Open navigation Sign in Create Account Open search Brokerage Reviews Robinhood Advertiser disclosure Robinhood® review 2021 VISIT ROBINHOOD BY JAMES ROYAL JIMROYALPHD Bankrate senior reporter James F. Royal, Ph.D., covers investing and wealth management. His work has been cited by CNBC, the Washington Post, The New York Times and more. About our Review Process Bankrate reviews brokers and robo-advisers based on how well they’re able to help consumers achieve their financial goals. Here's how Bankrate makes money. Best For Free trading Trading cryptocurrency Customers who prefer trading from a mobile device Robinhood has taken the brokerage industry by storm since its debut in 2013, with millions of clients flocking to the no-commission broker. Of course, the big draw for investors is the ability to trade not only stocks and ETFs for free, but also options and now even cryptocurrency. As long as no major broker offered no-commission trades, Robinhood looked like a standout. But with the industry shifting to zero commissions as the norm, Robinhood’s shortcomings are more evident. That’s not to say it doesn’t have some key strengths, including its highly usable mobile app, but its value proposition is much less clear when full-service brokers also charge no commissions. While it’s far from the feature-rich experience of a full-service broker, Robinhood can serve as a solid trading platform for those who need to get a trade done at the lowest possible cost. Robinhood at a glance Star Rating 3.5 Cost: 3.5 of 5 Accounts and trading: 3 of 5 Research and Education: 3 of 5 Mobile: 3.5 of 5 Customer Experience: 3 of 5 Minimum Balance: $0 Cost per stock trade: $0 Cost per options trade: $0 Promotion: Free share of stock Commission-free mutual funds or ETFs: All No-transaction-fee mutual funds: None Securities tradable: Stocks, ETFs, options, cryptocurrency Customer service: Limited email and chatbot Account fees: $75 transfer out fee Mobile app: Robinhood offers the “Robinhood” app on the Apple App Store and Google Play Store. Top feature you’ll love Intuitive mobile app While investors can also use the web-based interface to trade, Robinhood just feels like a mobile-first company, and so its most recognizable trading platform is the mobile app. The app is stripped-down, making it simple to navigate, especially once you understand how the app’s icons function. You can quickly move from screen-to-screen, investigating stocks and placing orders. From a convenient search bar at the top of the screen you can pull up a stock’s chart over any timeframe. It functions smoothly and without delay, so you’re not hanging around waiting for it to load. You’ll get the stock’s vital statistics – its highs and lows, market cap and dividend yield. It also provides a news feed, a composite of analysts’ rankings, and a brief profile. If you’re ready to buy or sell, a trade button scrolls with you down the page, allowing you to submit an order at any moment. A simple order entry allows you to type in the number of shares or options contracts you want and shows how much buying power you have. From there, just swipe up to place the trade. You can place market orders, limit orders and stop orders and a couple other types. Beyond placing trades, you can also quickly maneuver around the app to find your portfolio, account value and access a number of account management options. Pros: Where Robinhood stands out Free trading Stocks, ETFs, options, and cryptocurrency. Check, check, check, and check! You can trade them all for free on Robinhood, and that’s a huge boon to investors, especially options investors. While investors can find free stock and ETF trades at most brokerages these days, the real differentiator for Robinhood is its free options trading. As options traders know, it’s easy to rack up a huge bill if you’re trading in and out of the market. That’s because brokers charge a fee for each contract. That structure quickly piles on the costs. But at Robinhood? Zilch. It’s a great choice for options investors looking to get into the market. Of course, beyond all these freebies, Robinhood allows you to trade some cryptocurrencies commission-free, too. And you’ll be able to do so 24 hours a day, seven days a week. You can buy cryptocurrencies directly and not via futures, which is more typical now. Account minimum and quick funding With no account minimum, Robinhood is super-friendly to investors, but it’s funding process is even better. If you’ve ever tried to fund a brokerage account before, you know it can take a while to get the funds into the account, even if you move the cash in right as you’re opening the account. That’s why Robinhood’s funding stands out. Robinhood gets some money into your account immediately. By using instant verification with major banks, Robinhood allows you to avoid the hassle of traditional verification of reporting tiny deposits into your bank account. This means the app can move up to $1,000 of any deposit into the account immediately, with the rest following a few days later. It gets you in the game faster. Robinhood Gold Robinhood Gold is the company’s program to provide research and allow you to buy securities with borrowed money, or margin. Robinhood charges $5 a month for the program, which offers research on 1,700 companies from Morningstar, Nasdaq Level II quotes and access to margin loans. The subscription price includes the interest on your first $1,000 in borrowing, and subsequent amounts are charged at an annual rate that's been lowered from 5 percent to a modest 2.5 percent. The broker charges loan interest to your account every 30 days. If you don’t have cash in the account to pay the monthly fee, it’s rolled into your margin balance. Potential borrowers should note that any margin account must have at least $2,000 in it, per industry rules. With Gold, you’ll have access to a higher level of instant transfers, up to the value of your portfolio, starting at $5,000 