Robinhood is good for the savvy trader who wants to explore multiple platforms and experiment with different brokerages. It doesn’t feature the full benefits of some brokerages.
The benefits of Robinhood, such as not requiring an account minimum and being able to trade cryptocurrency on the fly, are more than sufficient for you to download it and get started, but it’s not an end-all, be-all kind of app.
Robinhood won the overall best brokerage and trading app in our list, but as you can imagine, no app-based service is 100% perfect. The utility for the on-the-go trader that still works their nine-to-five is valuable.
Robinhood also has plenty of services that it offers, so you’re not stuck with just stocks; trading is fast and easy, setting up an account is quick, and it really is one of the best options that you could possibly ask for.
Pros & Cons
Robinhood is one of the first names in brokerages these days, in an app-heavy world with a population that relies on our phones. But does that make it the best, strictly because of how accessible it is? We wanted to find out.
As one of the most prominent stock trading apps, this digital-only stock broker service puts you in control of your stocks, cryptocurrency, and even options. However, it does lack a few features that we have to talk about.
Robinhood is an open trading app that allows anyone with access to the internet to invest their money, however much that may be, in the stock market and cryptocurrency.
They talk about making top-tier finance available to anyone, which is what they’ve definitely done ever since they made waves on phones across the US years ago.
With excellent security, customer service, and an unyielding ability to make sure that folks like you and I can trade stocks and crypto without succumbing to tons of fees and red tape.
- Stock Trading: Buy and sell stocks easily from your phone with a few taps and a quick confirmation; you’ll have access too 5,000+ US stocks.
- Cryptocurrency Trading: Crypto doesn’t sleep, and neither do you; you can trade whenever and begin investing right now.
- ETF Trading: Not just in it for Bitcoin? ETFs are an option as well.
- Options Trading - Offers commission-free trading on self-directed financial brokerage accounts.
Robinhood Commissions & Fees
Robinhood is a forever-free platform, meaning you don’t pay any fees to Robinhood just to buy and sell stocks or cryptocurrency. It’s a totally free option that has opened up investing to those with financial restrictions.
However, no business can just operate for free, even in the digital age. Robinhood incurs fees from the government, which are passed on to their customers (they are very transparent about this). You can learn about these fee specifics here.
It’s transparent and these fees are already rolled up into the fees that you pay other brokerages (such as those that have a $7.99 trading fee, for example).
Who is Robinhood Best For?
Robinhood is the best overall trading and brokerage app on the market. It’s second to none in terms of many features. While they may not meet everyone’s expectations due to some services being limited or not available, Robinhood meets all the needs of new and average investors.
We said overall because it’s also quite nice for seasoned investors as well; you don’t have to be a newbie in the world of stocks to get benefit out of Robinhood.
Even when compared against full-service brokerages, Robinhood still stacks up against many online cryptocurrency marketplaces as well.
This has two answers. One: Robinhood is a safe platform in terms of encryption and security. You can trust your money to stay with Robinhood for the duration of your trading, whether that’s in stocks, options, or cryptocurrency.
Second: Robinhood is insured, meaning you’ll be covered for up to $500,000 worth of securities, and $250,000 worth of cash claims (member SIPC).
Robinhood is a completely safe platform to trade on, and in the event that there is any issue, they’ll also cover your losses as long as it’s within those parameters.
For large-scaling trading, you should be using multiple platforms anyway, but for most of us the $750,000 combined will cover all of our bases.
Robinhood has limited trading options available, which is where they tend to fall short. In our opinion, they probably should have refined this service before allowing it to go live.
It still has a lot of catching up to do to other platforms (solely for options trading), but hey, everyone has to start somewhere.
Because of the fees and commissions structure of Robinhood, it’s actually one of the best options trading platforms for beginners until you can situate yourself with an investment plan.
To avoid fees from other brokers with more services for options trading, you typically need to be dealing with more cash so that the fees are almost negligible.
Robinhood is a great starter for this (and they may even catch up in terms of options trading by the time you decide to go full steam ahead with it).
While the app interface has definitely become more sophisticated since Robinhood’s inception, the entire app is still very beginner-friendly. Everything is streamlined to be easily accessible, and displayed in simple terms with an archive of valuable learning material ready at the tap of your finger.
Thanks to their information from Robinhood Snacks, their articles, and more information services, you’re able to learn about companies while staying in-app.
You don’t have to exit to external sources and read Bloomberg just to know what these companies are and what they do.
Because they don’t charge commissions, it leaves many people feeling skeptical about their services. Robinhood makes money by their premium service, Robinhood Gold, as well as several other factors.
Stock loans are another major way that they generate revenue, as well as cash management. Rebates and revenue generated from cash (which is different from cash income).
You can learn the ins and outs of where these revenue sources originate from right here. Robinhood is both for-profit and for-the-people, so you can expect a balanced agenda from them.
Compare to Other Brokers
Robinhood has commission-free investing, and tools to help shape your financial future. Sign up and get your first stock free.
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Robinhood has commission-free investing, and tools to help shape your financial future.