Robinhood Review: What Does The US Broker Offer In 2022?

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Robinhood is an online brokerage firm that offers services to U.S traders exclusively. The broker lists thousands of international stocks, over 1,900 ETFs, and cryptocurrencies.

While Robinhood is primarily known as a stock, ETF, and options broker, the platform offers a cryptocurrency exchange and wallet, where traders can own and store cryptocurrencies.

This review focuses on how Robinhood fares as an SEC, FINCA, and SIPC regulated broker.

We explore the list of products, how you can register an account, and what sort of yield Robinhood’s Cash Management service promises traders with unused funds.

Overview

RobinhoodOverview
✒️ OverviewUS-based stock, ETF, and cryptocurrency broker
⭐ Our Overall Rating
🏆 Broker Rating75/100
🏁 Founded2013
🛍️ ProductShares, ETFs, Cryptocurrencies, Commodities (See the product list).
📉 Markets Shares, ETFs, Options, Gold
🗺️ Countries ServedUS
💳 Minimum DepositCash Account: None
Margin Account: $2,000
💰 FeesRobinhood is a no-commission broker. It is compensated through regulatory and service fees (See below).
🛡️ Regulator(s)Securities Investor Protection Corporation (SIPCS), Financial Industry Regulatory Authority (FINRA), Security and Exchange Commission (SEC)
📞 Customer SupportE-mail, Social Media
🎮 Demo AccountNo demo

Pros and Cons Of Robinhood

Pros
Cons
Tick IconReliable broker (we scored Robinhood 75/100 in our broker rating scheme)No demo account
Tick IconCustomized popular asset categories presented on the dashboardOnly US traders accepted
Tick IconThousands of stocks and ETFs available to tradeOnly one deposit method available
Tick IconCash Management service that yields unused funds

Start Trading Now at Robinhood.com

Where Is Robinhood Regulated?

Robinhood only accepts registrations from the US. Thus, Robinhood is regulated by:

RegulatorProtections
Securities Investor Protection Corporation (SIPCS)Protects Robinhood clients in the event of sudden bankruptcy where members’ funds go missing. Each Robinhood trader is covered up to $500,000 in compensation for securities and cash, and $250,000 for cash only, respectively.
Financial Industry Regulatory Authority (FINRA)US broker watchdog. The FINRA is non-profit and regulates brokers like Robinhood, exclusively in the US. The organization sets ethical laws for brokers and ensures the compliance of its members. FINRA also takes part in educating traders.
Security and Exchange Commission (SEC)The SEC oversees the regulation of securities markets with investor protection at the forefront.



Should the SEC take action against a company that’s rightfully accused of misconduct, traders stand a good chance of having their funds returned.
Note: Robinhood Crypto is not protected by SIPC and is not a member of FINRA or SIPC.

Start Trading Now at Robinhood.com

How To Open A Robinhood Account

To open a Robinhood account, you need to be a U.S resident and be in the country. You can open an account by following these steps:

  1. Head over to Robinhood.com or open the Robinhood app on mobile
  2. Select the ‘Sign Up’ option
  3. Fill in the required details, like your:
    • Full name
    • E-mail
    • New Password
  4. Then, provide your:
    • Phone number
    • U.S residential address
robinhood sign up process

After registration, you can access the dashboard, but you can’t trade or deposit. To trade, you need to complete the verification process.

How To Verify Your Robinhood Account

To access the trading platform and make a deposit, you need to verify your Robinhood account.

To complete the verification process, Robinhood needs traders to provide:

  • Proof-of-identity like your passport or driver’s license.
  • Proof-of-address like a utility bill or bank statement that contains your name and residential address.
  • Social security number via a clear digital photograph of your social security membership card.
SSN requirement
Once your proof-of-address and proof-of-identity are uploaded, you’ll need to upload a photo of your SSN card.

The Robinhood mobile app allows you to upload documents from your device’s local folder, or you can take a new photo to upload directly.

You can only access the live features of Robinhood once your account is verified.

Start Trading Now at Robinhood.com

Free Stock For New Registrations

New Robinhood traders are eligible to claim one free share of a random stock when opening an account. The share can be held or sold after two days of claiming it.

Since the stock is chosen at random, Robinhood states that the share may be worth anywhere between $2.50 and $225. To receive your free stock, navigate to the ‘Free Stock‘ tab in the menu.

If you’ve signed up for a Robinhood account and haven’t been able to claim your share, contact Robinhood’s customer support.

