Robinhood® Review 2018

About our Review Process

Bankrate recently reviewed 11 of the most popular online brokerage sites, signing up for trial accounts and putting each site through its paces. If you end up signing up for an account, Bankrate may receive compensation.

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Bottom line in a sentence

Zero-commission broker Robinhood is a good gateway to the stock market if you've never invested before, but the vast majority of investors will quickly hit a wall even if the price is right.

Robinhood at a glance

Star Rating

3.5
  • Affordablity: 5 of 5
  • Usability: 4 of 5
  • Tools & Research: 2 of 5
  • Mobile: 5 of 5
  • Scalability: 2 of 5
  • Minimum Balance:
    $0
  • Cost per stock trade:
    $0 for trades from your mobile device
  • Cost per options trade:
    $0, either via commissions or per-contract fees
  • Commission-free mutual funds or ETFs:
    All ETFs are free, given the $0 per-trade commissions. But mutual funds are not offered at all on the platform
  • Customer service:
    There is no phone support, only help glossaries and the prospect of email
  • Inactivity fee:
    There is no inactivity fee.
  • Mobile app:
    Robinhood offers a mobile app for both Apple and Android devices.
  • Annual fees:
    There are no annual fees.
  • How long to withdraw:
    Before being able to initiate a withdrawal of uninvested funds, your deposits must remain in your account for a minimum of five trading days. On the sixth day, those uninvested funds will go into your cash available for withdrawal.
  • SIPC insured:
    Yes, the SIPC covers Robinhood accounts up to $500,000 in securities and cash or $250,000 in cash only.
  • Best for:
    Casual first-time investors

What Robinhood is

Robinhood offers a slick mobile interface and high-tech efficiencies to cut costs and pass the savings on to users. Costs for stocks, options and ETFs are all free to users.

For small accounts and cost-conscious newbies, this is a huge plus that really takes some of the pressure off investing. However, Robinhood's $0 commissions and easy-to-use mobile app are the key selling points and basically the entirety of what you'll ever get out of this broker.

The spare and uncluttered experience winds up feeling shallow and incomplete to any investor who wants to do serious research, sophisticated planning or most tasks other than simply booking a trade.

What Robinhood costs

With Robinhood, there is no account minimum, no fees for stocks or ETFs, no fees for options – and even a newly launched cryptocurrency marketplace for assets like bitcoin that allows no-cost trading.

But there are some fees to know about. Robinhood aims to make money in some ways – including charges associated with "leveraged" accounts.

A leveraged account effectively invests with borrowed money, and the Robinhood Gold platform allows customers to access buying power that is double their typical investment potential – for a price. The pricing is billed monthly at a flat rate, but typically is in the ballpark of a 5 to 6 percent annual rate. For instance, one of the lowest tiers of Robinhood Gold is $10 a month on an additional $2,000 in buying power, which annualizes to $120, or 6 percent.

That's not bad when compared with other brokers who charge similar or even higher amounts even for much larger accounts.

Robinhood also earns interest on the balance of the cash people have deposited, and aggregates user and trade data that it can then sell to third parties.

What Robinhood offers

Robinhood is a pared down trading app for your smartphone – and not much more.

This is no small thing, since mobile trading is increasingly in demand and low-cost execution is a major plus. But if you're serious about investing and require a modicum of depth beyond simply what a stock is trading at and a line graph of recent price movement, you're not going to find it on Robinhood.

Quick comparison of Brokerage options:
Brokerage Overall Rating Avg. Cost Per Trade Usability Rating
robinhood logo Read Our Review
$0 4 of 5
e-trade logo Read Our Review
$6.96 4 of 5
charles-schwab logo Read Our Review
$4.95 5 of 5
fidelity logo Read Our Review
$4.95 4 of 5

Here's a look at some of the features beyond simply the cost structure:

  • Breezy setup: It's easy to set up and fund an account. Features such as autocomplete function on your street address and a fluid integration with the online engines of most major banks are major time savers.
    "Funding your account is a breeze with most major banks represented on Robinhood. Just log in as if you were checking your account balance and, voila – you're connected without looking up a string of numbers from your checkbook."
  • Uncluttered interface: While there are plenty of tools and features that Robinhood might lack compared with other online brokers, it features a clean and intuitive interface. You have a prominent "watch list" of holdings you own or want to own, and can swipe left or right to see charts or trade them accordingly via a prominent button at the bottom of your screen. There's also a decent feed of news and commentary that allows you to stay on top of the headlines.
  • Cryptocurrencies: One thing that allows Robinhood to stand out from the pack is the ability to trade cryptocurrencies like bitcoin and ethereum in fractional forms. There is no commission on transactions, and the minimum amount required for orders is $0.10 for bitcoin and $0.01 for ethereum. The program is limited by regulations and availability, so right now you can trade these cryptocurrencies on Robinhood in only 13 states.

What Robinhood lacks

Robinhood lacks the educational resources, screening tools and expert analysis that many other brokerages offer.

In addition, while bitcoin is present on the platform, you can't trade many basic things that other brokers offer and many serious investors desire. These include basic items like mutual funds and bonds as well forex and futures. While Robinhood finally added options capabilities this year and may roll out other assets in the future, the deficiencies are numerous at present.

Beyond assets, the basic structure necessary for a holistic approach to investing is also lacking on Robinhood. Accounts are only taxable trading venues, and retirement accounts like IRAs aren't an option. Traditional online banking services including savings accounts or credit cards, which often come with big perks if you tie them in with other brokers, aren't offered. You can also forget about strategies like automatic dividend reinvestment, which isn't supported but is a tried-and-true method of many investors.

What little Robinhood offers is also inflexible. You can add stocks to a watch list, for instance, but can't customize them in a way to surface even basic info you care about most. Nor can you customize chart ranges beyond default time frames.

"Robinhood isn't just shallow when it comes to analysis, but inflexible. For instance, charts give you six options for time frames… and you either take it or leave it. If you want a different window, you'll have to look elsewhere."

These shortcomings are much more substantive than any lack of screeners or fancy tools. If you have even a moderate interest in investing, chances are Robinhood is going to fall short on keeping you informed or giving you the right structure to make the investments you want.

And there's not a phone number to call if you're confused or need help. There's a labyrinthine help section and the chance to send an email into the abyss, but Robinhood does not have a call center to support its customers.

Robinhood is best for...

Truly new investors who simply want to peek under the hood of the stock market can find a low-cost way to do so via Robinhood.

But if you're trying to get serious about investing, Robinhood is not the right brokerage for you, even if it is much more affordable.

Some companies succeed by offering premium products at premium prices. Others, like Robinhood, undercut the competition on cost but also cut their services to the bone.

With a lack of robust tools and customer service, you get what you pay for with Robinhood.