Robinhood Review

Robinhood Review: Free Stock Trades?

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Robinhood Review & Summary: If you’re willing to give up some of the features of a full-service online trading platform, Robinhood might be the right solution. While giving up features in itself may sound like a downside, Robinhood has plenty of benefits to make up for the loss. To start, as a free trading app, it allows investors to buy a wide range of ETFs and stocks, without having to pay fees or commissions. It also offers real-time market data, but there are some compromises you need to consider before you jump on board with the goal of saving a bit of money.

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Quick Facts

  • Robinhood has a $0 account minimum and does not charge any commissions.
  • It’s best for frequent ETF/stock traders.
  • It’s an app, meaning you need to be comfortable trading on a mobile device.
  • The setup is ideal for individual taxable accounts and margin accounts.

Overview

As far as costs go, Robinhood is hard to beat. It’s free to trade on their marketplace, and there is no account minimum for basic users. They do have a Robinhood Gold margin account option, however, which has a regulatory minimum of $2,000, as set by the Financial Industry Regulatory Authority (so you won’t be able to get one cheaper anywhere else, either).

There are no annual fees and no fees for inactivity or ACH transfers, but there is a $75 ACAT fee for outgoing transfers. The trading platform is intentionally very simple, which means it lacks some of the features investors are used to. It is only an app, so there is no desktop or web version to access. The simple platform means you can access everything with ease, but it’s a “bare bones” tool–especially if you like having research tools available within your trading platform. While there is real-time market data available, you won’t find any built-in research tools.

This app is available for Apple Watch, iPhone, and Android devices. When it comes to trading, you can trade both stocks and ETFs (most U.S.-listed ETFs are available). If you need to get ahold of customer support, they offer phone support Monday through Friday, 9 am to 6 pm Eastern Standard Time. They also have an email support option.

Pros & Cons

The main place where Robinhood shines, obviously, is the almost 100% fee-free setup (other than the $75 ACAT fee for outgoing transfers mentioned above). The app is also very easy to use since the platform is intentionally kept simple. Signing up and funding your account is easy, and can be completed in about five minutes. If you’re approved, you’ll be notified within an hour. They use an instant verification process available for most major banks, so you won’t have to go through the hassle of verifying manually.

Everything is handled through the app, which could be a hurdle for some users. Additionally, they do not offer any tools or resources, meaning you’ll need to do your research elsewhere. You should also note that you can’t trade mutual funds or bonds, but they have over 5,000 options when it comes to stocks and ETFs.

Finally, Robinhood only supports individual taxable accounts so it might be a good idea to use Robinhood after maxing out tax-advantaged retirement accounts (like an IRAs or 401(k)s).

Last Updated: December 19, 2017

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