As a long-time FOREX trader I was quickly captured by the attraction of the crypto-world. Besides my fascination for trading, it has always been essential for me to understand the underlying technology and ideology. I am still active as a trader today and try to simplify the entry and trading for beginners by my articles and pass on my knowledge. That is why I have been working as an editor for TradersBest.com since 2019.
Robinhood is a very popular US broker that’s gained many fans due to its easy-to-use platform and zero commission pricing model. Robinhood is best known for its stock and ETF trading services, but it now also offers free cryptocurrency trading. It’s worth pointing out that Robinhood is not available for UK users – check out our XTB review instead UK!
Robinhood may be the broker of choice for many traders, but how do you know if it’s right for you? In this review of Robinhood, we take a close look at every aspect of the broker to help you decide. We’ll explore its usability, platform, fees, payments, customer service, safety and much more.
Robinhood has a new customer offer that rewards you with one share of free stock when you sign up and link your bank account to your trading account. You can easily link your bank via the Robinhood web platform or mobile app by tapping the account icon on the right-hand side of the screen, then click banking, add new account and follow the instructions.
The free share is chosen randomly from Robinhood’s inventory of settled shares. The value of the share can be anywhere between $2.5 and $225 and fluctuates based on market movements.
Our Robinhood review UK found that the broker chooses companies based on the price of each share, selecting the most popular companies with the highest market capitalisation on the platform.
The new customer offer terms state that there is a 98% of the free share having a value of $2.50 – $10.00.
Usability - How well does Robinhood perform?
Our Robinhood trading review found that this broker really stands out when it comes to usability. This is a very modern, online-first broker that’s specifically aimed at attracting new investors and millennials, and as such the platform is extremely user-friendly.
The broker uses a clean white and green colour scheme and is very laid out with great search functions so that you can easily navigate to what you need within seconds. This is the same for both the web platform and the Robinhood mobile app, which is very intuitive and runs smoothly while on the go.
Our Robinhood review found that the broker has actually won several prestigious awards for its design and user experience. These include the Apple Design Award, the Google Material Design Award, and Fast Company’s Innovation by Design Award, which proves it’s a pretty outstanding platform. For those in the UK looking for a user-friendly broker app, you can find out ‘is Libertex legit?‘ right now!
Robinhood also has some useful features that add another dimension to the platform. For example, it recently introduced the Profiles feature, which allows you to customise your public profile. You can also search other users’ profiles to check out what they’ve traded and invested in.
If we had one criticism about Robinhood in terms of usability, it’s that the actual trading platform has very limited customisability.
Our review of Robinhood found the broker offers three account types – Instant, Gold and Cash. Let’s take a look at the differences between each account.
Robinhood Instant – This is the standard account and is the account you’re automatically assigned when you sign up. It provides access to instant deposits, extended-hours trading and margin trading. Another benefit of this account is that you don’t have to wait for your funds to process when you sell stocks or make a deposit of up to $1,000.
Robinhood Gold – The main difference between a Standard account and a Gold account is that Gold accounts give you greater buying power and allow you to make larger instant deposits up to $50,000. It also has no interest on the first $1,000 margin debt, live market data and additional research tools. You need to pay $5 a month to upgrade to a Gold account.
Robinhood Cash – This is the most basic account and doesn’t provide access to instant deposits or settlements. You can downgrade to a Cash account at any time. The Cash account is best if you’re not interested in margin trading.
Unlike some other brokers, Robinhood doesn’t charge an inactivity fee for any of its accounts.
Robinhood offers some of the lowest fees of all the brokers we’ve seen. For starters, you can trade stocks, funds and options without paying any commission whatsoever.
The only fees you need to look out are the small custody fees for ADRs (around one to three cents per share) and the margin rate, which is 5% per year. Whie this margin rate isn’t the smallest out there, it is smaller than that charged by other popular US brokers like Webull. To get an idea of how Robinhood matches up against another major US broker, read our review of Fidelity.
You can even trade cryptocurrencies for free on Robinhood, something that most other platforms charge for. This means you can buy and sell Bitcoin and other cryptocurrencies with zero frees.
Our Robinhood review UK found the broker also has very low non-trading fees. There’s no deposit fee or inactivity fee, so Robinhood really is one of the cheapest brokers around. If you’re from the UK, you may be looking at alternative brokers, and asking yourselves questions such as ‘is Forex.com safe?‘ – for UK users, it certainly is!
Trading Platforms - What is the trading platform like?
