Robinhood Rating:   4-star brokerage firm 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 is responsible for driving the brokerage industry to $0 commissions. But it has more today than just free trading. Let’s check it out.

Bulls Highlight...

Retirement accounts: Recent launch of an IRA service with broker match.

Cryptocurrencies: With an unbeatable commission schedule.

Margin trading: With two pricing systems.

Bears Highlight...

Weak software: Platforms are getting better, though.

Lack of account types: This remains an individual-only broker.

Limited customer service: Robinhood has made improvements but not enough.

Investment Lineup

Robinhood Trading Rating

Robinhood clients can buy and sell the following assets:

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

All other investment products are missing in action. These include futures, forex, warrants, mutual funds, fixed income, and precious metals. Although a few OTC stocks are available (such as over-the-counter ADRs), most are unavailable. Only U.S. exchanges are accessible.

Robinhood’s crypto service currently has 19 coins available for trading. Besides the majors, there are some unique ones like Tezos and Chainlink.


Robin Hood Crypto Trading Review


The account lineup to trade these assets is much curtailed. In the past, Robinhood has only offered individual, taxable accounts. It has recently added an IRA service.

Previously, there has been no investment-advisory service at Robinhood. However, Robinhood’s new IRA program does have a robo option. It is a point-in-time service, meaning that it creates a portfolio once but does not monitor it going forward.

Opening an Account

Robinhood Trading Rating

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 free shares of stock by linking an external bank account.

Robinhood Promotion

Get up to $200 in free stock with a new Robinhood account.

Open Robinhood Account

Customer Support

Robinhood Trading Rating

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. To find it, head over to the Account link in the top-right corner of the site and select Help from the list of choices in the drop-down menu. Next, click on “Contact us 24/7” and select a topic.

And yes, Robinhood is now open around the clock, which is of course a major improvement. The brokerage firm has also added a call-back service for customers who don’t want to wait on hold. The link for the call back will be found on the contact page just mentioned.

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

Robinhood Trading Rating

It took a lot of time for Robinhood to finally launch its debit card. Since rolling it out, the company has made some improvements, and the debit card, which is now called the Cash Card, comes with some nice features. These include FDIC insurance, cash back from participating stores, and 90,000 fee-free ATMs. And speaking of fees, there are none of them—no monthly fees and no forex fee, either. As with its brokerage accounts, there is no minimum balance requirement.

Perhaps the best feature of the Cash Card is a round-up service that earns fractions of stocks and cryptocurrencies with every purchase. Plus, Robinhood will add bonuses to these transactions in some cases.

Robinhood’s Cash Card pays no interest and is issued by Sutton Bank. The card creates a discrete bank account with JP Morgan Chase Bank, where funds are held. Both banks are FDIC insured. There’s no sweep program, though, so only the standard $250,000 of protection is available. However, a free cash balance in a brokerage account can be swept to multiple FDIC-insured banks.

Margin

Robinhood Trading Rating

Previously, Robinhood offered margin trading only through a Gold subscription. It still offers margin through Gold, although it’s now possible to create a margin account outside of the Gold program.

A margin balance with a Gold subscription costs 7.25% (the Gold subscription is $5 per month). Without a Gold plan, the cost is 11.25% across all balance tiers.

It’s really easy to switch between cash and margin status 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

Robinhood Trading Rating

All right, now we get down to the heart of the matter—actual trading. For this, Robinhood has a user-friendly, although rather basic, website. The site has somewhat of a browser platform feel to it, although there is no discrete 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.


Robin Hood Charts


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 full-screen chart with a few technical studies. There are no drawing tools or other tools. The line format can be changed to candlesticks here. A trade button sits at the top of the chart. Only five years of price history can be shown.


Robin Hood Charts


Unfortunately, there’s not much else to report on. There is no streaming video news, and alerts are missing in action.

Mobile App

Robinhood Trading Rating

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 on the same level; and actually, it’s somewhat worse because a graph cannot be rotated horizontally. However, the same six technical indicators are available (MACD and Bollinger Bands are a couple of examples).


Robin Hood Charts


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.

Other Software

Robinhood Trading Rating

Robinhood doesn’t have a desktop platform or an API, so there’s really no professional-level trading experience. It does have a smartwatch app, though. An account’s watchlists can be displayed, and there’s a small graph for account value.

Pricing

Robinhood Trading Rating

Here is where Robinhood really excels: the cost. The brokerage house does its best to keep costs down, and it certainly has succeeded in the realm of cryptocurrency trading. There is no commission and no spread, either. It is one of the few brokers to charge nothing for crypto trades.

Stock and option trades have the same zero-commission policy. Options have no per-contract fees, 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

Get up to $200 in free stock with a new Robinhood account.

Open Robinhood Account

Education & Research

Robinhood Trading Rating

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 even more limited. For whatever reason, Robinhood still has no actual stock screener, either on its mobile app or on its website. It continues to publish groups of stocks and ETFs, but these pale in comparison. 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.


robinhood promo


Extra Services

Robinhood Trading Rating

Extended Hours: Cryptocurrencies trade around the clock. Securities can be traded before the opening bell (starting at 7:00 am, NY time) and after the closing bell (until 8:00 pm).

Fractional-share Trading: Whole-dollar trading is available for both equities and digital currencies. A market order must be used, which limits these types of trades to the regular session (for securities).

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 1% of all contributions. No employer is required to receive this match, although matches cannot be withdrawn for five years.

Recommendations

Active Equity Trading: Although Robinhood has fractional-share trading, it doesn’t have a lot of other resources, such as a desktop platform or short capability. Interactive Brokers has all three.

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

Beginners: Although Robinhood does try to simplify the trading experience, it doesn’t do a spectacular job of it. We would suggest J.P. Morgan Automated Investing, who offers a robo account with ongoing portfolio management.

Individual Retirement Accounts: Robinhood’s new IRA program is decent, although Schwab has more IRA types.

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

Long-Term Investors and Retirement Savers: E*Trade has lifecycle mutual funds, self-employed 401k plans, custodial accounts, retirement calculators, and lots of other stuff that Robinhood doesn’t have.

Robinhood Promotion

Get up to $200 in free stock with a new Robinhood account.

Open Robinhood Account

Robinhood Review Summary

Robinhood has come a long way in less than 10 years. Despite its growth and its ability to stay in business, there is still much to be desired. Somewhat paradoxically, its best feature seems to be in the banking realm.