up to a maximum of $50,000. So you can quickly move funds into your account, beyond even the basic $1,000 available to everyone. Fractional shares Robinhood is great for fractional shares, whether you want to buy or reinvest your dividends. You’ll be able to place a trade with as little as $1, and you can buy as little as one millionth of a share. Robinhood also extends this program to stocks that may not be featured in partial-share programs at other brokers. Most stocks trading above $1 per share and with a capitalization of $25 million are included in the program. Robinhood’s program helps you get all your money into the market rather than having to save up enough to buy that high-priced tech stock. Quick comparison of Brokerage options: BROKERAGE OVERALL RATING AVG. COST PER TRADE ACCOUNTS AND TRADING $0 3 of 5 Read Our Review $0 3 of 5 Read Our Review $0 4.5 of 5 Read Our Review $0 4 of 5 Cons: Where Robinhood could improve Limited free research and educational components You can’t have it all when you’re not paying anything for trades, and it really shows in the limited free research and educational components being offered at Robinhood. This is not a killer for the right kind of investor – savvy and experienced – but may be a turnoff to newer investors who often need more direction from their broker. Of course, as part of its Gold program, the broker provides ratings from Morningstar, while offering a feed of news and analysis from popular websites for each stock. And the app does offer some basic charting functionality too. But it’s not nearly at the level of full-service brokers such as Charles Schwab or E-Trade. Both of these also offer solid free education for investors who want to power up their skills and knowledge. No mutual funds available Mutual funds are one of the most popular ways for individual investors to take part in the market, but in the case of Robinhood, investors don’t have that choice. It’s another area where traditional online brokers fare well against this disruptor, because they’ll offer thousands of no-transaction-fee funds and thousands of other fee funds, too. Extremely limited account types Robinhood is not a full-service brokerage, so don’t expect the same level of account types that you’d find at rivals. In fact, expect just one account type, the individual taxable account. So no IRAs, no joint accounts, no 529 savings accounts, etc. The broker says that it hopes to expand in this area, but doesn’t seem to have done much so far. That’s a real knock for investors who would like to expand their relationship but must use another broker for their other account types. Selling your order flow So here’s one of the secrets to how Robinhood can offer you free trades – the company is selling its order flow to high-frequency traders so that they can anticipate the market and get better prices on their trades from people like you. That is, Robinhood’s practice allows these traders to front-run you (or other clients) to squeeze out pennies (or fractions of pennies) on each trade, buying from you at a lower price and selling to you at a higher price. The broker’s subterfuge around this issue from 2015 to 2018 led the Securities and Exchange Commission to fine it $65 million in late 2020, with the broker not admitting any wrongdoing and now saying that it cleaned up its act. For long-term investors, a few pennies on a trade is not a substantial issue. For those playing the short-term trading game, it does make it more difficult to scalp extra dollars off each trade. Finally it’s worth noting that other major brokers also rely on selling order flow, even more so now that the industry has moved to a “no commissions” model of trading. So it’s not as if Robinhood is the only broker doing this (legal) practice. Customer support Robinhood’s customer support is fine if you have one of the many questions that’s easily answered by the prepackaged set of responses on the broker’s help page or that is available by the chatbot. Move only a bit farther afield, however, and you may be hard-pressed to find a solution without emailing customer service. Those needing an immediate response via phone may have to search a bit to find the number, however. In an age where Fidelity or Schwab can answer your questions via phone or chat in seconds and provide a helpful and friendly response, Robinhood looks increasingly deficient here. Bottom line Now that the major online brokers are offering no-commission trading (at least on stocks and ETFs), Robinhood looks a lot more like a one-trick pony in a field of thoroughbreds. That said, Robinhood can work well for many investors who don’t need all the extras offered at rivals. Besides free stock and ETF trades, Robinhood also offers free options trades, and that still compares very favorably against the major online players. Plus, you can trade cryptocurrency at no cost, when that’s still a pricey undertaking at most places. Newer investors may find the lack of guidance at Robinhood challenging, especially with little or no research on tap, though Robinhood Gold helps address this. Fractional shares are a nice perk, but Robinhood offers only one account type and limited customer support, so you may feel that you can’t grow with the broker. Investors who are looking for better research and education components can turn to Fidelity, Schwab, or Merrill Edge. If you need a solid mobile app, check out E-Trade which brings its Power E-Trade platform to smartphones. If you need the full range of services or securities from a broker, check out TD Ameritrade or Schwab. How we make money Bankrate is an independent, advertising-supported publisher and comparison service. Bankrate is compensated in exchange for featured placement of sponsored products and services, or your clicking on links posted on this website. This compensation may impact how, where and in what order products appear. 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