ESMA regulations prohibit CFD brokers from offering bonuses to retail investors in Europe to encourage CFD trading (or a greater volume of trading), including signup bonuses or fee rebates.

What Products Can I Trade With Robinhood?

The main products traders have access to at Robinhood are company stocks. Robinhood clients can either buy and sell shares outright, or trade options contracts on selected products.

robinhood popular products

Traders can also choose from over 1,900 exchange-traded funds (ETFs) and seven cryptocurrencies.

Stocks On Robinhood

Robinhood provides popular categories of company stocks.

Here are some examples of what international stocks Robinhood traders can buy and sell by category:

  • Energy (440+ stocks): Exxon Mobil, Chevron, NextEra Energy, Shell, Total, Petrobras, Quanta, Apache, Southwestern Energy, CleanSpark
  • Automotive (150+ stocks): Tesla, Toyota, Volkswagen, Nidec, Daimler, Ferrari, Honda, GM, Continental AG, Li Auto Inc, Textron, Gentex
  • Technology (900+ stocks): Apple, Microsoft, Amazon, Cisco, Salesforce, Netflix, BYD Company, CME Group, Twitter, Garmin
  • Real Estate (250+ stocks): Prologis, Crown Castle, East Japan Railway, Mitsubishi Estate, Welltower
  • Banking (650+ stocks): JPMorgan Chase, Mastercard, PayPal, Bank of America, China Construction Bank, Accenture, Citigroup
  • Food & Drink (150+ stocks): Nestle, Coca Cola, Abbott, Mondelez, Colgate, General Mills, Tesco, Hershey, Carlsberg

The brokerage offers international company stocks to trade directly or through options contracts.

Fractional Shares

Alongside traditional stocks, Robinhood offers fractional shares. Traders can enter a market with a fraction of a share as small as 1/1000000.

This means that traders with a smaller capital can speculate on stocks with a per-share price higher than the overall buying power.

For example, a trader has a capital of $500 and wants to use half of that amount to enter a market with XYZ. That’s $250 available to trade, but the XYZ stock is priced at $820.

With fractional shares, the trader could purchase 3/10 of the XYZ stock, which would amount to $246.

Robinhood traders can buy fractional shares based on the amount they’re willing to spend, or the fraction of the chosen share. However, not all stocks are eligible for fractional purchase.

Options On Stocks

Robinhood traders can also purchase and sell options contracts on stocks, commission-free.

For “advanced” traders (deemed so by Robinhood), the platform allows options strategies like iron condors, straddles, and strangles.

Options contracts allow you to speculate on a stock’s price at a future date. See our guide on Options Trading to learn more.

Exchange-Traded Funds (ETFs)

Traders interested in exchange-traded funds (ETFs) have more than 1,900 baskets of stocks to choose from, including:

See some of Robinhood’s popular ETFs.

Robinhood does not offer exposure to mutual funds.

Cryptocurrencies On Robinhood

Robinhood offers a crypto exchange where traders can buy and sell cryptocurrencies commission-free. Robinhood once supported 10+ cryptocurrencies, but now only supports the following coins:

Cryptocurrencies are exchanged via Robinhood Crypto, a company subsidiary that is not a member of FINRA.

Please Note: Availability subject to regulations. Cryptocurrency CFDs are not available to UK retail traders.

Start Trading Now at Robinhood.com

Account Types At Robinhood

Robinhood offers three different account types for traders. As with many brokers, they offer both cash and margin accounts.

Robinhood Instant Account

When traders create a new Robinhood account, the broker opens a Robinhood Instant account for the trader by default. The Instant account is a margin account.

Margin accounts entitle you to loans and allow you to trade in greater volume than your cash deposit amount. Margin trades carry more risk because you can lose borrowed money.

Robinhood’s Instant account offer traders:

  • Extended-hours trading
  • Instant deposits: trading up to $1,000 before while a deposit is being processed

Robinhood Gold Account

Robinhood Gold is a margin account like Robinhood Instant, except it offers traders more perks.

Gold account holders can:

  • Gain access to Level 2 market data powered by NASDAQ Totalview
  • Instant deposits between $5,000 and $50,000 (depending on portfolio value)
  • Margin trading on Gold

Traders should note that margin accounts do not require the account holder to use the margin allowance. These accounts can still be used as cash accounts.

Margin Requirements for Robinhood Gold – Federal regulations (FINRA) require you to have a minimum of $2,000 of Portfolio Value (minus any cryptocurrency positions) in your Robinhood brokerage account.

