Log out
Robinhood is an investment app that’s seen a lot of success over the years, mostly due to the fact that they don’t charge fees. Which was a game changer in the industry, and even caused their competition to ultimately lower fees as well.
Even with many low-fee brokerages to choose from, Robinhood remains one of the best options for investors who want to pay no fees at all.
The online brokerage was started in 2013 by two former Stanford roommates Vlad Tenev and Baiju Bhatt as a way to break down barriers to entry and make the stock market more accessible to everyone.
With more than 11.4 million active users and $62 billion in assets, they certainly have succeeded.
Benefits Of Using Robinhood
- Low Costs
Robinhood is one of the lowest-priced brokerages out there, which makes it a great place to start if you don’t have much spare money to invest.
Their prices reflect their mission to make trading accessible to everyone. There are no monthly fees, no account minimum, and no trading fees making it easier than ever to get started.
- Made for Beginners
The app is known for being very easy to use. So there’s essentially no learning curve. Even those who are new to investing shouldn’t have a problem getting into the swing of things.
All you have to do is join the app and start trading. You can buy stocks, ETFs, cryptocurrencies, or anything you like.
This is the best and the easiest platform that I have ever used. It has made me invest in stocks which I wouldn’t have done ever on my own using other platforms. Nikki A, Trustpilot Review
Robinhood is an amazing tool! I’ve been trading on this app for 2 years. They enable inexperienced traders like myself to begin trading and learning without charging me a fortune in trading fees. The interface is very easy to use and is helpful in keeping track of all your investments. I highly recommend this product. Philip, Trustpilot Review
I have been using Robinhood for a few years now and it has been a great experience. Sure investing is risky and you should never invest what you cannot afford to lose. Always do your research! they allow many different types of investing and they have been adding new services to their platform. i personally have never had any major issues except making too many trades in one day. This platform is prefect for beginners who are looking to start investing in Stocks and even crypto! It is definitely a building block to investing.
It is a good tool to use to learn how different trading options work limit buys and sells, calls, puts, fractional shares, stop loss limits and more. RidiculousRibs
Trustpilot Review
- No Trading Fees
As discussed above, Robinhood is a disruptor in the brokerage industry with its no-fee trading. This approach opens up a world of investment options to traders who otherwise would be unable to participate.
- No Minimum Required
You don’t have to be in possession of a minimum amount of money to sign up. You can sign up with $0 in your account, and start to invest with just $1!
This makes it perfect for those that are looking to make some easy money without any to start with.
A lot of traditional brokerages require a $1,000 minimum investment. Not so Robinhood.
I have made several thousands trading through robinhood. Legit platform and app Jason Briggs, Trustpilot Review
- The Only IRA with a Match
As of December 2022, Robinhood offers Individual retirement accounts (IRAs) with a 1% match on contributions. While a typical feature of employer based 401(k)s this is unheard of when it comes to IRAs.
- Join the Crypto Game
Unlike other online brokers, Robinhood lets you trade in numerous cryptocurrencies for free, including Bitcoin and Ethereum. Though be aware its crypto offerings are not as good as those found at exclusive crypto brokerages.
This is really a great app, u can now purchase crypto without paying a fee, that is huge ! Baycan
- Trade Anytime You Want
On Robinhood you can trade after normal market hours – 9:30am-4pm ET. A lot of similar apps and sites require you to stop trading when the stock market closes at 4pm ET.
Robinhood’s extended hours lets you trade from 7am-8pm ET! Plenty more time to trade the stocks you love.
There are a few restrictions to what you can trade during extended hours, but overall it gives users more flexibility to make the trades they want.
- Buy Fractional Shares
Have you ever dreamed of buying a high-priced stock like Apple? Now you can with Robinhood’s fractional shares feature. They allow you to purchase part of a stock rather than having to save up to buy the whole thing.
You can pay as little as $1 for a portion of a share rather than the thousands a whole share costs.
This ingenious model allows you to invest, regardless of your current income, and get your hands on some top company stocks.
It also means that you can easily build a diversified portfolio without spending thousands of dollars.
- High-Yield Savings Account
Customers can open up a high-yield savings account with Robhinhood and earn interest on their uninvested cash. Earn a 1.5% APY or a 4.65% APY if you’re a Gold Member. All funds are insured by the Federal Deposit Insurance Corporation (FDIC).
- Cash Card
Robinhood has a debit card where you get 1.5% cashback at participating brandsand the opportunity to invest that cash directly into your stocks.