All trading and investing that takes place on Robinhood is done on its proprietary trading platform – it isn’t compatible with any third-party platforms. Like other brokers such as Trading 212 – which you can read more about in our Trading 212 review UK – the Robinhood platform is web-based, so there’s no need to download any software.
As we covered earlier, Robinhood’s trading platform is very well designed and user-friendly, but it is a bit limited when it comes to advanced trading tools.
Robinhood also offers a mobile app platform that is available on iOS and Android and is free to download.
Trading Payments - Review of Robinhood payment options
Robinhood is pretty limited when it comes to payments as you can only make deposits and withdrawals, unlike at some other brokers where you can also use bank cards and e-wallets.
On the plus side, there are no fees for deposits. Deposits are also instant up to a certain amount – $1,000 for Standard accounts and $50,000 for Gold accounts. Any amount over these limits may take up to five business days to reach your account.
Robinhood doesn’t charge for ACH withdrawals, but there is a fee for wire transfers – $25 for US wire transfers and $50 for international wire transfers. Withdrawals typically take three working days, and you can withdraw up to $50,000 each day.
Our review of Robinhood also found you can transfer stocks in and out of your account. It’s free to transfer stocks in, but there’s a $75 fee per transaction for transferring stocks out.
Customer Service - Our Robinhood Review UK review of customer service
This is another area where Robinhood doesn’t particularly stand out. For starters, our review of Robinhood found you can only contact the customer service team by email, whereas most other brokers offer at least one additional contact option such as phone or live chat.
When we tested Robinhood’s customer service, we got a reply back in a day and found it to be helpful. However, it’s worth noting that Robinhood is rated just one star on Trustpilot and there are quite a lot of reviews criticising the broker’s customer support.
Our review of Robinhood found that this broker also has a help centre where you can read solutions and tips for solving common issues.
Regulation and Deposit Insurance - Is Robinhood safe?
Robinhood is a licensed online broker that is safe and secure to use. It’s registered with the US Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC).
This means that Robinhood stocks, funds and options traders are protected up to $500,000 (including $250,000 for claims for cash). Robinhood doesn’t hold a UK operating license as it doesn’t operate in the UK, but it is still a safe platform to use.
Robinhood is not a publicly-traded company and as such it discloses only limited financial information,
Robinhood is also a secure crypto trading platform. This is also a big concern when it comes to crypto exchanges – for example, one of the common questions we get is, is Coinbase safe?
However, although it’s secure, Robinhood crypto accounts are offered through Robinhood Crypto. This is a separate entity and isn’t a member of FINRA or SIPC, meaning cryptocurrency traders on Robinhood are not protected by the same compensation schemes as securities traders.
Here is some extra information about Robinhood
Wondering what sets Robinhood apart from the rest? Here are some of the broker’s best additional features.
Cash management – Robinhood offers a cash management feature which allows you to use the app to get your paycheck, pay bills, send checks and more. You can even earn 0.30% APY on your uninvested cash while still having full access to it. There’s also a Robinhood debit card that you can use at over 75,000 free ATMs and anywhere MasterCard is accepted. Best of all, Robinhood’s cash management features come at no extra cost.
Referral program – There is a referral bonus available to all Robinhood users. For every person you invite to the platform, both you and your referred person will get free stock once they’ve signed up and linked their bank account. You can receive up to $500 worth of reward stock each year, so there’s plenty of freebies up for grabs.
Learning resources – Our Robinhood review UK found that this broker has a really impressive collection of educational materials that can help beginners get to grips with the world of trading and investing. There is a huge library of investing guides, as well as daily news and even a podcast, so you can learn in the way you prefer.
Fractional shares – One of the things that makes Robinhood ideal for beginners is that it offers fractional shares. This means you can trade and invest in top companies from just £1, which is a good way to ease yourself into stock trading without risking large amounts.
Morningstar research – Robinhood Gold accounts come with access to Morningstar reports. These are professional research reports focused on the stock market and provide analysis and ratings of companies’ business strategies, risk, market value, economic moat and leadership, so these reports can be very useful to stock traders.
Stocks trading offer
Robinhood is by far best known for its stock trading service. It provides access to several thousand stocks and ETFs.
You can either buy stocks and own the underlying assets or trade stock options. Stock index options are also available. However, options are only available for the big US stocks.
Robinhood offers fractional stock investing, meaning you can trade top stocks from just $1.
