Robinhood

Name: Robinhood
Rating: 4.2

Is This Your Business?

4.2

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78 User Reviews

4.2

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78 User Reviews

The Good

The Bad

Bottom Line

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Author: Kaitlyn Short

LAST UPDATED: September 21st, 2023

Robinhood opened its doors to investors in 2014, making it a fairly new brokerage firm. The company was started by two Stanford graduates, Vladimir Tenev, and Baiju Bhatt, who began their careers building trading platforms for large financial institutions. This experience led them to a major realization that brokerage firms pay little to nothing to place trades for their investors but still charge up to $10 as commission fees. Thus, Robinhood was created to shake up the industry and democratize access to financial markets. Today, Robinhood offers its traders U.S. securities and charges no commission fees. It mainly caters to millennial investors looking to dip their feet into the market without having to pay high commission fees to their brokerage firms. The company's mission is to empower this new generation of investors and shrink the gap between the "haves" and "have-nots."

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The Good

Pricing and fees
Mobile capabilities
Scheduling feature

Those that decide to use Robinhood for their trading and investing needs can expect a number of quality services and features upon getting started. Prospective clients who use Robinhood will be able to take advantage of the following items:

Pricing and Fees

Robinhood charges $0 commission fees for its securities. In an industry known for charging up to $10 for securities and requiring $500 to $2,000 account minimums, Robinhood's pricing structure is fairly shocking. The firm's creators believe that there are millions of investors out there who use brokerage firms, place more than 10 trades per month, and yet end up paying thousands in fees each year. Unlike these firms, Robinhood doesn't charge steep fees for placing trades, doesn't have a mandatory account minimum to start a trading account, and doesn't have the same operational costs as other big name brokerage firms. So, they can afford to keep costs low and increase their clients' savings. Existing brokerage firms claim their services, like research and educational tools, are worth the fees they charge their clients. Robinhood disagrees. It believes that millennial investors-its target audience-don't care for paying money for services they may not use or may find inadequate. Instead, young investors tend to look elsewhere for free resources that'll help them make informed decisions.

Mobile Capabilities

The firm's trading platform is a mobile app available on android and iOS smartphones and tablets. On the platform, users have access to any of the 5,000+ stocks and ETFs listed on the US stock exchange, meaning the firm doesn't put a limit on the number of stocks users can access at the $0 commission rate. The app's sign up process is fairly straightforward and takes a little time to complete. Users have hailed the app for being easy to use and easy to link their bank accounts to. The app doesn't require a routing number nor does it take days to verify users' bank information. Instead, it uses micro-deposits to validate users' accounts.

Scheduling Feature

In addition to its commission-free stocks and ETFs, Robinhood offers scheduled deposits. This is a new feature where users can automatically schedule transfers on a weekly, biweekly, monthly, or quarterly basis. Another one of its new features is its advanced order support tool. Investors can use this feature to enter specific orders as good for the day or good until canceled (GTC). All of these aforementioned perks make Robinhood ideal for investors, especially millennial investors.

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The Bad

Limited trading tools
Looking ahead

The Robinhood service, while convenient and accessible, also comes with a number of limitations. Prospective users should consider the following drawbacks before creating an account and getting started on the platform:

Limited Trading Tools

The firm only offers a mobile app trading platform. While great for millennial investors who are always on their smartphones or tablets, this means the brokerage firm doesn't offer advanced trading tools. Usually, only desktop platforms have these advanced features like charting mechanisms and volatility indicators. Without these tools, the firm lacks critical features to help better inform its investors. Speaking of informing users, the firm also doesn't offer additional resources like education materials or research tools. While its creators believe that millennial investors tend to not use these features, we're pretty sure that investors would enjoy the added benefit of having their educational and research resources under one roof since it will save them time and energy from looking elsewhere.

Looking Ahead

Robinhood doesn't charge its investors any hidden fees, so for now, its users can rest easy knowing they're truly executing commission free trades. However, in the future, Robinhood may need to change its pricing structure to make money and keep its doors open. Eventually, the firm will charge for premium services if their traders decide to use them. The firm will also begin offering margin trading, which will allow its users to borrow money from the brokerage firm to cover a certain percentage of the securities' costs. The firm will then make money off of the interest rates they'll charge on the loans. Potential clients looking to join Robinhood should be aware of these impending fees. Furthermore, the company only offers stock and ETFs trades. Investors currently cannot trade options, bonds, mutual funds, and other securities. For investors who are interested in investing in a variety of securities to diversify their portfolios and mitigate financial risks, this detail is fairly disappointing. Additionally, the firm doesn't offer ACAT transfers, which means traders cannot transfer their existing brokerage assets into Robinhood. Another major downside to the firm is the fact that it's not the first brokerage firm to try out commission free trades. Zecco was a brokerage firm that implemented this model and had to frequently change its pricing structure because of how difficult it was for the company to stay afloat. Eventually, Zecco gave up, determined the model wasn't successful and instead, merged with TradeKing. This story could dissuade users from joining Robinhood since the firm's business model could be unfeasible in the long run.

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The Bottom Line

Robinhood is a great brokerage firm with the commendable goal of democratizing access to financial markets. It's especially ideal for novice and millennial investors looking to dip their feet into the industry without paying high commission rates. The brokerage firm offers thousands of individual stocks and ETFs to invest in, all at the touch of a button. Its mobile app is easy to use and boasts a quick and simple application process. However, the brokerage firm doesn't offer a variety of investment choices so individuals looking to trade the likes of options and bonds will have to look elsewhere. Furthermore, traders currently with another brokerage firm won't be able to transfer their existing account to Robinhood. This detail severely undermines the firm's ability to steal clients away from the big name firms. At the end of the day, our main concern is whether the firm's commission free rates are feasible in the long run, especially since similar firms have had to close their doors. Only time will tell whether Robinhood's business model is, in fact, sustainable.