You can also earn a bonus of 10% to 100% on your weekly roundups, have access to 90,000 fee-free ATMs, the ability to send checks, no overdraft protection, and no monthly fees.
- IPOs at Your Fingertips
Robinhood lets you buy the latest stocks on the market with their Initial Public Offerings (IPOs). IPOs are typically reserved for financial institutions instead of individual traders.
Downsides of Robinhood
- Limited Investment Options
While Robinhood does offer an array of stocks, ETFs, options, and cryptocurrencies it does not offer all the assets more advanced traders are looking for like fixed income, mutual funds, foreign exchange, or futures trading.
Robhinhood simplifies trading for beginners which means that it in turn lacks more in-depth features and research tools that advanced traders look for.
New
One thing I dislike is more limited stock selection than with some other companies. Many pink sheet stocks are unavailable. Also unavailable are some officially listed stocks on NYSE or Nasdaq which have foreign connections. Because of this I have to have accounts with other companies who offer stocks they do not. The delays getting hold of customer service people are the worst I’ve seen. Kelly Clover, Trustpilot Review
- No Mutual Funds or Bonds
Robinhood does not let you buy mutual funds or bonds, which can make it difficult to build a truly diverse portfolio. Most experts highly recommend having a mix of stocks and bonds, not only the stocks that Robinhood lets you trade.
- Additional Charges
Trading is free, which is great. But in order to access the research tools or data you have to pay $5 a month for a Gold membership. These research tools are typically free at most brokerages.
- Poor Customer Support
Robinhood has a history of poor customer support. While they have recently made noticeable improvements, they are not up to par with other brokerages. They still do not offer direct phone support or live chat unless it’s specifically requested.
- Unreliable
Users have complained of outages and trade restrictions that have made trading impossible for short periods of time on the platform. In addition, Robinhood has a history of not being transparent with traders and has been accused of misleading customers and charged significant fines.
- Lack of Research
Robinhood is geared toward beginner investors but does not give a lot of educational resources or investment research for free.
It also lacks the research capabilities that more advanced traders look for in a broker.
Good app for nonprofessionals, but not enough specific trading features to make trading with confidence. For example they need to improve candle stick charts! Lens Nick, Trustpilot Review
Robinhood is making strides to improve the educational materials available and has added analyst ratings, lists of top movers, earnings calculators, and more.
Robinhood Snacks is one of its educational initiatives. It provides a newsletter and podcast with updates on the financial market that are made for beginners.
Even so, Robinhood pales in comparison to other brokers who offer traders a wealth of materials.
Ways To Make Money On Robinhood
But now for the part of this article that I’m sure you were waiting for, the part where we talk about all the ways you can make money on Robinhood. And trust me, there’s plenty of ways to do so…
For example, in 2022, the average user on Robinhood made $66. And while that number might sound small at first, it isn’t if you take the market and other variables (like personal mistakes on the investors’ parts) into consideration.
Because it means, at the end of the day, Robinhood made its users more money than they lost. Even in a year when the market was unstable.
Make Money On Robinhood
- Buying low and selling high (a classic investment strategy)
- Dividends (which is a more stable strategy)
- Interest on savings (arguably the safest option of all)
- And even advanced investment strategies, like options trading
Raise Your Chances Of Succeeding On Robinhood
Research
First of all, as with investing on any site, you raise your chances of success by researching before you ever start buying shares. Otherwise, you risk losing your entire investment. Whether it be small… or large.
This does take a bit of work to do, but the decreased risk is definitely worth it. And you can always listen to reliable sources around you (or even online) in order to gain information faster, as long as you ultimately research and make your own decision.
As an example, you’ll probably want to take a look at market trends in addition to the company’s recent profits, etc. Take all variables into account!
Don’t get carried away with day trading
Because of the fact that Robinhood doesn’t charge you any fees when you buy, sell, or trade on their app… Many people get carried away with this feature and start to day trade a bit too much.
And although day trading can definitely be profitable, it’s best suited for more advanced investors. So if you’re just getting started then you’d probably be most likely to make money by sitting on your stocks for a while, and even starting to collect dividends.
Get Your Free Stock
And let’s not forget about the free stock you’ll receive when you sign up!
When you open an account, Robhinhood will give you a specified dollar with which to purchase a fractional share stock from one of 20 leading U.S. companies. The gift amount ranges from $5 to $200 with98% of participants receiving $5-$10.
It’s a great way to start investing if you’re short on funds.
Why not sign up today, pick out your very first stock, courtesy of Robinhood, and get started trading?
