Robinhood Rating:  

Robinhood Investing firm review. Brokerage fees and commissions, pros and cons, minimum requirements and promotion offer for opening a new online trading account.

Robinhood Overview

Robinhood helped push the brokerage industry toward $0 commissions. But today it offers much more than just free trading. Let’s take a look.

Bulls Highlight...

Retirement accounts: An IRA service with up to a 3% broker match.

Cryptocurrencies: With a very broad lineup and low-cost trading options.

Margin trading: With very low rates by industry standards.

Bears Highlight...

Standard software: It has improved, although the basic experience is still fairly simple.

Limited customer service: Robinhood has made improvements, but there are still limits.

Investment Lineup

Robinhood clients can buy and sell the following assets:

• Stocks
• American Depository Receipts
• Real Estate Investment Trusts
• Option contracts
• Cryptocurrencies
• Exchange Traded Funds

Many other investment products are still missing. These include forex, warrants, mutual funds, most fixed-income products, and precious metals. Robinhood also now offers futures through a separate Robinhood Derivatives account. Although a few OTC stocks are available (such as some over-the-counter ADRs), most are still unavailable. Only U.S. markets are the focus for securities trading.

Robinhood’s crypto service currently has 66 coins available for trading. Besides the majors, there are some distinctive offerings like Tezos and Chainlink.





In the past, Robinhood only offered individual taxable accounts. It has since added IRA service, as well as joint accounts, a managed-investing service, and new trust and custodial accounts.

Previously, there was no investment-advisory service at Robinhood. That has changed with Robinhood Strategies, which is a managed service rather than a one-time IRA allocation that is left alone afterward.

Opening an Account

Thanks to Robinhood’s user-friendly website and mobile app, it’s easy to sign up for an account on either device. It takes just a few minutes to fill in the requested details. New customers can also receive reward stock by linking an external bank account.

Robinhood Promotion

Free stock + 3% IRA match or 2% transfer match at Robinhood.

Open Robinhood Account

Customer Support

Robinhood has had problems with customer service over the years, although it has made some notable improvements. For example, there is now online chat on the website and inside the app. To get help, go to the account area and open the Help or Support section.

Robinhood now offers round-the-clock support in some channels, which is of course a major improvement. The brokerage firm also has a call-back service, although phone support is not available for every issue and the hours are more limited for investing topics.

Although these are commendable improvements, Robinhood still has no branch locations. The website also has no internal messaging system. But there is a Help Center on the site. It answers many questions that Robinhood customers will have.

Banking Features

It took a long time for Robinhood to finally launch its debit-card and spending features. Since rolling them out, the company has made some improvements, and the Cash Card now comes with several useful features. These include FDIC pass-through insurance, cash-back offers from participating stores, and access to large ATM networks. Monthly fees and foreign transaction fees are $0, although ATM-related fees can still apply.

Perhaps the best feature of the Cash Card is a round-up service that can put spare change into stocks and cryptocurrencies with every purchase. Plus, Robinhood may add bonuses to these transactions in some cases.

Robinhood’s spending account itself pays no interest and works alongside the Cash Card setup. The card is issued by Sutton Bank, while Robinhood’s spending account works with J.P. Morgan Chase Bank, N.A. Funds in the spending setup can receive FDIC pass-through coverage up to the standard $250,000 limit. However, eligible free cash in a brokerage account can be swept to multiple FDIC-insured banks.

Margin

Previously, Robinhood offered margin trading only through a Gold subscription. It still ties its headline margin perks to Gold, although customers can now choose between cash and margin account setups more broadly than before.

A margin balance costs 5% (for balances under $50K).

It’s really easy to review account settings on Robinhood’s website. Just head back to the Account link in the upper-right corner of the site. Click on the Settings tab on the next page, and then the Investing link in the left-hand column.

Unfortunately, Robinhood does not permit short positions in its accounts, and its software does not display margin requirements for specific securities.

Website

All right, now we get down to the heart of the matter—actual trading. For this, Robinhood has a user-friendly, although still somewhat basic, website. The site has somewhat of a browser-platform feel to it, although there is no separate standard platform. Account management and trading are combined into one system.

A good place to begin on the site is the dashboard, which is accessed by clicking on the feather (Robinhood’s logo) in the upper-left corner of the site. At the top of the dashboard sits the account’s value, which is updated in real time. A right-hand column displays the account’s positions, which could be a combination of securities and cryptocurrencies. All watchlists that have been created sit underneath the list of positions.