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User Reviews

Star Rating

4.2

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78 Reviews

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4 grade

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3 grade

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Santow Shamon Gurnee, IL

Robin Hood makes trading stocks very easy. You don't need to be an expert to get started. The start up process is pretty easy and you are investing in stocks in just a few minutes. The app itself is pretty easy to navigate through. There's even information on stocks including trading history and it's highs and lows and average return rates. Create your custom portfolio of your invested stocks or a list of stocks to watch. Their always-ready customer service bots may not seem ideal but they have always answered every question I have without ever needing to speak to an actual person. Easy to transfer money from your bank account for immediate investing or withdraw your investments and deposit to your bank. The only con I have is with the app freezing up sometimes. Recommended.

4 years ago

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A White South Bend, IN

Robinhood is a good place to start day trading if you don't know how to do it. It's really easy to link a bank account and add money. There is a clear place to see your initial investment and what you've made or lost along the way.

1 year ago

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David Stickles West Jordan, UT

In general I really like this platform. Very easy to get into investing with very little money commitment. You get to go in with as little or as much as you’d like. Some issues with trades being blocked but that was a very niche situation. Overall a very cool concept.

3 years ago

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Rachelle Orlando, FL

As an everyday millennial I was confused and speculative in buying and selling stocks but Robinhood gave me access in a way I never thought imaginable. Now little old me is making money off the stock market. I have them four starts because they give you access and explain how to use the app but that’s pretty much the extent of what they do. It would be nice if they could give tips, pointers, classes or something on how to proactively trade. Kind of figure it out on your own or do research yourself. Might lose some money at first because of that.

3 years ago

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Karen Torino Tallahassee, FL

Robinhood has been experiencing a lot of security issues lately, per their emails. They seem to lack some important stocks, but overall its not bad for stocks. My favorite feature is the ability to program when to buy or sell a stock based on it reaching a certain price.

3 years ago

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Eban Beltran Arlington, TX

Great service regardless of what’s in the news right now. They had to meet regulations but admittedly did a poor job of explaining that to their customers. Definitely not a service for the serious investor as it lacks even the most basic reporting to easily view the composition of your portfolio across companies and sectors.

4 years ago

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Karson Greenburg Salt Lake City, UT

I use Robinhood daily and am very satisfied. Its tricky to find a company that you can sincerely trust with your money and Robinhood has never let me down. It is also simple to carry out trades and keep and eye on your portfolio. They also offer option trading which is a plus.

4 years ago

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Ryan Harpenau Fayetteville, AR

Robinhood has a lot more stocks to invest in than Cashapp which is awesome and they also give new costumers a free share of a stock which is a great deal because you make money either way with it. I did have trouble connecting my bank account so that would be my only complaint.

4 years ago

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Tony Riverton, UT

Just opened a Robinhood account a couple of months back and use it exclusively to trade options. I don't love the ease of seeing my account positions and you have to go into messages to see trades. Other than that, it's extremely easy to make trades and lighting quick to settle funds.

4 years ago

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Jec Canby, OR

This seems to be a company for the younger generation. My son uses Robinhood and has been very happy with them. I see a lot of Robinhood come across my desk at work (tax) as well.

3 years ago

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Britni Laidler Lindon, UT

Easy to use, I like that you can pick some stocks to watch. Wish there was a little guide to explain things to you. As a newbie it would have been nice. But overall I really enjoy it!

3 years ago

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Josh F Chandler, AZ

Investing was overwhelming at first but Robinhood made it easy for me to feel comfortable. Analyst ratings were very helpful.

1 year ago Edited August 3, 2023

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Becca Amiot Salem, VA

I recently started using Robinhood to get experience with stocks. I think it's great for beginners learning about investments.

3 years ago

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Sirdriz77 Fairfield, CT

I've had an account for a few months now and it's easy to use and understand. I'm not very experienced with online trading platforms and I didn't find it hard to figure out.

3 years ago

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Mason Allen Provo, UT

A simple way to get into stock trading for beginners like myself. Easy to navigate app interface & simple research information makes this app a good choice for trading.

4 years ago

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Shauna Lyons Omaha, NE

Easy to use. Was my first time buying stock. But walks you right through process. Only wish notifications when stock should be sold, I have no ideal

3 years ago Edited January 1, 2022

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Juanita Morrison Columbus, OH

I learned a lot and made a earned a few dollars from the free stock. They send useful information for the beginner trader.

3 years ago

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Taylor Larson Nakhon Sawan, 60

I liked using Robinhood because it introduced me to stocks and was easy to use. I liked how I did not have to pay fees on trades.

3 years ago

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Jodianna Maitland, FL

Good way to dip yourself into investing. Robinhood is a great way to start investing but can be a bit tricky to navigate at first.

3 years ago Edited September 14, 2021

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Nate Ashby Provo, UT

Ok Robinhood is suuuuuuper user friendly. I had never dabbled in the stock market and found myself having a blast doing it for the first time.

4 years ago

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Jason Atlanta, GA

Robinhood was the first mobile investing app that I used and it was super easy to use.

2 years ago

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Frank Rivera Lynnfield, MA

I enjoy the free trading platform. Its the only credible app where you can invest in crypto without fees.

3 years ago Edited January 14, 2022

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Colby

The Robinhood platform makes it easy for me to dabble in stocks!

1 year ago Edited August 8, 2023

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jakira johnson Tallahassee, FL

I DECIDD TO USE ROBINHOOD BECAUSE IT LOOKED NICE AND WAS EASY TO USE.

3 years ago