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Robinhood is a zero-fee broker that was established in 2013. It quickly gained huge popularity due to the smooth interface and the fact that it does not charge commissions for stock, options, or cryptocurrency trading. The company is also regulated by top financial authorities, including the US Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
While Robinhood’s key selling point is that it’s “free”, many other companies are also offering the same. However, the free tactic has brought in 10 million customers and mainly targets young first-time investors. Despite this, many might outgrow Robinhood fairly quickly due to limitations and outages. Let’s dive into our review of Robinhood trading.
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An important aspect of our crypto trading broker reviews is to ensure that the website is usable and take a look at what kind of experience it offers investors. In this case, Robinhood provides a safe, easy to navigate, user-friendly and well-designed trading platform. However, as a result, Robinhood’s customizability is limited.
Robinhood’s web trading platform and trading app have a very similar look and feel, making it easy to invest in whichever interface you prefer. Both provide a great user experience and design while we conducted our Robinhood review thanks to the simple, clear layout. Within minutes you’ll be able to buy and trade stocks or coins with ease.
While you can’t customize the platform which more seasoned investors might prefer, the layout is logical. Having said this, the opening screen when you log on shows a line chart that depicts your portfolio value. However, neither the X or Y axis has descriptions, making it confusing to understand. Robinhood reviews its platform consistently but changes in terms of data and customization seem to take a long time to manifest.
A helpful feature for side-by-side comparisons of stocks or coins is under the ‘collections’ tab when you click on a stock. You will be able to see all related tags to that stock/coin. If you click on a tag, you will see all stocks or coins that share that tag. This is a great way to see lists of similar companies.
The alerts and notifications are also a great function of Robinhood. You can set these for a variety of events:
| Company | Robinhood Financial LLC |
|---|---|
| Headquarter | 85 Willow Road, CA 94025 Menlo Park, USA |
| Year of Founding | 2013 |
| CEO | Vladimir Tenev |
| Website | robinhood.com |
| Available Languages | English |
| Customer Support | Email Support |
| support@robinhood.com | |
| Phone | +1 650-940-2700 |
| Licence | CRD#: 165998 |
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| Verified by | – |
A key aspect of our Robinhood review is payments, is it easy? What are the limitations? Thankfully, making deposits and withdrawals on Robinhood is both free and easy to do. However, the simplicity does have some drawbacks, for example, you can only use a bank transfer and larger deposits can take several days.
As noted, deposits on Robinhood are completely free of charge but can only be made using bank transfer.
You have the option to make an instant deposit in which your money will arrive immediately. Otherwise, your deposit will take 4 to 5 business days.
The instant deposit option has limitations:
Any transfers higher than the above limits will take 4 to 5 business days.
Robinhood won’t charge any fees for ACH withdrawals but if you wish to make a wire transfer, it’s very expensive:
Once you’ve made a withdrawal on Robinhood it’ll take 3 business days to appear in your account. There is a withdrawal limit of $50,000 per day.
Another limitation to note is that if you deposit money but don’t use it for trading and wish to withdraw it, you’ll have to wait 5 business days first.
You can also transfer stocks in or out of your account on Robinhood. You can make incoming stock transfers for free but outgoing stock transfers will set you back $75 per transaction.
Customer support is one of Robinhood’s main weak points. There is no phone support or live chat. However, you can contact the support team via email.
You can submit a request by choosing one of the topics and writing a short description of your problem. The customer service team will then respond via email in about a day. Other crypto exchanges offer 24/7 customer service which is almost to be expected with brokers.
Robinhood is regulated by the top-tier financial authorities and provides investors with strong protection. However, there are a couple of pitfalls in Robinhood’s security.
As the company is authorised and regulated by the FCA and is a member of SIPC, your investments are protected up to $500,000 if the company was to fold. This is a great piece of reassurance for those putting a lot of money into investments.
The fact that Robinhood is a US-regulated broker is a brilliant sign of its safety.
However, as Robinhood is a private company, it is not listed on the stock exchange which can sometimes provide extra security. Despite this, the company does make its financial information publicly available anyway.
Robinhood doesn’t offer negative balance protection either and does not hold a banking license.
Robinhood’s website security is strong with a two-step login which offers more peace of mind than a simple username and password.
Despite being secure, the website wasn’t always completely reliable during our Robinhood review. For example, both the mobile app and website suffered from significant outages when the market surged in February and March of 2020. Robinhood explained that the systems could not handle the “unprecedented load” and promised to improve their systems.
Firstly, let’s take a look at what cryptocurrencies can be traded on Robinhood. Currently, you can trade Bitcoin (BTC), Bitcoin Cash (BCH), Bitcoin SV (BSV), Dogecoin (DOGE), Ethereum (ETH), Ethereum Classic (ETC) and Litecoin (LTC) on Robinhood’s platform.
You can also track price movements, news and data for ten other coins. Robinhood allows you to trade cryptocurrencies on the same account that you use to trade other equities. This is a unique and convenient option for many, allowing you to keep all of your investments in one place. Of course, you can also buy the above coins without any fees and the coins will be available in your account immediately.
However, one caveat many investors might disagree with is that when you buy cryptocurrency on Robinhood, you have to keep it on Robinhood. This means that you cannot transfer your coins to an offline wallet or use them to make third-party transactions. The reason you cannot withdraw crypto coins is because you don’t physically own them on Robinhood, you own a derivative which you can trade. For example, Robinhood Bitcoin will remain on Robinhood and cannot be used elsewhere. This has been commented on within many Robinhood review discussions on Reddit.
Yes, it really is true, trading on Robinhood is completely free. There are no commission charges or foreign exchange fees. To make it better, Robinhood doesn’t charge an inactivity or withdrawal fee.
In terms of other fees unrelated to trading, you can see a list below:
As you can see, Robinhood is fairly low-cost and the ability to buy stocks and cryptocurrency for free is a huge incentive for many.
Robinhood mainly operates in the US and has recently launched an early access version in the UK. It is regulated by top financial authorities – the US Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
In terms of limitations, investors can only hold long positions on stocks and can only buy in major US markets. All cryptocurrency coins aren’t on offer either as they need to be approved by financial authorities beforehand.
Currently, you can only set up an account with Robinhood in the US. However, the UK version is now in early access and you can sign up to test it out. The official UK launch is set to be later this year.
Setting up an account with Robinhood is user-friendly and very quick, it only takes around 10 minutes to submit your application! It then will take less than a day for your account to be fully verified.
If you wish to open a Robinhood account in the US you must ensure that:
The steps to then open an account are:
Once you have been notified via email that your account has been approved, you can now deposit money into your account and begin trading.
You can do it via the Robinhood app or website, whichever you prefer, both interfaces are very similar.
Firstly, you will need to link your bank account. To do so on the website, you simply need to:
You can now deposit money from your linked account onto Robinhood by taking the following steps:
Your deposit should arrive immediately if using instant deposit. It’ll only take longer if you exceed the limit.
Now that you have money deposited into your Robinhood account, you can begin investing in cryptocurrencies.
You can transfer your funds back into your linked bank account on Robinhood on either the web or app.
Withdrawing money from Robinhood usually takes 3 business days.
Trading financial products carries a high risk to your capital, especially trading leverage products such as CFDs. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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