Robinhood Review 2024: Pros, Cons, Fees & How It Works

For options trades, the settlement period is the trade date plus one trading day. It makes trading so easy that it practically turns it into a game. This tends to drive active trading, or buying and selling stocks rapidly to turn a quick profit. According to online bitstamp review public database Crunchbase, Robinhood has raised a total of $5.6 billion from investors over 24 funding rounds. Robinhood was valued at $40 billion at its February funding round, substantially higher than the $11.7 billion valuation from its September 2020 round.

Investing for beginners with Robinhood gets you access to active investing strategy, IRA matching bonuses, and commission-free trades. But you’ll get the most of the app with Robinhood Gold premium features. Both brokers offer trading for zero commission on U.S. stocks and ETFs. Although both offer $0 commission trades on options, Fidelity levies a 65 cents fee per options contract. Likewise, Fidelity takes no commission on crypto trades, but it charges a spread of 1% on the execution price of crypto buys and sells.

But it’s lacking in some areas, such as the number of accounts it offers and the fact it doesn’t let you invest in certain popular asset classes such as bonds and mutual funds. On the Robinhood app, you can see data about different stocks like pricing info, news stories, and analysts ratings. You can use this info, coupled with other published information and your own trading strategies, to make investing decisions. You can buy stocks in shares or even fractional shares (as small as (1/1,000,000 of a share). This allows you to invest in pricier companies without such a large investment. You can also purchase stock by the dollar amount instead of by the number of shares.

As another example, if you contribute the $6,500 maximum to an IRA in 2023, the extra 2% of matching contributions would be worth $130, covering the membership fee and then some. Note that this protection is for broker failure, not for losses due to investing activities. While Robinhood doesn’t provide a direct phone number to contact, support is available through email at You can also use the app or website to chat or request a phone call.

1. As a brokerage firm, Robinhood is regulated by the Securities and Exchange Commission (SEC), which is designed to ensure fair practices.
2. It all happens within the app in a matter of minutes, with just a few quick questions that gather your personal information, contact details, Social Security number and means of funding your account.
3. Suddenly, r/WallStreetBets was shut down, and tons of retail traders were selling their shares, believing the stock had hit its peak.
4. It also allows investors access to OTC stocks and IPOs (although IPOs are not available in IRAs), and allows trades any time between 8 p.m.

There’s no opening minimum for brokerage accounts, but there is a $2,000 minimum for margin accounts. This is a regulatory requirement, so it’s not unique to Robinhood. They offer a Robinhood Cash Card as well, a debit card helps users grow their investment account. It does this by rounding up your purchases to the nearest dollar and investing the difference into your Robinhood account (similar to how Acorns works). It’s easy to withdraw money from Robinhood on your iOS or Android mobile device — or by using the website. If you can, it’s best to withdraw your cash into the same bank account you used to fund your account.

Buying and selling stocks

Robinhood’s current margin interest rate is 12.00% per annum on standard accounts. However, if you are a Robinhood Gold member, the margin rate drops to 8.00%. Google Chromecast, Apple TV, and Roku devices allow you to wirelessly mirror your mobile display to your much-loved living room TV.

Robinhood IPO Details

Robinhood itself is not a bank, but if you sign up for the Cash Card, your uninvested funds go to a network of banks. The Cash Card is issued by Sutton Bank, which is Federal Deposit dowmarkets Insurance Corporation  (FDIC) insured. It’s important to take note of where your funds are, between your investments and your Cash Card, to understand what portion is insured.

Does Robinhood have fees?

Robinhood’s customer support features text chat and phone support, although the latter is hard to reach. Robinhood does cover most of the basics in articles in its website’s Learn section. In addition, its Robinhood Snacks newsletter and podcast are easy entries for investment news that won’t overwhelm newbies. Users can automatically reinvest their dividends with Robinhood by toggling on the feature on investments that offer it. In today’s regulated and digital world, no fees are “hidden” in the sense that a broker conceals them from authorities and you. But there are fees you might not know exist, at least not until you gain experience.

Robinhood is best suited for intermediate or advanced investors. This will include experienced investors who are less reliant on customer support, broker investor tools and educational resources. Robinhood is able to offer free trades to its users because it roboforex review is making money from market makers and exchanges via a process called “payment for order flow”, or PFOF. If you want to opt into this service, you can try it free for 30 days. However, the free trial only covers the $5 monthly fee, not the margin interest.

It also includes a greenshoe option for 5.5 million additional shares.

Who Should Choose Robinhood?

Otherwise, Robinhood may ask you for extra documents to prove that you own the bank accounts in question. This platform’s commission-free rule applies to cryptocurrencies as well. The Robinhood Crypto account feature lets you trade various digital currencies such as bitcoin, dogecoin, and ether. The investment app eventually reopened trading on many of the stocks it had temporarily restricted, but its restrictions led to user retaliation and major lawsuits. In 2023, a federal judge dismissed a lawsuit brought by customers who were affected by the restrictions in GameStop trading.