price alerts to keep track of changes in the prices of the stocks, ETFs, and digital currency assets you own or are interested in.

Portfolio management

You can rearrange the stocks in your watchlist by tapping on a stock and dragging it to another location in your watchlist in your mobile app. However, the types of assets in your watchlist cannot be rearranged. Your actively monitored cryptocurrencies are displayed first, followed by your stocks and options contracts.

Earning reports & fees breakdowns

The news area of the Robinhood website contains earnings reports and fee breakdowns.

Robinhood App Review

You will find that registration and account opening is quick and easy. Your personal information, contact information, social security number, and how you want to fund your account will be entered into the app within minutes. According to the company, consumers who have been accepted are notified in less than an hour and can then begin banking.

The app supports market orders, limit orders, stop limit orders and stop orders.

Robinhood Desktop Review

“Robinhood for Web” is the name of Robinhood’s desktop web application. To use this feature, you must log in through the Robinhood website. After you log in, you are greeted by a simple but elegant layout that is easy to use and navigate.

The platform is easy to use thanks to the numerous advancements and interesting features that Robinhood keeps providing to its customers. It’s easy to switch between the mobile and web versions of the Robinhood app once you are familiar with the look and feel of the mobile app.

Is It Easy to Trade on Robinhood?

For inexperienced investors, Robinhood makes the process simple. In contrast to Robinhood’s incentives to trade frequently, younger investors benefit most from a buy-and-hold approach to maximize compound interest.

Overall, crypto trading on Robinhood is simple.

Market Order

You can place a market order in your Robinhood account by selecting the number of shares (whole or fractional) or the dollar value of your order. Users must place a limited order if they wish to buy at a specific price.

Limit Order

Due to the extreme volatility of the market, you must set a limit price for each options trade on Robinhood. You can set a limit price with a buy limit order, which should be the highest price you are willing to pay for a contract. Only contracts at or below your limit price will be bought.

Stop Losses

Stop loss orders are instructions that a trader gives to his broker under certain conditions. As soon as the stock price exceeds the stop price, stop orders are converted into market orders, which are executed at the next price. The stop price can be any price, and it can be added to buy or sell orders for the stock.

How to buy cryptocurrency using Robinhood

Follow the steps below to buy crypto:

How to sell cryptocurrency using Robinhood

Follow the steps below to sell crypto:

Trading Tools and Charting

Robinhood offers several different trading tools and charts, including:

Advanced charts

All consumers can view, research and analyze stock prices using advanced charts, which helps them identify trends and increase their confidence in trading. Especially important for experienced and active traders are features that help them make quantitative and logical decisions instead of occasionally relying on their gut feeling.

Analyst ratings

Analyst ratings can be used by users to decide whether to buy, hold or sell.

Candlestick charts

To identify trends in the performance of a stock, study chart indicators.

Margin trading

A margin trading account called Robinhood Gold enables buyers to quadruple their purchasing power.

Professional research

Morningstar’s premium research reports are accessible to Gold members without restriction.

Robinhood Customer Service

Live chat

You can select topics for your inquiry, such as account opening or funding, and support staff will respond to you via email. After you select a topic, you can provide an explanation of your problem.

Email

You can email the team even if you do not have an account on Robinhood. The Robinhood website provides email information.

Request a call

If you have a Robinhood account, you can ask to talk with a customer support agent on the phone.

Robinhood Customer Satisfaction

Unfortunately, Robinhood has quite a low customer satisfaction rate; this is mainly due to slow response times.

Trustpilot

On Trustpilot, Robinhood received a very disappointing score of 1.1. Customers complained about being ignored by the customer service team, and others were dissatisfied with the slow withdrawal times.

Reddit

On Reddit, there were mixed reviews but overall more positive than Trustpilot. Many Reddit users stated that the platform was good, but Robinhood’s treatment of its customers was poor.

App Store Reviews

On the Apple App store, Robinhood received a strong rating of 4.2. There were also positive mentions about the cryptocurrency selection and the margin features with Robinhood Gold.

Robinhood Education & Learning Materials

Robinhood has three primary learning resources available for customers, these include:

Robinhood Learn

All consumers have access to the educational portal known as Robinhood Learn. Users can browse hundreds of short articles explaining the fundamentals of investing, financial jargon, and market movements.

Robinhood Snacks

An easy way to remain current on the markets is to subscribe to the Robinhood Snacks daily newsletter and podcast.

Newsfeed

With the help of Robinhood’s newsfeed, all users have free access to reliable news sources. WSJ Markets coverage in-app, news from Reuters and Barron’s, as well as video from CNBC Business, Reuters, and Cheddar, will keep you up to date.

Robinhood Safety and Security

One of Robinhood’s primary goals is to provide a service that is as safe as possible for all of its customers.

Is Robinhood regulated?

Yes, it is regulated by the SEC.

Is Robinhood safe?

The platform is regarded as a secure choice for investors’ cash and securities.

Where are the funds held/stored

Hot storage (online storage) is used by Robinhood mainly to maintain daily operations.

Where is crypto stored?

Most coins are kept in a cold storage facility that is completely cut off from the Internet. This provides users with an additional layer of security.

How am I Protected with Robinhood?

Users of Robinhood are protected in the following ways:

Securities and cash are protected by SIPC

As a member of the Securities Investor Protection Corporation (SIPC), Robinhood users are protected up to $500,000 (including $250,000 for claims involving cash).

Two-factor authentication

By requiring two forms of identification to access your Robinhood account – two-factor authentication (2FA) helps protect your account.

Encryption

Your social security number and other sensitive data is encrypted before it is stored.

Robinhood Background

In the US, Robinhood gained popularity thanks to well-known investors like Intex and even A-listers like Snoop Dogg. The free stock trading app, which allows users to trade stocks without commissions, gained a lot of attention in the design community after winning the 2015 Apple Design Award.

The US state of California is home to the headquarters of Robinhood, a publicly traded company. At the time of writing, the CEO is Vlad Tenev.

How Does Robinhood Make Money?

Although Robinhood does not charge its customers directly for transactions, market makers and high-frequency trading firms are Robinhood’s main sources of revenue. In addition, Robinhood generates revenue from interest on securities and margin loans.

The company also generates revenue from its gold subscription service.

Robinhood Alternatives to Consider

If you’re looking for a replacement for Robinhood, you should check out SoFi or Wealthsimple.In addition to cryptocurrencies, SoFi and Wealthsimple also offer exposure to conventional financial markets. However, SoFi and Wealthsimple, like Robinhood, do not truly offer its users real ownership of their cryptocurrency, and you cannot withdraw cryptocurrency from the site.

On the other hand, if you’re looking for more direct crypto ownership (but don’t have stock trading options), you should check out a crypto exchange like Coinbase.

Should You Invest with Robinhood?

Robinhood is a smart choice if you value a user-friendly trading environment, a mobile-friendly interface, or the ability to trade cryptocurrencies. But now that many online brokers have followed Robinhood in eliminating commissions, inexperienced investors can shop around for the broker that suits them best.

Bottom Line

Robinhood is a broker you should look into if you want to invest in stocks and ETFs in a taxable account with a modest amount of money. Just be aware that you will not be able to start an IRA or invest in mutual funds, and don’t expect prompt customer service either.

Overall, Robinhood is a good option as it offers affordable prices and a user-friendly active trading platform. However, it does have some weaknesses, such as not offering the same impressive features or trade management capabilities as other brokers.