Clicking on an entry in a watchlist generates the profile for that asset. An order form is automatically included in the upper-right portion of the profile. There are 6 order types:

• Market
• Limit
• Recurring
• Trailing Stop
• Stop Limit
• Stop Loss

The button to add an asset to a watchlist sits underneath the trade ticket. To the left of the order ticket is a small chart in line format. An advanced icon sits on the graph for a higher level of charting. This mode generates a more capable chart with technical studies and additional tools. Robinhood Legend goes much further, adding drawing tools, custom layouts, and more advanced charting than the standard website offers.





Unfortunately, there’s not a great deal else to report on. There is no streaming video news, but alerts are available now.

Mobile App

The situation is much the same on Robinhood’s mobile app. Compatible with both Apple and Android phones, the software has the watchlists from the website. The order ticket has the same trade types. Charting, unfortunately, is still on the light side compared with advanced trading apps, although Robinhood has improved its charts and indicators.





The mobile platform doesn’t quite deliver everything we would expect from an advanced app. There is no check deposit tool, and video news is missing.

Pricing

Here is where Robinhood really stands out: the cost. The brokerage house does its best to keep costs down, and it certainly has done well in the realm of cryptocurrency trading. There is no commission on crypto orders routed to market makers, although spreads and other routing-related fees can still be part of the total cost depending on how the trade is executed.

Stock and standard equity option trades still follow the same zero-commission policy. Options have no per-contract fees on standard equity contracts, and exercises and assignments are free.

Accounts have no ongoing fees or minimum balance requirements, which really tops off a low-budget experience.

The one fee we might complain about is an outgoing ACAT transfer fee of $100, which is a little steep based on industry norms.

Robinhood Promotion

Free stock + 3% IRA match or 2% transfer match at Robinhood.

Open Robinhood Account

Education & Research

Traders at Robinhood who need to brush on a topic or two will find minimal resources to do so. For general investing education, there is a Learn hub that goes over a lot of the basics in investing. Although the articles here have some really good graphics, they tend to be rather brief. Here are some examples we found:

- What is a Stock?
- Getting started with options
- Volatility explained

For asset research, tools are still limited, but Robinhood now does offer stock screeners on its platforms. It also continues to publish groups of stocks and ETFs, although these are less robust than what some competitors provide. These categories of securities can be found on the website in the middle of the dashboard. Examples include 100 Most Popular, Technology, and Pharma.

An asset’s profile on Robinhood’s website or mobile app has key stats like volume and 52-week low. Further down the list are news articles with thumbnails, and they do come from a variety of sources. Benzinga and Yahoo Finance are examples.

Popular stocks have analyst ratings, although there are no reports, except for Gold members, who get reports from Morningstar. For Coca-Cola, we found 26 ratings, most of which were buy ratings.

Going further down the list is a graphical history (out to seven quarters) of actual and estimated earnings reports.

At the very bottom of a profile is a unique service that Robinhood offers that other broker-dealers don’t: a report on what other customers are buying.

Although the full list of security analysis tools may sound extensive, there are many resources missing. Besides pdf reports, there are no social sentiment scores, peer comparisons, ESG numbers, or other metrics that can be found at other brokerage firms.

Extra Services

Extended Hours: Cryptocurrencies trade around the clock. Securities can be traded before the opening bell, after the closing bell, and in many cases overnight through Robinhood 24 Hour Market.

Fractional-share Trading: Whole-dollar trading is available for both equities and digital currencies. For securities, dollar-based trading is not limited only to the regular session, although fractional orders are not eligible for Robinhood 24 Hour Market overnight trading.

DRIP Service: Available at no additional cost.

IPO Service: Robinhood clients can get in on upcoming stock releases.

IRAs: Individual Retirement Accounts are finally available. Robinhood matches 3% of contributions for Gold members and 1% without Gold. No employer is required to receive this match, although matched funds generally need to remain in the IRA for five years.

Recommendations

Active Equity Trading: Although Robinhood has fractional-share trading, it doesn’t have a lot of other resources, such as short capability. Charles Schwab has it all.

Mutual Fund Investors: We can’t suggest Robinhood here for reasons already stated. We can defend Firstrade, who has thousands of funds from a large variety of fund families.

Beginners: Robinhood made the trading experience easy for beginners.

Individual Retirement Accounts: Robinhood’s IRA program is very good.

Small Accounts: Robinhood is excellent for small investors. Minimum trade amount is just $1.

Long-Term Investors and Retirement Savers: Charles Schwab has lifecycle mutual funds, self-employed 401k plans, retirement calculators, fixed-income tools, and lots of other stuff that Robinhood doesn’t have.

Robinhood Promotion

Free stock + 3% IRA match or 2% transfer match at Robinhood.

Open Robinhood Account

Robinhood Review Summary

Robinhood has come a long way in a little over a decade. Despite its growth and its ability to stay in business, there is still much to be desired. Somewhat paradoxically, one of its most useful strengths is still in the cash-management realm.