Robinhood Review for 2024


You’re likely familiar with the story of Robinhood, the outlaw who stole money from the rich and gave it to the poor. Well, you’ll find a similar principle behind the investing app, Robinhood.


The founders of Robinhood aren’t stealing anything, but they do believe that the current financial system doesn’t benefit every American. For that reason, they make it easy for non-traditional investors to get started.

When you sign up for Robinhood, you get access to commission-free trades, a cash management account, and a lot more. Keep reading to learn more about the pros and cons of signing up for Robinhood, as well as whom the app is best for.

Introduction to Robinhood

Robinhood is a popular investing app that allows users to trade stocks, options, exchange-traded funds (ETFs), and even cryptocurrencies without paying any commission fees. It was founded in 2013 and has since grown to over 22 million users, disrupting the financial industry.

The app is designed to cater to non-traditional investors and make the financial system more accessible to everyone. In this Robinhood review, we’ll explore its features, pros and cons, and determine who it’s best suited for.

How does Robinhood work?

When you sign up for a Robinhood account, you’ll get your first stock for free, even if you don’t deposit any funds. Signing up for an account is easy. All you have to do is enter your name, email address, and create a password.

From there, you’ll be prompted to enter more personal information, like your address and Social Security Number. Robinhood is required by federal law to request this information.

After you’ve set up your brokerage account, you’ll outline your investing experience thus far. And to go forward, you will need to fund your account at this point. However, there’s no minimum deposit required to fund the account, so you can always start small and invest more later.

You can connect your bank account to the Robinhood app to make funding your account easier. And there are no fees for transferring money in and out of your account.

Get started with Robinhood on Robinhood’s secure website

Robinhood’s User Interface and Ease of Use

User-friendly interface: One of the key selling points of Robinhood is its simple, user-friendly interface. Both the web and mobile versions of the app have been designed to make it easy for users to navigate and trade. The intuitive design allows users to quickly understand their account, monitor their investments, and execute trades with minimal hassle.

Account setup and verification: Setting up an account with Robinhood is a straightforward process. Users can sign up with just their name, email address, and a password. Further personal information, such as address and Social Security number, is required due to federal law. Once the account is set up, users can outline their investing experience and link their bank account for easy funding.

Diving Deeper into Robinhood’s Features

Robinhood offers several features that make it stand out from other investing apps:

Zero commissions: As mentioned earlier, Robinhood has been a pioneer in offering commission-free trading on stocks, options, ETFs, and cryptocurrencies. This feature has helped democratize investing and lower the barriers to entry for non-traditional investors.

Cryptocurrency trading: Robinhood is among the few investing apps that support cryptocurrency trading. Users can trade popular cryptocurrencies like Bitcoin, Ethereum, Litecoin, and Dogecoin. This added functionality allows users to diversify their investments within a single platform.

Mobile app: Robinhood’s mobile app is highly regarded for its ease of use and clean design. Users can quickly view their portfolio, monitor market news, and execute trades on the go.

Account notifications: Users can customize their notification settings to receive alerts about their account performance, significant price movements, and other relevant information.

Daily market updates: Robinhood’s news feed provides users with daily updates on market trends, economic news, and other developments that can impact their investments. This helps users stay informed and make better investment decisions.

Exploring Additional Robinhood Features and Aspects

In addition to the features already discussed, Robinhood offers various other aspects that make it an attractive choice for investors. Let’s dive into some of these additional features and see how they can benefit users.

Extended-hours trading

Robinhood allows users to participate in extended-hours trading, which includes pre-market and after-hours trading sessions. This feature gives investors the opportunity to act on news and events that happen outside of standard market hours, potentially capitalizing on price movements before the broader market reacts.

Options trading

Robinhood offers options trading, which involves buying and selling contracts that give investors the right, but not the obligation, to buy or sell a stock at a specific price within a specified period. This feature enables users to implement more sophisticated trading strategies and potentially profit from market volatility, while also providing the flexibility to manage risk according to their preferences.

Dividend Reinvestment Program (DRIP)

Robinhood supports a Dividend Reinvestment Program, allowing users to automatically reinvest their dividends back into the underlying stocks or ETFs. This feature can help investors grow their portfolios more efficiently over time by harnessing the power of compounding returns, allowing them to maximize their potential earnings.

Fractional share dividend reinvestment

In addition to allowing fractional share purchases, Robinhood also enables users to reinvest dividends as fractional shares. This functionality ensures that users can continue to grow their investments, even if they don’t have enough dividends to purchase a full share, making it a valuable tool for long-term wealth accumulation.

Instant deposits

Robinhood offers instant deposits for its users, allowing them to access their transferred funds more quickly (up to $1,000). This feature ensures that users can take advantage of investment opportunities without waiting for their funds to settle, providing a more seamless investing experience.

Security and account protection

Robinhood prioritizes the security of its users’ accounts and personal information. The platform uses industry-standard encryption and security measures to protect user data. Additionally, Robinhood accounts are insured by the Securities Investor Protection Corporation (SIPC) for up to $500,000, including a $250,000 limit for cash.

Educational resources

Robinhood offers various educational resources, including articles and guides, to help users expand their investment knowledge and make more informed decisions. These resources can be especially beneficial for new investors looking to learn more about investing, equipping them with the knowledge needed to enter the markets confidently.

Social aspect and community

Robinhood’s platform has a social component, allowing users to follow friends, family members, or other investors and view their portfolios. This feature can create a sense of community and motivate users to learn from one another’s investment strategies, fostering collaboration and the sharing of ideas.

