Robinhood is a US zero-fee discount broker established in 2013. The company is regulated by top-tier financial authorities, such as the US Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
Besides the brokerage service, Robinhood introduced a Cash Management service, which can earn interest on your uninvested amounts. It's a great and unique service. You can read more details here.
BrokerChooser is committed to bringing high transparency and clarity to our customers not just brokers, but also our partners: BrokerChooser's Advertiser Disclosure.
We selected Robinhood as Best broker for beginners for 2020, based on an in-depth analysis of 57 online brokers that included testing their live accounts. Check out the complete list of winners.
Robinhood pros and cons
Robinhood offers commission-free US stock trading without withdrawal and inactivity fees. Its mobile and web trading platforms are user-friendly and well designed. Account opening is seamless, fully digital and fast.
On the downside, Robinhood provides only a limited selection of assets, focusing mostly on the US market. Customer support is available via e-mail only, which is sometimes slow. It offers a few educational materials.
|• Free US stock and ETF trading||• Limited product range|
|• Great mobile and web trading platforms||• Weak customer support|
|• Fast and fully digital account opening||• Few educational materials|
|🗺️ Country of regulation||USA|
|💰 Trading fees class||Low|
|💰 Inactivity fee charged||No|
|💰 Withdrawal fee amount||$0|
|💰 Minimum deposit||$0|
|🕖 Time to open an account||1 day|
|🎮 Demo account provided||No|
|🛍️ Products offered||Stock, ETF, Options, Crypto|
Trading US stocks and ETFs is free at Robinhood. It's also great that Robinhood doesn't charge an inactivity or withdrawal fee. On the negative side, there is high margin rates.
|• Commission-free US stock and ETF trading||• High margin rate|
|• No fee for deposit or withdrawal|
|• Transparent fee structure|
|Assets||Fee level||Fee terms|
|US stock||Low||Stock and ETF trading is free|
|Mutual fund||-||Not available|
|Inactivity fee||Low||No inactivity fee|
How we ranked fees
We ranked Robinhood's fee levels as low, average or high based on how they compare to those of all reviewed brokers.
To get things rolling, let's go over some lingo related to broker fees. What you need to keep an eye on are trading fees, and non-trading fees.
- Trading fees occur when you trade. These can be commissions, spreads, financing rates and conversion fees.
- Non-trading fees include charges not directly related to trading, like withdrawal fees or inactivity fees.
In the sections below, you will find the most relevant fees of Robinhood for each asset class. For example, in the case of stock investing the most important fees are commissions.
We also compared Robinhood's fees with those of two similar brokers we selected, Webull and TD Ameritrade. This selection is based on objective factors such as products offered, client profile, fee structure, etc. See a more detailed rundown of Robinhood alternatives.
To have a clear overview of Robinhood, let's start with the trading fees.
Yes, it is true. Robinhood charges zero commission for US stock, options and crypto trading.
Stock fees and ETF fees
Robinhood has generally low stock and ETF commissions. Robinhood charges no fees on US stocks, saving you a lot.
In addition to US stocks and ETFs, you can also trade foreign stocks through ADRs, but this involves a high fee of $50 per trade.
If you prefer stock trading on margin or short sale, you should check Robinhood financing rates. A financing rate, or margin rate, is charged when you trade on margin or short a stock. This basically means that you borrow money or stocks from your broker to trade. For this borrowed money/stock you have to pay interest. This is the financing rate. It can be a significant proportion of your trading costs.
Robinhood financing rates are high.
|USD margin rate||8.0%||7.0%||10.3%|
The margin rate is calculated as the following: there is a $5 per month fixed fee and there is no annual charge if you use margin up to $1,000. If you use a margin above $1,000, there is an additional 5% annual charge.
In our example, we calculated with a $2,000 margin position: you pay $60 annually as the fixed fee, which is 3% of $2,000, and an additional 5% annual charge.
Similarly to stocks, options trading is also commission-free.
|US stock index options||$0.0||$0.0||$6.5|
Robinhood now offers crypto trading in almost all US states.
As with other assets, you can trade cryptos for free.
Robinhood has low non-trading fees. There are no withdrawal or inactivity fees.
Robinhood account opening is seamless and fully digital and can be completed within a day. On the negative side, only US clients can open an account.
|• Fast||• Available only for US clients|
|• Fully digital|
|• No minimum deposit|
Can you open an account?