Robinhood Gold is free for a 30-day trial period and costs $5 every 30-days thereafter.

Robinhood Cash Account

Robinhood Cash account holders can trade based on the account balance that’s already reached the account.

Unlike Instant or Gold, Cash account holders are unable to make instant deposits. That said, extended-hours trading is still available to Cash account holders.

Users can downgrade from Robinhood Gold to a Robinhood Cash account in just a few clicks.

Cash Management Services By Robinhood

Robinhood’s cash management service is part of traders’ online broker accounts. This functionality allows traders’ untraded account funds to earn interest based on an annual yield percentage.

robinhood cash management

Robinhood traders may earn 0.30% on uninvested funds. The APY percentage is variable.

Traders who opt-in for cash management are eligible for:

  • A customizable debit card
  • ACH account number
  • Lost or stolen card replacement
  • Apple Pay, Google Pay, or Samsung Pay access

You can read more about which financial institutions are part of the Robinhood Cash Management Program.

You’ll only be able to get an overview of Robinhood’s cash management features once your account is verified. See what you need to get a verified Robinhood account.

Does Robinhood Have Individual Retirement Accounts (IRAs)?

IRAs are accounts with tax advantages for individuals wanting to save for retirement, though Robinhood does not offer IRAs at this time.

On the official Robinhood website, the company goes into detail about the various different types of IRA, so users may want to keep an eye out for any announcements that may include the introduction of Robinhood IRA accounts.

Start Trading Now at Robinhood.com

Deposits and Withdrawals

Unlike other online brokerage firms, Robinhood only offers one method of funding trading accounts.

When making a deposit, traders must link a checking account to their Robinhood account. Savings accounts can also be linked, although Robinhood does not recommend this option.

How To Deposit Via Mobile

iOS and Android users can make a deposit on the Robinhood mobile app by:

  1. Tapping the account icon on the right side of the screen’s bottom menu
  2. Select ‘Transfers‘, then select ‘Transfers to Robinhood
  3. Select the transfer account (the bank account you’ve linked)
  4. Enter a deposit amount and complete the transaction

How To Deposit Via Desktop

A Robinhood deposit on the web platform can be done by:

  1. Clicking the ‘Account‘ menu on the right side of the upper menu of your dashboard
  2. Select ‘Banking
  3. Navigate to the ‘Transfer Funds‘ section
  4. Select your bank account and the deposit amount
  5. Select ‘Review‘, then click ‘Submit‘ to complete your deposit

How To Withdraw Funds Via Mobile

iOS and Android users can withdraw funds through the Robinhood mobile app by:

  1. Tapping the account icon on the right side of the screen’s bottom menu
  2. Select ‘Transfers‘, then select ‘Transfers to your bank
  3. Select the transfer account and bank
  4. Enter a withdrawal amount and complete the transaction

How To Withdraw Funds Via Desktop

Withdrawing funds on Robinhood’s web app takes three steps:

  1. Clicking the ‘Account‘ menu on the right side of the upper menu of your dashboard
  2. Select ‘Banking
  3. Navigate to the ‘Transfer Funds‘ section
  4. Select your bank account and withdrawal amount
  5. Select ‘Review‘, then click ‘Submit‘ to complete your withdrawal

Start Trading Now at Robinhood.com

Robinhood Trading Fees

Robinhood declares itself as a commission-free broker. Traders are not charged for opening an account, fund transfers, or account management.

That said, Robinhood is charged regulatory fees by the SEC and FINRA. These charges are passed onto traders to compensate the broker:

  • Regulatory Transaction Fee: $22.10 per $1,000,000 of principal (sells only). Traders with a total sale value under $500 are exempt. Depending on SEC rate adjustments (annual and mid-year), Robinhood may amend this fee.
  • Trading Activity Fee: $0.000119 per share (equity sells) and $0.002 per share (options sells). Traders with 50 share sales or less are exempt.
  • American Depositary Receipt (ADR): Fees issued by financial institutions on foreign stocks traded on American exchanges. Robinhood estimates this fee to be around $0.01-$0.03 per share.

What Is Commission-Free At Robinhood?

Commission-free brokers like Robinhood do not charge set fees or percentages to open an account, transfer funds (some instances may be charged), or manage your account.

You may also come across such brokers being with terms like ‘free trading’, though that’s not entirely true.

Robinhood does charge some fees that you can read about below, however, Robinhood makes the majority of its revenues by routing orders from users to market makers like the New York Stock Exchange (NYSE).

