Robinhood Rating: 
Robinhood Overview
Robinhood made a name for itself by introducing $0 commissions, but today it offers more than just free trades. Let’s explore what Robinhood has to offer now.
Bulls Highlight...
Retirement accounts: IRA accounts with a broker match.
Cryptocurrencies: Zero-commission crypto trading.
Margin trading: The lowest margin rates in the industry.
Bears Highlight...
Basic software: Platforms are improving, but still have many limitations.
Limited account types: Only a few account types are offered.
Minimal customer service: Robinhood has made improvements but still has gaps.
Investment Lineup
Robinhood clients can buy and sell the following:
- Stocks
- American Depository Receipts
- Real Estate Investment Trusts
- Options
- Cryptocurrencies
- Exchange Traded Funds
However, Robinhood does not offer futures, forex, warrants, mutual funds, bonds, or precious metals. Although a few over-the-counter (OTC) stocks are available, most are not. Only U.S. exchanges are accessible.
Robinhood’s crypto service currently offers
19 coins, including popular ones like Bitcoin and Ethereum, as well as some unique ones like Tezos and Chainlink.
Account options for trading these assets are limited. Robinhood has traditionally offered only individual taxable accounts, but recently added IRAs and joint accounts.
Previously, Robinhood offered no investment advisory service, but its new IRA program includes a robo-advisor option. This service creates a portfolio but does not monitor it over time.
Opening an Account
Robinhood’s easy-to-navigate website and mobile app make account setup simple. It only takes a few minutes to fill in the required information, and new users can receive free stocks by linking a bank account.
Robinhood Promotion
Up to $200 free stock + 1% IRA match + transfer fee refund at Robinhood.
Open Robinhood Account
Customer Support
Robinhood has had customer service issues in the past but has made some improvements. There is now a 24/7 chat option on the website. To find it, go to the Account link in the top-right, select Help, then click on “Contact us 24/7” and choose a topic.
Robinhood now offers 24/7 support and has added a call-back option for users who prefer not to wait on hold. The call-back link is on the contact page.
Despite these upgrades, Robinhood still lacks physical locations and an internal messaging system. However, there is a Help Center with answers to many questions.
Banking Features
Robinhood has introduced its debit card, the Cash Card, with several benefits, including FDIC insurance, cash back at selected stores, and access to over 90,000 fee-free ATMs. There are no fees, no forex charges, and no minimum balance requirements.
The Cash Card also has a round-up feature that lets users invest spare change from purchases into stocks or crypto. Robinhood may add bonuses to these round-ups at times.
While the Cash Card doesn’t pay interest, it is issued by Sutton Bank, with funds held at JP Morgan Chase. There’s no sweep program, but uninvested cash in brokerage accounts can be swept into FDIC-insured banks for added security.
Margin
Robinhood used to offer margin only through its Gold subscription. Now, margin trading is available outside Gold as well.
A margin balance costs 6% (for balances under $50K).
It’s easy to switch between cash and margin accounts on Robinhood. Go to the Account link in the top-right, click on Settings, then select Investing from the left-hand menu.
However, Robinhood does not allow short selling, and its software does not show specific margin requirements for individual securities.
Website
Robinhood’s website is simple to use but lacks advanced features. The platform combines account management and trading in one interface.
The dashboard, accessed by clicking the Robinhood feather logo, shows the account’s real-time value at the top, positions on the right, and watchlists below.
Clicking a watchlist entry brings up the asset’s profile with an order form in the upper-right. There are six order types:
- Market
- Limit
- Recurring
- Trailing Stop
- Stop Limit
- Stop Loss
An “Add to Watchlist” button sits below the order form. To the left, a small line chart is displayed with an option to switch to an advanced view with a larger, full-screen chart and some basic indicators. There are no drawing tools, and only five years of price history can be viewed.
However, there’s no streaming video news, and alerts are not available.
Mobile App
Robinhood’s mobile app mirrors the website’s simplicity. Available for iOS and Android, it includes watchlists and order types identical to those on the website. Charting, however, is limited and doesn’t support horizontal rotation. Six technical indicators are available, including MACD and Bollinger Bands.
The mobile app lacks some expected features, such as mobile check deposit and video news.
Pricing
This is where Robinhood truly stands out: keeping costs low. The platform has no commission or spread for cryptocurrency trading, making it one of the few brokers to offer completely free crypto trades.
Stock and option trades are also commission-free. There are no per-contract fees for options, and exercising or assigning them is free too.
Robinhood accounts have no ongoing fees or minimum balance requirements, making it ideal for those on a budget.
One fee that stands out is the $100 fee for outgoing ACAT transfers, which is higher than the industry average.
Robinhood Promotion
Up to $200 free stock + 1% IRA match + transfer fee refund at Robinhood.
Open Robinhood Account
Education & Research
Robinhood’s educational resources are minimal. The Learn hub covers basic investing topics, with short articles featuring helpful visuals. Examples include:
- What is a Stock?
- Getting Started with Options
- Understanding Volatility
However, research tools are limited. Robinhood does not offer a full stock screener on its app or website. Instead, it organizes stocks and ETFs into general categories, such as 100 Most Popular, Technology, and Pharma, which can be found on the dashboard.
An asset’s profile includes basic stats like volume and 52-week low, along with news articles from various sources, including Benzinga and Yahoo Finance.
Popular stocks also display analyst ratings (with Morningstar reports available for Gold members). For instance, Coca-Cola has 26 ratings, most of which are buy ratings.
Further down, there’s a graphical history of earnings (up to seven quarters).
At the bottom of a profile, Robinhood offers a unique feature that shows what other users are buying.
Despite these tools, Robinhood lacks some advanced research features. There are no PDF reports (except for Gold members), peer comparisons, ESG ratings, or sentiment scores, which are available on other platforms.
Extra Services
Extended Hours: Cryptocurrencies trade 24/7. Securities can be traded from 7:00 am to 8:00 pm, New York time.
Fractional-Share Trading: Allows whole-dollar trading for stocks and crypto. Market orders are limited to regular trading hours.
DRIP Service: Available at no extra cost.
IPO Service: Robinhood clients can participate in initial stock offerings.
IRAs: Individual Retirement Accounts are available with a
1% match on contributions, regardless of employer status, though matches must remain in the account for five years.
Recommendations
Active Equity Trading: While Robinhood supports fractional trading, it lacks shorting and other advanced features.
Charles Schwab is a better choice.
Mutual Fund Investors: Robinhood isn’t recommended here.
Firstrade offers a wider range of funds.
Beginners: Robinhood’s easy-to-use interface makes it ideal for new investors.
Individual Retirement Accounts: Robinhood’s IRA program is a solid option.
Small Accounts: Robinhood is great for small accounts, with a minimum trade amount of just $1.
Long-Term Investors and Retirement Savers: Charles Schwab offers more resources for retirement planning, including lifecycle funds, 401k plans, and retirement calculators.
Robinhood Promotion
Up to $200 free stock + 1% IRA match + transfer fee refund at Robinhood.
Open Robinhood Account
Robinhood Review Summary
Robinhood has made significant strides over the past decade. While it has grown and remains popular, it still has areas for improvement. Interestingly, its strongest feature is in the area of cash management.
Updated on 11/12/2024.