Only US citizens are allowed to open an account. However, Robinhood is planning to expand its services into Europe and other continents as well. In a significant step toward this goal, Robinhood has already received a brokerage license in the UK from the Financial Conduct Authority (FCA). The launch is expected sometime in 2020.
What is the minimum deposit at Robinhood?
There is no minimum deposit for the Robinhood Standard/Instant account.
If you upgrade to Robinhood Gold, you have to deposit a minimum of $2,000.
If you sign up, you automatically open a Robinhood Standard/Instant account. Later, you can convert your account to a Cash Account or upgrade to Robinhood Gold.
|Cash Account||Robinhood Standard/Instant Account||Robinhood Gold|
- Day trading is not limited
-Commission-free trades during standard and
- 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)
- Additional research tools, like recommendations from Morningstar
- No instant deposit, money transfer takes 4-5 days
- No leverage
- Slow settlement
- Day trading is limited
- No leverage
- Day trading is limited
One major difference involves limitations placed on day trading, i.e.when you buy and sell a stock on the same day. With the Robinhood Standard and Robinhood Gold accounts, you can perform only three day trades per week. If you do more, your account will be blocked for 90 days unless you have at least $25,000 on your account. The Cash Account doesn't have such constraints, you can carry out as many day trades as you want without a minimum required account balance.
The next major difference is leverage. Leverage means that you trade with money borrowed from the broker. At Robinhood, this is called Buying Power. With Cash and Robinhood Standard accounts you can't trade with leverage, but Robinhood Gold allows 2:1 leverage.
Third, the accounts also have different instant deposit limits.
How to open your account
The account opening process is user-friendly, fast and fully digital. It takes around 10 minutes to submit your application, and less than a day for your account to be verified.
Opening a Robinhood account in the US requires that you
- are 18 or older
- have a valid social security number
- have a legal US residential address
- are a US citizen, US permanent resident, or have a valid US visa
To complete Robinhood account opening:
- Fill in your personal information, such as your address, date of birth and social security number.
- Answer short questions relating to your trading experience.
- Verify your identity with your driver's license / identity card / passport. A photo of the documents taken with your mobile will do.
Deposit and withdrawal
Deposit and withdrawal at Robinhood are free and easy and you can use a great cash management service. On the other hand, you can use only bank transfer, and deposits above your 'instant' limit may take several business days.
|• Free withdrawal||• Credit/Debit card not available|
|• No deposit fee||• Depositing larger amounts on Robinhood Gold takes longer|
|• Cash management service||• Wire withdrawal is pricey|
Robinhood introduced recently a great Cash Management service, which can earn interest on your uninvested cash.
Deposit fees and options
Robinhood deposits are free of charge. However, you can use only bank transfer.
If you use the instant deposit option, your money arrives immediately; otherwise, the process can take 4 to 5 business days. The instant deposit function has some limitations: if you have a Robinhood Instant account, you can deposit up to $1,000 instantly, while the limit at the Robinhood Gold account is $50,000. All transfers above the limit will be credited only after 4 to 5 business days. E.g. if you transfer $1,500 to your Standard account, $1,000 will be credited immediately, while the remainder after 4 to 5 business days.
You can only deposit money from accounts which are in your name.
Robinhood withdrawal fees and options
Robinhood doesn't charge a fee for ACH withdrawals. However, wire transfers are expensive: Robinhood charges a $25 fee for domestic and $50 for international wire withdrawals.
How long does it take to withdraw money from Robinhood? Withdrawal usually takes 3 business days. There is also a withdrawal limit of $50,000 per day. Another restriction is that if you deposit money but don't use it for trading, you can only withdraw it after 5 business days.
You can only withdraw money to accounts in your name.
You can transfer stocks in or out of your account. Incoming stock transfers are free, while outgoing transfers cost $75 per transaction.
Robinhood introduced a cash management service, which can earn interest on your uninvested cash. At the time of the review, the annual interest you can earn was 0.30%.
Besides earning interest, you can use other useful services:
- Get Mastercard debit card issued by Sutton Bank
- Use the cash for paying bills or any purchases
- Free withdrawal from ATM if you choose one of the ATM in-the-network (ATMs in Allpoint or MoneyPass networks)
The uninvested cash is deposited with banks that are FDIC-insured, i.e. you are protected up to $250,000. Keep in mind that the deposits held in the same bank in another way than Robinhood's Cash Management are also included in the total cash protected up to $250,000.
The banks where Robinhood holds the uninvested cash at the time of the review: Goldman Sachs, HSBC, Wells Fargo, Citibank, Bank of Baroda, U.S. Bank.