This is known as payment for order flow, for which the broker is compensated by traders as well as partner market makers.

Anyhow, remember, no broker offers ‘free trading’, but rather discounted trading.

Robinhood Fee Schedule

Robinhood has no account minimums on deposits with standard accounts. This means you can deposit as little as you want and start trading products like fractional shares.

That said, account minimums apply to other account types, and there’s also a fee schedule.

Here’s a summary of Robinhood’s official fee schedule:

Summary Of Fees
Transfer FeesOutgoing ACATs
$75
Domestic Overnight Check Delivery$20
Service FeesPaper Confirms$2
Domestic Overnight Mail$20
'Gold' Account FeesCost for 30 days$5
Margin interest over $10002.5%

See the live Robinhood Fee Schedule on the website for further details.

Start Trading Now at Robinhood.com

Robinhood Platform Overview

You’ve got three ways to use Robinhood as a trading platform — via a desktop browser, browsers on responsive devices like tablets and mobile, or responsive device applications.

A common way to use Robinhood is via the Robinhood app.

When you log in to your verified Robinhood account with funds, you’ll see:

  • Account Balance: how much money you have in your account, including funds tied up in stocks, fractional shares, or other Robinhood products
  • Buying Power: how much of your account balance is available to trade with
  • Portfolio Value Change: the amount of value your portfolio has gained or lost within the last 24 hours, as well as during after-market hours. This data can also be viewed in other time frames, namely, weekly, monthly, three-monthly, yearly, and for your entire trading time with Robinhood.

Additionally, any products on your watchlist and trading products you’re speculating on will be shown on the Portfolio screen.

Trade Ticket & Asset Info

The Robinhood trade ticket is simpler than with several other brokers. You can choose whether you want to buy or sell a product, the product category, and how much you want to buy.

robinhood trade ticket
In this instance, the trade ticket is set up to buy SPCE shares.

The trading ticket can also be set to trade in USD currency value, as opposed to the number of shares.

When you’re about to trade an asset, you also have access to other key information, like:

  • Your total market value in that asset (if any)
  • Your average cost of shares in that asset (useful if you purchased one asset multiple times at different price points)
  • General company information (CEO, total number of employees, headquarters location, and more)
  • Analyst ratings on best recommended plan of action to hold, buy more, or sell
  • Per share earnings for your chosen stock
  • Related news sources integrated by Robinhood
Robinhood’s presentation of analysis and per-share earnings on Twitter stocks.

Robinhood App

You can get the Robinhood app from the iOS or Google Play app store. Remember, you can only download and use the app if you’re located in the US.

The Robinhood app is simple with no comprehensive analytics features. It’s designed for trading in a few clicks on the go. Features are designed for easy visual orientation as opposed to in-depth technical understanding.

Despite the lack of analytics, one feature that may aid traders decide what to do is the integrated news and research funnel.

Morningstar Analytics & News Feed

Robinhood integrates relevant financial news from a variety of mainstream news sources. You’ll see articles from outlets like Bloomberg, Reuters, Yahoo Finance. and The Wall Street Journal.

More importantly, Robinhood is partnered with an independent research company named Morningstar.

Robinhood has no analytics features for traders, though ironically there is a popular candle chart analytics pattern that’s also called ‘Morning star‘.

Morningstar reports can only be accessed by Robinhood Gold members and provide reports on close to 2,000 stocks with data like:

  • Fair market value
  • Risk
  • Leadership analysis
  • Business strategy analysis
  • Report summaries in a simplified format

Morningstar’s newly published reports are available on the Stock page for members who pay $5 per month for Robinhood Gold.

Start Trading Now at Robinhood.com

Customer Support

Compared to other brokerages, Robinhood has a very limited choice of customer support avenues.

Traders can reach out to Robinhood through the broker’s help center. You can either browse through the knowledge base or submit a support ticket with one of the following categories:

  • Getting Started
  • My Account & Login
  • Investing
  • Bank Transfers & Linking
  • Cash Management
  • Documents & Taxes
  • Restrictions
  • General Questions
robinhood support ticket

Robinhood also offers a help center where traders can access FAQs and support threads in the aforementioned categories.

Start Trading Now at Robinhood.com

Is Robinhood Reliable?

As a member of the U.S Security and Exchange Commission (SEC), Robinhood made its mark as a regulated broker in the US.

The company also offers client protection through the Securities Investor Protection Corporation (SIPCS) and is a member of the Financial Industry Regulatory Authority (FINRA).

