Robinhood’s Fees
Robinhood is well known as being a zero-commission broker, and most investors consider the broker to be free. However, there are several fees that investors will experience while using the broker.
Keep reading to learn about Robinhood’s hidden fees.
Key Takeaways
• Robinhood is a zero-commission broker, but there are still some fees to know about.
• Fees that you will see at Robinhood include
regulatory fees, trading fees, securities-based fees, and margin fees.
• Robinhood’s fees are listed on the
broker’s fee schedule that the broker is transparent about them.
Robinhood’s Approach to Fees
Robinhood presents itself as a no-cost broker, particularly in terms of trading. It doesn’t charge investors to place trades but there are some administrative and regulatory fees that do need to be paid. In general, Robinhood’s approach to fees is more service based, rather than being focused on collecting a premium on trading activity.
Here is a breakdown of the fees that are not obvious from looking at the broker’s webpage.
Hidden Fees at Robinhood
Robinhood's hidden fees are related to trading, its Spending account, and account management actions.
Robinhood Regulatory Fees
When it comes to trading fees, one type that many investors don’t always see comes from regulatory bodies like FINRA and SEC.
Regulatory fees do not originate from Robinhood, but the broker does pass them along to investors. The fee from the Securities and Exchange Commission (SEC) is $8 per $1,000,000 of principal for all sell orders. Notably, however, Robinhood does not pass the fee along when sale orders are less than $500.
Another regulatory fee is called the
TAF (Trading Activity Fee). It is also charged when selling securities. The fee is around $0.000166 per share (stocks), and $0.00279 per contract (options). Like the SEC fee, Robinhood only passes this fee along for trades over $500.
Additional fees that you will see are generated by specific investments and the use of margin.
For example, Robinhood
passes along the fee for ADRs (American Depository Receipts). It is a custodial fee charged by the banks who make the security available, and ranges from $0.01 to $0.03 per share.
As far as margin use is concerned, traders who make use of it will pay a small fee. Margin fees may
not fall into the ‘hidden fee’ category, but it is good to know what they are.
Robinhood users pay a margin rate of 5.75% that drops for higher balances.
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Robinhood Spending Account Fees
Apart from trade-related fees, there are also some fees tied to the Robinhood Spending account (cash management). One fee comes from using ATMs to withdrawal money. Robinhood charges $2.50 every time to take money out of your account via an ATM machine. One way to avoid the fee is to setup direct deposits totaling at least $300 monthly. However, most foreign ATMs have their own fees that Robinhood does not include in its reimbursement program.
Other than ATM fees, there aren’t any other fees to worry about. Using the Spending account internationally is free as long as the country is on the list of supported countries (if it isn’t, you won’t be able to use the card in many cases).
Another thing that you don’t have to worry about are fees for card replacements and incoming money transfers. Overdraft fees are also not a worry since Robinhood doesn’t allow accounts to go into overdraft.
Robinhood Account Fees
Account management fees, including transfers and document requests can also come with some fees.
For example, using the outgoing Instant Transfer method triggers a fee of 1.75% of the transfer amount. The same fee applies to Instant withdrawals to a debit card and a bank account.
Other (not so hidden) transfer fees are charged for things like returned checks ($25), outgoing wires ($25), and ACAT fees ($100).
In addition to these, Robinhood also has charges that apply for certain services or requests, such as paper statements, overnight mail, or corporate actions. For example, paper statements and paper trade confirmations each cost $25. There are also charges for domestic and international overnight mail, costing $20 and $50, respectively.
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Updated on 1/1/2025.
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