For applying for Cash Management service, first, you have to sign up for a waitlist.
Want to stay in the loop?
Sign up and we'll let you know when a new broker review is out.
Web trading platform
Robinhood provides a safe, user-friendly and well-designed web trading platform. On the downside, customizability is limited.
|• User-friendly||• Limited customizability (for charts, workspace)|
|• Clear fee report|
|• Two-step (safer) login|
Disclaimer: Robinhood crashed three times between 03 March and 09 March 2020 not letting its clients log in and/or trade in volatile market conditions. This review and its score don't reflect these incidents yet.
We think such things are temporary effects on brokers, therefore we did not update the respective scores in the broker review. If you happen to experience another outage at this (or any) broker, contact us at [email protected].
Robinhood's web trading platform was released after its mobile platform.
Look and feel
Robinhood's web trading platform is very easy to use, providing great user experience and design.
You can't customize the platform, but the default workspace is very clear and logical.
Login and security
Robinhood provides a two-step login, which is safer than using only a username and password.
The search functions are great in that you will always find the assets you are looking for. You can do a simple search in the search bar, or search based on tags. If you click on a stock, you can see some related tags under the 'Collections' tab, e.g. the name of the sector where the company is active. If you click on a tag, you will see all stocks that share the same tag. It is a helpful feature if you want to make side-by-side comparisons. For example, if you are interested only in social media companies, you just click on that tag and you get the full list.
You can use the following order types:
- Stop Loss
- Stop Limit
- Trailing Stop
You can also set good-till-day (GTD) and good-till-canceled (GTC) order terms.
To get a better understanding of these terms, read this overview of order types.
Furthermore, you can find a very useful estimated cost tab when you place an order.
Alerts and notifications
You can set alerts and push notifications for a large variety of events:
- Dividends payments
- Price movements
- Money transfers
- Earnings announcements
- Corporate actions
In their regular earnings announcements, companies disclose their profits or losses for the period. Corporate actions include events like stock splits or corporate mergers.
Portfolio and fee reports
Robinhood's web trading platform has an easy-to-understand portfolio and fee report function. You can view the average cost of and the returns on your stock portfolio. You can also find a pie chart showing how diversified your portfolio is.
Mobile trading platform
The Robinhood mobile platform is one of the best we've tested. It is safe, well designed and user-friendly.
|• Two-step (safer) login|
|• Good search function|
Robinhood's mobile trading platform is available for both iOS and Android devices. We tested it on Android.
The Robinhood mobile platform offers more or less the same design, user experience and functionality as the web trading platform. The research functions are slightly different from the web platform, as the detailed stock screener is not available on mobile.
Robinhood's mobile trading platform provides a safe login. It employs two-step authentication, including the option to log in using biometric authentication, which is a convenient feature.
Desktop trading platform
Robinhood doesn't have a desktop trading platform.
Markets and products
Robinhood's product portfolio is limited, as it offers only stocks, ETFs, options and cryptos. Furthermore, assets are limited mainly to US markets.
Robinhood has a good selection of cryptocurrencies, but its stock and ETF product lineups lag behind.
Stocks and ETFs
Robinhood gives you access to around 5,000 stocks and ETFs. The majority of these stocks and ETFs are listed on major US stock exchanges. You can also find some non-US stocks, which are provided through ADRs rather than indirectly through foreign exchanges.
Usually, we benchmark brokers by comparing how many markets they cover. Robinhood is not transparent in terms of its market range. If you are planning to trade small US stocks or non-US stocks, it is best to contact Robinhood's customer support first.
A further note about low-priced stocks or “penny stocks”: these are stocks that have a price of less than $5 and are usually issued by small companies. Penny stocks are more volatile and therefore riskier.
Within options, you can only trade stock and stock index options. These options are not available for all stocks, only for bigger ones.
You can trade a good selection of cryptos at Robinhood. You can trade major cryptocurrencies like Bitcoin or Ethereum, and can follow with real-time data, the minor ones like Monero or Stellar.
|District of Columbia||Massachusetts||Ohio||Washington|
Robinhood is planning to expand cryptocurrency trading to more US states.
Robinhood provides a user-friendly research tool with trading recommendations, quality news, and some fundamental data. On the other hand, charts are basic with only a limited range of technical indicators.
|• Trading ideas||• Limited interactive charting|
|• Data on asset fundamentals||• No/limited set of analytic tools|
|• Quality news flow|
Just like its trading platforms, Robinhood's research tools are user-friendly. There are slight differences between the tools provided on its mobile and web trading platforms, though. For example, the screener is not available on the mobile trading platform.