Robinhood has over 13 million trading accounts according to a recent SEC filing.

That said, Robinhood had its share of controversies over the past three years.

In December 2020, the U.S Security and Exchange Commission (SEC) published an official press release on its charges against Robinhood. The allegations are for ‘misleading customers about revenue sources‘ and ‘failing to satisfy duty of best execution’.

The SEC’s order calculated that Robinhood’s practices might’ve resulted in over $34 million pulled from traders’ funds.

Brief Company History

2013Robinhood was founded in 2013 by Vladimir Tenev and Baiju Bhatt, with its current headquarters in California, US. The company name aims to portray the broker’s aspiration to provide accessible financial trading for lower capital traders, too.
2015The Robinhood mobile app was officially launched.
2020As of May 2020, Robinhood was valued at over $8 billion (US) by American VC firm, Sequoia.

Start Trading Now at Robinhood.com

FAQs

Here we answer some common questions about trading with Robinhood.

Is Robinhood legitimate?

Robinhood is a member of the U.S Security and Exchange Commission (SEC) and is regulated by the Securities Investor Protection Corporation (SIPCS). The broker is also monitored by the Financial Industry Regulatory Authority (FINRA), assuring traders of the involvement of leading regulatory bodies in the US.

See how these organizations protect Robinhood clients.

Is Robinhood good for beginners?

While no trading platform is good for beginners, Robinhood may be simpler to use and execute trades with than other brokers. However, Robinhood has no comprehensive analytics tools with its simple interface may also make it harder for beginners to learn about important aspects of trading like technical analysis.

How do I get my money from Robinhood?

You can withdraw funds from Robinhood through the broker’s mobile app on iOS or Android devices, as well as via its web app. Navigate to the Account section on your chosen device and find the Transfers menu. Then, select your withdrawal method and amount. See this step-by-step Robinhood Fund Withdrawal Guide.

What happens if I close my Robinhood account?

After your Robinhood account is closed, the broker keeps a record of your account statements, tax documentation, and trade data. This is due to the record-keeping policy of the U.S Security and Exchange Commission (SEC). You can close your Robinhood account provided that your account balance is $0.00 and all your trading positions are closed.

Is it safe to buy Bitcoin on Robinhood?

While traders can store and exchange Bitcoin via Robinhood Crypto, Robinhood is not a cryptocurrency specialist platform. Whether buying Bitcoin is considered “safe” on Robinhood is for individual judgment and the comparison of Robinhood to other Bitcoin exchanges. Robinhood provides cryptocurrency trading and storage services to clients through a subsidiary named Robinhood Crypto LLC.

Is the Robinhood app free?

Traders can download the Robinhood app for free from the iOS app store and Google Play store. While the application is free, users who register and participate in trading are subject to Robinhood’s compensatory fees. See this list of Robinhood’s fees to review what fees you may be subject to as a Robinhood client on mobile.

Is Robinhood good for day trading?

Since Robinhood has no in-depth analytics features on desktop or its mobile apps, day traders may find Robinhood a poor choice for day trading. Alternative brokers with comprehensive analytics and charting tools may be a better suit for day traders. In these broker reviews, we cover such brokers, some with hundreds of different charting tools.

Where is Robinhood located?

The Robinhood headquarters are in California, US. As a US-based and licensed company, Robinhood also only accepts traders who are based in the US with a US residency, proof-of-identity, and a social security number. All in all, Robinhood has ten different offices across two different countries.

How long does Robinhood take to review an application?

Robinhood states that the company takes between five to seven days to review an account. However, an account review and verification can only take place once you have updated the necessary documents for approval. These include your proof of identity, proof of US address, and a photograph of your social security number.

Does TD Ameritrade pay Robinhood transfer fee?

If you transfer your portfolio from Robinhood to TD Ameritrade, you’re entitled to an ACAT transfer fee from Robinhood. However, TD Ameritrade reimburses you for the fee you pay to Robinhood if you do choose to leave the broker. See Robinhood’s fee schedule to find out what other fees you may encounter in special circumstances.

Plus500 is not available in the US

Legitimate CFD brokers, like Plus500, cannot accept US clients by law

US traders welcome at these brokers:

Cryoptocurrencies:

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  • Includes Bitcoin, Ethereum & Ripple
  • Super simple setup

Accepts traders in the USA

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Forex, Gold & Silver:

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  • Trade over 90+ currencies
  • Major US broker

Accepts traders in the USA

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