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Robinhood IRA Account Fees. Does Robinhood Offer IRA in 2022?

Robinhood IRA accounts: Traditional and ROTH IRA, SEP, SIMPLE and 401(k) rollover. Fees, commissions, and retirement investment options. Does Robinhood offer IRA accounts?

Does Robinhood offer IRA accounts?

Unfortunately, Robinhood Financial does not offer any IRA accounts at this time. There are no Traditional IRA, Roth IRA, SEP or SIMPLE retirement accounts at this broker. For a $0 commission IRA company see Ally Invest (review).

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What is Robinhood?

Review below is for non-IRA (taxable) Robinhood brokerage account.

Robinhood Financial is a relatively new app-based broker that allows users to easily trade most stocks and ETFs commission-free without all the bells and whistles that come with the more traditional online brokers. For this reason, it is a great way for beginner investors and those starting with less capital to get their feet wet in the market without worrying about losing a portion of their capital to commissions. The commission-free trading also makes this app popular among frequent traders.

Ease of Use and Customization

Besides the free trades, some of the other pros of the app are its simple design and customizability. Its simplicity makes it relatively easy to use and navigate. The main screen shows you your portfolio’s performance for the standard time periods right above your custom watch list, which automatically includes your active positions as well as any tickers you want to track. Clicking into any of the names on your watch list will show you that stock’s performance chart and returns as well as a basic snapshot of the stock, including stats like market cap, volume, and trading range. Also on the main screen is a news feed which shows you the day’s market-moving headlines as well as any news relevant to the names in your portfolio and watch list. And when any of the names you’re following are having a big day (up or down) you’ll receive real-time push notifications alerting you to the price movement. Any of the other information you would need, such as account details, banking connections, and trade history, can be easily accessed by a pull-out menu to the left of the screen.

Range of Securities Offered

Robinhood’s platform currently allows users to trade most U.S.-listed stocks (those listed on the major exchanges), ETFs, stock options, and some cryptocurrencies. Stocks listed on the OTC or foreign exchanges are not currently available.

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Robinhood Gold

More active traders should consider paying a small monthly fee for Robinhood Gold, which is a premium version of the app with some added benefits, namely access to leverage, instant access to deposits, and extended trading hours. Robinhood Gold is a margin account, which gives you up to two times the buying power depending on which tier of Robinhood Gold you pay for. For example, if you pay a flat $10/month you will have access to $2,000 of extra buying power. You can upgrade to higher tiers that give you access to more buying power for a higher monthly fee. Robinhood only charges the flat monthly fee for the additional buying power, unless you borrow more than $50,000, then they will charge you 5% interest on the amount borrowed exceeding the $50,000. The other benefits of upgrading to Gold include not having to wait 2-3 days for your deposits to settle; with the margin account, these funds are available for you to trade instantly. Upgrading to Gold also means you can participate in after-hours trading. The stock market is open from 9:30AM to 4:00PM, but with Robinhood Gold you can trade starting a half hour before the market opens and for two additional hours after it closes.

The Bells and Whistles: Company Financials, Research Reports, and Charting Tools

Because Robinhood is free and was initially launched only as an app it is somewhat of a bare-bones broker in that it lacks many of the bells and whistles you would find with many of the more traditional online brokers. For example, you won’t find detailed company financials, technical charting tools, or research reports on Robinhood. However, they did recently launch a website version of the app that shows basic stock charts, analyst ratings, earnings, and news headlines. The website also offers some interesting analytics that you won’t find from other brokers, such as the average price paid for a stock by all Robinhood users and a list of the stocks being bought by other Robinhood users with the same portfolio holdings as you. The lack of investor tools hasn’t mattered much to millennials, who account for a majority of the app’s users, as they are just as comfortable doing their charting and investment research on third party websites that offer most of these tools for free.

Trading High-Volatility Stocks on Robinhood

Besides limiting the universe of securities you can trade, there are two other notable drawbacks to trading on Robinhood. The first is that Robinhood limits your ability to trade so-called high-volatility stocks and ETFs (high-volatility is defined by Robinhood as levered ETFs and stocks priced under $3/share). If you sell one of these securities, Robinhood makes you wait until the next day to use those proceeds to purchase the same or another high-volatility security. This restriction particularly matters to traders looking to time the market’s short-term moves, as waiting an extra day to use your capital can be a significant burden on any short-term trading strategy. For example, if you sold 100 shares of SPUU (2X S&P 500 ETF) in the morning hoping to re-purchase them in the afternoon at a lower price you wouldn’t be able to. Robinhood won’t let you use the proceeds from that sale to buy back your shares in SPUU (or any other high-volatility stock) until the following day.

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Quality of Trade Execution

Another possible downside to using Robinhood is that there is some research out there that suggests part of the reason it’s free is because it has poorer execution quality on market orders than other brokers. Robinhood receives payments from market makers for directing its order flow through them, and this creates a conflict of interest for the trader, who all else equal, would want their market order to be sent to the market maker with the most attractive price as opposed to the one offering Robinhood the most compensation for the order flow. However, this is really only a concern if you are frequently placing large market orders, and can be mitigated by using limit orders whenever possible, where you set the maximum/minimum price you’re willing to pay/receive for your shares.

Customer Service

Customer Service is definitely one of Robinhood’s weaker points. The app has plenty of self-help articles in the support section. They are generally quick to respond to your inquiry within one or two business days but many users will note that their responses are pre-canned based on the topic of your inquiry, and this standardized response can be frustrating if it fails to address your issue.

Robinhood offers 24/7 phone support for any issue.

Is Robinhood Right for You?

In short, Robinhood may be a good fit for you if you are new to investing, aren’t looking to invest a ton of cash, and don’t care about having access to all the bells and whistles (charting tools, financials, and research) in the same place. If you are a larger investor or day trader that trades high-volatility stocks, it may be worth going with one of the more traditional brokers for fewer restrictions on using your capital and potentially superior trade execution.

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