If you use the Robinhood Gold service, you can use additional research tools: live market data (level II) and research reports provided by Morningstar.
You can find analyst ratings of various products by experts, which can help you make better investment decisions. These ratings show the percentage of analysts who rate the stock as buy, hold or sell. In the 'People also bought' section, you can find products related to the one you're viewing.
In late February 2020, Robinhood announced a new feature called Profiles, which enables users to customize their public profiles and search other users to see what they have invested in. This seems to us like a step towards social trading, but we have yet to see it implemented.
You can find some basic fundamental data, such as P/E, the number of employees, or market capitalization.
Charts are really basic at Robinhood. You can view past price movements of the stock you want to trade, and a few technical indicators are available if you click 'Expand'. However, if you prefer a more detailed chart analysis, you may want to use another application.
You can read a relevant news feed when you click on a product. The news feed is high quality, as it is provided by top-tier third parties such as Seeking Alpha or Yahoo! Finance.
Robinhood's support team provides relevant information, but there is no phone or chat support.
|• Fast response time||• No phone support|
|• Relevant answers||• No live chat|
|• No 24/7 support|
Customer support is Robinhood's weak point, as you can only contact the support team via e-mail but not telephone or live chat.
When you submit a request, you can choose from topics such as account opening or funding; and the support team will get back to you via e-mail. Their response was really helpful and contained all the information we requested. It took less than one day to get a response.
We also missed 24/7 support.
Once you have picked a topic, you can submit a short description of your problem.
Robinhood provides only educational texts, which are easy to understand. On the negative side, there are no other useful educational tools such as a demo account or tutorial videos.
|• Quality educational texts||• No demo account|
|• No trading platform tutorial videos|
|• No educational videos|
At Robinhood, you can learn from educational articles listed under the 'Learn' tab. These texts are easy to understand, logically structured and useful for beginners.
Robinhood is regulated by top-tier authorities, provides strong investor protection, and discloses its financial information. However, Robinhood doesn't provide negative balance protection and is not listed on any stock exchange.
|• Majority of clients belong to a top-tier financial authority||• No negative balance protection|
|• High level of investor protection||• Does not hold a banking license|
|• Financial information is publicly available||• Not listed on stock exchange|
Is Robinhood regulated?
Yes, it is regulated by top-tier financial authorities, such as the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
Is Robinhood safe?
To be certain, we highly advise that you check two facts:
- how you are protected if something goes wrong
- what the background of the broker is
How you are protected
There are two major entities within Robinhood: Robinhood Financial LLC and Robinhood Crypto LLC. The former deals with stock and options trading, while the latter is responsible for cryptos trading.
Robinhood Financial LLC is a member of the Financial Industry Regulation Authority and falls under the US investor protection scheme, the SIPC. The limit of SIPC protection is $500,000, which includes a $250,000 limit for cash.
Not all investments are protected by SIPC. In general, SIPC covers notes, stocks, bonds, mutual funds and other investment company shares, and other registered securities. It does not cover instruments such as unregistered investment contracts, unregistered limited partnerships, fixed annuity contracts, currency, and interests in gold, silver, or other commodity futures contracts or commodity options.
Robinhood Crypto LLC is not a member of FINRA or the SIPC. It means trading cryptocurrencies is not protected by any investor protection scheme.
Robinhood does not provide negative balance protection.
Robinhood is a US broker established in 2013 serving clients in the US and Australia. The longer track record a broker has, the more proof we have that it has successfully weathered previous financial crises. In this respect, Robinhood is a relative newcomer.
Robinhood is a private company and not listed on any stock exchange. Despite this, Robinhood discloses its financial statements transparently.
Being a US-regulated broker is a great sign of Robinhood's safety.
Robinhood fees are great. US stock trading is commission-free, and there is no withdrawal or inactivity fee. Robinhood has awesome, user-friendly mobile and web trading platforms. Account opening is easy, fully digital and fast.
Robinhood has some drawbacks though. Most of the products you can trade are limited to the US market. Customer support is weak; you can only reach them via e-mail and it can take some time to get an answer. It provides educational articles but little else to guide you through the world of trading.
If you want to trade US stocks for free and are looking for an easy-to-use platform, Robinhood is your best choice.