Robinhood Review 2023
|By: Jeremy Biberdorf||March 6, 2022|
In a nutshell: Robinhood is a stock trading app that positioned itself as an industry disruptor. Robinhood’s approach to easy, free, and mobile stock trading has brought more and more retail investors into stock trading.
Read our Robinhood review to see why this is an excellent option for a simple, affordable trading solution.
|Free (Robinhood Gold $5/month)||$1||Free stock for new customers|
- Simple to use
- Low-cost trading
- Innovative mobile app
- Limited investment offerings
- Limited research options
Compare to Other Investment Platforms
FeesFree (Robinhood Gold $5/month)
Fees$1, $3, or $5/month
Robinhood Review Introduction
Robinhood has come a long way since 2013. In 2021, Robinhood had 22.5 million active users. The app has gone from strength to strength with its mobile-first approach to stock trading. It’s effortless to use, with an app that even novice stock traders can understand in minutes.
The platform uses a low-fee structure and offers cryptocurrency and fractional shares alongside ordinary stocks. Its cash management and recurring investment features are also notable for helping newbies into the world of stock trading.
To learn more about the platform, keep reading our Robinhood review and decide whether it’s right for you.
What is Robinhood?
Robinhood’s story began back in 2013 and was created by the team of Vladimir Tenev and Baiju Bhatt. The latter already boasted a history of constructing high-frequency trading platforms for some of the largest institutions in New York City.
The name comes from the company’s vision to provide everyone with access to the financial markets, not just the rich and powerful. The democratization of the financial markets and continuing accessibility have been a cornerstone of the last few years, and Robinhood is one of the most prominent examples of that.
Although some veteran traders claim that Robinhood is too simplistic and fails to provide investors with the tools and education necessary, the platform was never designed to be anything but an easy way to trade.
New customers who sign up with Robinhood can start trading with as little as $1, with trading fees and commissions measured in cents.
At Modest Money, we believe that Robinhood has played a significant role in spurring brokers to reduce their costs and make it easier to get into the markets. Our review on Robinhood thinks that by removing many of the barriers to entry, a whole new generation of people can start building their financial futures.
The core of what makes Robinhood so popular is how easy it is to use. The streamlined interface lends itself well to basic investing. While executing complex trading strategies effectively is still challenging, Robinhood was never designed for this.
The trimmed-down interface is exceptionally convenient and is an excellent introduction to stock trading.
Free Crypto Trading
Another groundbreaking feature is the ability to trade cryptocurrencies for free. It remains one of the few brokerages that allow crypto trading without excessive fees. Among stock brokerages, this is a standout feature.
Investing in IPOs has traditionally been the exclusive arena of major financial institutions. Robinhood allows for limited IPO access to users on its platform as of 2021. Most brokerages offer no IPO access, so this is a significant boon for investors looking to move in early.
While you still won’t find the advanced features common to many brokerages, Robinhood has increased the number of research options on the site.
Earnings calendars, analyst ratings, and a real-time list of the biggest stock movers are all new additions to Robinhood.
Robinhood creates its data ecosystem by harvesting the data from other users, such as the top 100 most popular stocks on the platform. They also have a news feed with several reputable sources, such as Reuters, the Wall Street Journal, and Barron’s.
Cash Management Account
Robinhood offers its customers a cash management account paying at a current interest rate of 0.30%. The account also includes a debit card and the option to withdraw money for free from more than 75,000 ATMs spread nationwide.
Due to Robinhood’s contracts with numerous high-street banks, $1.25 million in FDIC insurance comes included.
Robinhood is an entirely free stock trading platform. You can start buying stock with as little as $1 on your phone. The only ongoing subscription is Robinhood Gold.
The Gold service allows investors to trade on margin to amplify their profits. It costs just $5 a month to get started.
All equity trades come with no commissions, and Robinhood offers fee-free trading options. Margin usage comes with a 2.5% interest charge.
Stunningly, there are also no wire fees on domestic or international transfers. Robinhood makes most of its money from margin charges, check fees, and live broker fees.
Account transfer fees come with a $75 charge.
If you have any questions regarding how Robinhood operates, here are the answers to some of the most common queries.
How Much is My Free Stock Worth?
Every new customer gets a free stock at random. You have a 98% chance of receiving a stock worth between $2.50 and $10 per share. However, some lucky customers may receive a stock worth up to $200 at the time of purchase.
Is Robinhood Legit?
Despite controversies throughout its life, Robinhood is a legitimate stock trading platform. It’s registered with the SEC and must abide by the same rules and regulations as traditional brokerages.
How Much Margin Can I Get?
It depends on the size of your account. All Robinhood Gold subscribers receive $1,000 in free margin. Any margin above this rate invites a 2.5% interest charge, making it relatively low compared with the rest of the industry.
Is Robinhood Right for You?
Our review on Robinhood shows this is an excellent introductory option if you’ve never traded stocks before. It has some groundbreaking features and, in many ways, remains an industry disruptor. The simplicity of the platform, low fee approach, and free crypto trading make it a standout.
Where it falls is the lack of advanced features and a limited array of investment options. Despite this, if you’re looking for a place to start building your financial future, this is the platform to begin with.
Create an account with Robinhood and get your free stock worth up to $200 now.