2018 Robinhood brokerage hidden fees. Robinhood trading inactivity and monthly fee, additional charges. Costs for the broker's IRA account.

Overview of Hidden Fees at Robinhood

If you’re concerned about the pricing schedule at Robinhood and what trading there will cost you, read on. We’re going to take an in-depth look at the brokerage house and find out what every imaginable activity costs. When you’re finished with this article, you’ll know what hidden fees Robinhood has, and this in turn will allow you to make a more accurate comparison to other brokers.

What Robinhood Doesn’t Charge For

Perhaps it’s best to start with the activities Robinhood doesn’t charge for. Stock and ETF transactions are free. That may sound almost unbelievable, but the broker-dealer makes up for this, just barely, by charging for a few other services that we’ll look at shortly.

In addition to stocks and ETF’s, Robinhood has launched an options trading service that charges zero commissions. Moreover, there are no fees for assignments and exercises.

Robinhood recently started offering cryptocurrency trading. Ethereum and bitcoin are currently on tap, and the broker promises more in the future. There are no commissions charged for digital currency trades.

In addition to these great features, a brokerage account at Robinhood comes with no annual fee, low-balance fee, or inactivity charge. There is also no fee to close an account.

Deposits and withdrawals via the ACH system are free of charge. If you transfer a brokerage account into Robinhood, the broker charges nothing (although the other firm may charge).

Robinhood Hidden Fees

Robinhood has to make money somehow, so now we come to the hidden fee section. The broker charges $75 to transfer an account to a competing brokerage firm via the ACAT system. Paper statements are $5 each, while paper confirmations are $2 a piece.

If your account is restricted for any reason, there is a $10 surcharge per trade. Using a live representative over the phone to submit an order costs an extra $10.

Trading a foreign security is a very steep $50 per transaction. Cancelling a foreign security or making a trade adjustment is $15. Euroclear and Canadian securities cost $35 per trade.

Robinhood charges a monthly fee for a unique margin service called Robinhood Gold. The fee isn’t a percentage of money borrowed, as with a traditional margin service; but rather it is a flat monthly charge. The exact amount is based on account size, which has a minimum of $2,000 to use margin, per federal policy. The minimum fee is $6, and it increases up to $200, depending on the amount you want to borrow. If you borrow more than $50,000, Robinhood charges 5.0% on balances above that level.

A domestic wire transfer costs $25, while an international wire is a steeper $50. Domestic overnight check delivery is $35. A returned check, ACH, or wire costs $30.

Robinhood also passes on regulatory fees to its customers. This includes the SEC fee, which is $2.31 per $100,000 of principal, which is valid for sales only. The fee is rounded up to the nearest penny.

The Trading Activity Fee (TAF) of 0.0119¢ is only applied to stock sales. It is rounded up to the nearest cent and is capped at $5.95 per transaction.

Robinhood Promotion

Open account and get FREE stock.

Disadvantages of Robinhood’s Fee Schedule

Robinhood’s fee schedule is very generous. But it comes at a high cost as the broker-dealer cuts a lot of corners in order to deliver such a nice commission policy. For instance, customer service at Robinhood is available only during market hours, and the company’s phone number isn’t toll-free. There is no on-line chat, English is the only available language, and there are no brick-and-mortar locations. A test e-mail we sent to the firm was returned 48 hours later, which is too long for the needs of most traders.

In addition to the underwhelming customer service, the broker fails to provide many securities that most investors want to trade. For example, mutual funds aren’t available, nor are fixed-income products. Robinhood still doesn’t offer retirement accounts, and cash management tools are missing.

Trading technology is almost non-existent at Robinhood. There is no desktop platform, although the broker recently launched a basic website trading environment. The Robinhood mobile app is very rudimentary.

Comparison

Other firms provide many of the services that are absent at Robinhood. For example, WellsTrade offers mutual funds, and Merrill Edge customers get checks and a Visa debit card free of charge. Vanguard has retirement resources along with a list of IRA’s.

Firstrade charges $0 per stock and ETF transaction, which obviously is the same as Robinhood. But Firstrade provides on-line chat, Chinese language service, and longer customer service hours. Firstrade also has a history of more satisfied customers and fewer complaints, for obvious reasons. For most investors, Firstrade is probably the better value.

While savings could really add up for high-volume traders if they are at Robinhood, day-trading firms offer deep discounts. For example, Lightspeed Trading charges just 0.1¢ per share if you trade over 15,000,000 shares in a month. There is a $1 minimum per order, however.

TD Ameritrade offers much better trading tools than Robinhood, and there is no charge for any of them. Thinkorswim is TD Ameritrade’s flagship desktop system, and it offers many professional-level features, such as exotic technical studies and futures trading. TD Ameritrade provides three mobile apps, all with different functions. Charting on all of them is much better than Robinhood’s app can provide.

Judgment

Robinhood has managed to offer free equity trades, but only by sacrificing in other areas. In recent years, it has begun providing more services. It will soon offer options trading at no charge, and this is really exciting. Its cryptocurrency service is rather limited but it too has a lot of potential. Although there aren’t many fees at the brokerage firm, be aware of what you don’t get before you open an account.

Robinhood Promotion For A New Account

Open account and get FREE stock.

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Disclaimer

For the most recent information on Robinhood hidden fees visit their website.

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