Stocks trading costs
Robinhood’s main selling point is that it offers zero commission or stock trading – you don’t pay any fee per trade like you do on many other brokers. There’s also no spreads to worry about as you aren’t trading stock CFDs.
You can also trade stock and index options with zero commission.
There is a small custody fee for trading non-US stocks via ADRs – usually 1 to 3 cents per share – that Robinhood passes onto customers.
There is an annual margin fee if you trade stocks with margin. Robinhood’s margin fee is 5%, which is lower than the same fee charged by brokers like Webull and TD Ameritrade.
Stock exchanges or trading places
The stocks offered by Robinhood are mostly from US stock exchanges. You can trade some non-US stocks, but only through ADRs (American Depository Receipts) rather than directly through stock exchanges.
If you want to trade small US stocks or overseas stocks, we recommend contacting Robinhood’s customer service before doing so.
Robinhood is very popular among the younger generation of online stock investors, and it’s easy to see why. It has a wide range of US stocks that you can trade as fractions and with zero commission, so it’s one of the cheapest and most beginner-friendly stockbrokers on the market.
Crypto trading offer
Although Robinhood is best known for its stocks, it’s now also a popular crypto trading platform after introducing cryptocurrencies over the last few years.
The broker currently offers seven cryptocurrencies – Bitcoin, Ethereum, Ethereum Classic, Litecoin, Dogecoin, Bitcoin Cash and Bitcoin SV.
When you trade or invest in cryptocurrencies on Robinhood, you are buying the actual assets, rather than trading CFDs.
Crypto trading costs
What makes Robinhood really stand out is that it offers free cryptocurrency trading – there are no commissions or spreads to worry about whatsoever. This is pretty exceptional, as there are very few other platforms that offer free crypto trading and investing.
Crypto trading conditions
You can trade cryptocurrencies 24/7 on Robinhood.
It’s important to note that Robinhood offers cryptocurrency trading through Robinhood Crypto, which is a separate entity to the main brokerage and is not covered by FINRA or SIPC. This means that your crypto investments and any funds you have in your crypto account are not protected in the way that funds held in regular Robinhood accounts are.
While Robinhood doesn’t have a huge selection of coins, it’s still a very attractive option for cryptocurrency traders and investors, particularly if you’re only interested in big coins like Bitcoin and Ethereum. This is mostly due to its zero free crypto trading model, which is very rare in the industry.
Review of Robinhood FAQ
Is Robinhood good?
We’re always getting asked whether a broker is good – for example, many users ask us is XTB good? Robinhood certainly has some good features, but whether it’s good for you depends on your preferences. To help you decide, read our latest Robinbood review where we examine every aspect of this broker in detail.
Is Robinhood cheaper than other brokers?
With so many online brokers in operation these days, it can be hard for traders to find the cheapest option. If you’re wondering whether Robinhood is cheap, check out our Robinhood trading review where we explore this broker’s fees and compare them to other brokers including in our review of Vantage FX, or even our review of Plus500
Is Robinhood safe?
A question many traders have is “is Robinhood legit?”, and you should always make sure a broker is safe in signing up. In our Robinhood review UK, we examine its licensing and security features to reveal whether it’s safe or not.
Can you trade with leverage on Robinhood?
Many brokers these days offer leverage so traders can trade with larger amounts. In our Robinhood review, we reveal whether this broker offers leverage but we also look at others, like in our XTB review, so make sure you check it out.
Robinhood is one of the most popular modern brokers with over 13 million users, and it’s easy to see why it’s become the go-to option for so many traders and investors.
For starters, it’s hard to find a cheaper broker than Robinhood, due to its zero-commission stock, fund, options and cryptocurrencies trading. It’s also a very secure broker with a brilliantly user-friendly platform and a variety of accounts to suit different users.
That’s not to say Robinhood is perfect – it only supports bank transfers, which is a downside, and the customer service is far from the best.
We think the three most important things to know before using Robinhood are that it’s one of the most affordable brokers out there, that it’s best aimed at beginners, and that the payment methods and customer support options are limited. However, overall we still think it’s a good broker for low-cost stock and crypto trading.
Receive the latest trading news by email + our free eBook
Nobody is born a trading expert. Register now to receive the Ultimate Guide
to Trading Cryptocurrencies in 2022 (and beyond), and receive the TradersBest.com newsletter with the latest market news and broker reviews!.
By registering, I agree that TradersBest.com may send me newsletters via email at regular intervals. This consent can be revoked at any time.
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.