Benefits of Robinhood

There are several advantages to using Robinhood as your investing app of choice:

  • No account minimum: Robinhood requires no minimum deposit to start trading, making it accessible to users with limited funds.
  • Free trading: Commission-free trades on stocks, options, ETFs, and cryptocurrencies helps users save on trading costs.
  • Cash management account: Robinhood offers a cash management account with a 1.50% APY on uninvested cash, no hidden fees, and a debit card issued by Sutton Bank.
  • Fractional shares: Users can invest in fractional shares of thousands of stocks, allowing them to build a diversified portfolio with minimal investment.

Drawbacks of Robinhood

Despite its numerous benefits, there are a few drawbacks to using Robinhood:

  • Limited account types: Robinhood only supports individual taxable accounts, so users looking to open other types of brokerage accounts will need to explore other platforms.
  • Limited trading tools: Robinhood’s research and trading tools are relatively basic compared to those offered by other online brokers.
  • Minimal customer support: Customer support is primarily available through a chatbot and FAQ page, which may not be sufficient for users with more complex queries.
Get started with Robinhood on Robinhood’s secure website

Robinhood Gold: Premium Features for Advanced Investors

Robinhood Gold is a subscription-based premium service that offers a suite of advanced features designed for more experienced investors. By upgrading to Robinhood Gold, users can access the following benefits:

Bigger Instant Deposits

While standard Robinhood users can access instant deposits of up to $1,000, Robinhood Gold subscribers receive instant deposits depending on their account balance. This feature allows users to invest larger amounts immediately, without waiting for their funds to settle.

Level II Market Data

Gain access to Level II market data provided by Nasdaq TotalView, which shows real-time bids and asks for stocks. This advanced market data can help users make more informed trading decisions by providing greater transparency into market activity.

Margin Trading

Robinhood Gold allows users to trade on margin, providing them with access to additional buying power by borrowing funds from Robinhood. With margin trading, users can potentially amplify their gains, but should be aware that it also increases the risk of losses. It’s essential to carefully consider the potential risks and rewards before engaging in margin trading.

Research Reports

Subscribers receive access to research reports from Morningstar, a leading provider of independent investment research. These reports can help users make more informed decisions by offering in-depth analyses of individual stocks and industries.

Access to Investing in IPOs

Robinhood Gold users have the opportunity to invest in initial public offerings (IPOs) before the stocks are listed on public exchanges. This feature allows users to potentially profit from the early stages of a company’s growth, as well as gain exposure to new and innovative industries.

The cost of Robinhood Gold is $5 per month, which includes access to all the premium features mentioned above. It’s important to note that margin trading also comes with additional fees based on the amount borrowed, so users should carefully consider the costs before utilizing this feature.

Robinhood: Ideal for New and Casual Investors

Robinhood is best suited for new investors who want an easy-to-use platform to start trading with minimal barriers to entry. It’s also an excellent choice for casual investors who prefer a more hands-off approach, as the app’s features and design make it easy to monitor investments and stay informed on market trends.

For those interested in margin trading, Robinhood Gold is an option worth considering. This premium service costs $5 per month and provides access to additional margin, ranging from $5,000 to $50,000, depending on the user’s deposit amount.

However, Robinhood may not be the best fit for individuals focused on long-term retirement savings, as it doesn’t offer retirement accounts or investment options like bonds and mutual funds. Additionally, more experienced investors seeking advanced research tools and a wider range of account types may find Robinhood’s offerings somewhat limited.

Other Considerations and Alternatives to Robinhood

While Robinhood is a popular choice for many investors, it’s essential to consider other factors and alternatives before deciding on an investing platform.

Tax implications: Investing through Robinhood’s individual taxable account means that any capital gains or dividends received will be subject to taxation. Users should be aware of the tax implications of their investments and consider seeking professional tax advice.

Risk management: Investing always carries a degree of risk, and Robinhood is no exception. It’s crucial for users to assess their risk tolerance, diversify their investments, and develop a long-term investment strategy to minimize potential losses.

Alternatives to Robinhood: There are several other investing apps and platforms available that cater to different types of investors. Some popular alternatives include:

  • Fidelity: A full-service brokerage offering a wide range of account types, investment options, and advanced research tools. Fidelity is ideal for more experienced investors or those looking for a more comprehensive investment platform.
  • M1 Finance: A robo-advisor and brokerage platform that allows users to create custom portfolios or choose from expert-curated portfolios. M1 Finance is suitable for investors who prefer a more automated approach to investing.
  • Acorns: A micro-investing app that rounds up users’ everyday purchases and invests the spare change into a diversified portfolio. Acorns is perfect for beginners who want to dip their toes into investing with minimal commitment.

Bottom Line

Final Thoughts on Robinhood

Robinhood is a solid option for new investors looking to explore the world of trading without paying commission fees. The user-friendly interface, zero-commission trades, and various features make it an attractive choice for casual investors or those just starting. However, more experienced investors or those with specific account needs may need to consider other brokerage platforms.

By weighing the pros and cons, potential users can decide if Robinhood is the right fit for their investment goals and preferences. With no commitment required and a free stock upon sign-up, there’s little risk in giving Robinhood a try and determining if it meets your investing needs.

Get started with Robinhood on Robinhood’s secure website
Jamie Johnson
Meet the author

Jamie Johnson is a freelance writer who has been featured in publications like InvestorPlace and GOBankingRates. She writes about various personal finance topics including student loans, credit cards, investing, building credit, and more.