Robinhood, founded in 2013, is a US financial services company headquartered in California. Their main selling point is their offering of commission-free investing. However, many other competitors now offer this too. Their mobile platform is user friendly and therefore attracts a younger generation that is just starting to trade and also want to trade on the go. They are set to expand to the UK market soon.
|Nationalities||USA Clients only|
|Account Funding||$0 and $2,000 for margin|
|Is a corporate Account Possible?|
|Sign Up process||Fast|
|Funding options||Bank transfer|
|Forex: Spot Trading||NO|
|Cryptocurrency||YES through Robinhood Crypto|
Regulation and Trust
Robinhood is currently registered in all 50 states, Washington D.C., and the Commonwealth of Puerto Rico. They are regulated by the Financial Industry Regulatory Authority (FINRA) and the US Securities and Exchange Commission (SEC). However, they are not listed on the stock exchange and they do not offer negative balance protection.
Commissions & Fees
There are no fees to open an account, maintain an account or transfer funds into an account. Robinhood does however charge a regulatory transaction fee of $22.10 per $1,000,000 sells. Their trading activity fee costs $0.000119 per share (equity sells) and $0.002 per share (options sells) with a maximum fee of $5.95. If you would like to open a Robinhood Gold account, it will cost you $5 per month. Included in this fee is $1000 of margin. After this amount, a 5% annual interest rate is charged on any amount borrowed. In order to transfer assets out of Robinhood, a $75 fee is charged.
10 million accounts have been opened with Robinhood. More than 3 million accounts were opened in 2020 with half of the account openers being first time traders. Robinhood currently has over 140 thousand people following them on Facebook and 92 thousand followers on Instagram. They are also present on Twitter and LinkedIn. Their financial news podcast @RobinhoodSnacks has had over 10 million downloads to date.
The overall experience of trading with Robinhood is user friendly and minimalistic. Nothing is overly complicated, targeting a millennial market. Their mobile application is fast, modern and really takes traders user experience into consideration. They offer their app in both light and dark mode, as asked for by their customers. Opening an account is quick and can be done through the app in minutes. You simply need to answer a few questions, and should you be approved you’ll be notified within one trading day.
Functionality and Tools
Robinhood offers basic trading tools. Their application offers basic watch lists, stock quotes and charts. They also offer recent news and a trading podcast. Whilst this simplicity is great for beginner traders, it has some drawbacks. Users are limited to only one watch list; no technical analysis and are unable to set price alerts for stocks they do not hold. Robinhood also lacks depth in terms of research. If you would like access to Morningstar research reports you’ll have to upgrade to a Robinhood Gold account. The Robinhood Snacks blog is a great tool that can be used to gain an understanding of the market each day in simple terms.
One great feature included in both the mobile and web platforms is the collection’s tools. You can organize stocks by sector or trade. These collections are sortable on the web platform which allows you to compare stocks side by side.
Robinhood offer over 3500 US stocks and over 1000 global stocks. They also offer ETFs, options and cryptocurrency. They provide users with the option to either trade on their web platform or their downloadable mobile app. Both platforms have similar, basic features. The application is the chosen platform for most users as it is great for on the go trading. It can be downloaded on both Android and iOS devices from their respective app stores. The Android version has been downloaded more than 134 thousand times and the iOS version is ranked number 4 in Finance and received a 4.8 star rating.
Robinhood’s customer service is difficult to find. The best way to get in contact with them is through their social media or email. A short list of FAQs is also offered and the website itself is easy to navigate, however, we missed the live chat option that is available on most competitors’ sites.
Robinhood appeals to a younger generation who are new to trading. Their platforms are user friendly and there aren’t too many features which may overwhelm a new trader. If you are more of an active trader that enjoys charts and analyst research, then Robinhood lacks the tools and amenities you love.