Robinhood Review: Lower Costs and Simplified Investing in One

Learn More: How to Open a Robinhood Account

Top perks

Zero commission fees

Robinhood is best known for pioneering the idea of zero-commission stock trading. While most other top brokers have followed suit, Robinhood still has a favorable fee structure. For example, in addition to not charging flat commissions on options trades, Robinhood doesn’t impose a per-contract charge either. That’s something that many of the best options platforms still do.

Fractional shares

Traditionally, if a stock was trading for $500 per share, you needed to have at least $500 to invest in it. Robinhood lets investors buy fractional shares of thousands of stocks, even if they have only $1 to invest. This can be an incredibly valuable tool – it not only lets you put 100% of your money to work, but also helps create a diversified portfolio without a ton of investment capital.

Cryptocurrency investing through Robinhood Crypto

If you’re interested in cryptocurrencies, Robinhood could be a great choice for you, as Robinhood offers cryptocurrency trading through its Robinhood Crypto service. Customers can buy and sell Bitcoin, Ethereum, Litecoin, and other cryptocurrencies any hour of the day. As of August 2023, there are 15 different cryptocurrencies available on Robinhood. Not only is Robinhood one of the few brokers that allows users to invest in stocks and cryptocurrencies on the same platform, but Robinhood is one of the few to offer no-commission crypto trading.

Once you verify your identity and activate two-factor authentication on your Robinhood account, you can withdraw and deposit cryptocurrency assets, with a limit of $5,000 or 10 total transfers within a 24-hour period.

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Cryptocurrency limit orders

Some cryptocurrency platforms only allow you to make immediate trades, but with Robinhood Crypto, you can use a limit order to set the price at which you want to buy or sell.

Cash management

Robinhood also offers an appealing cash management account that allows clients to earn returns that fluctuate with prevailing interest rates on their uninvested cash. Robinhood Gold members get even more, as we’ll discuss in the next section. What’s more, the cash management account has no fees associated with it, including $0 ATM fees at more than 75,000 ATMs in its network.

Robinhood Gold

While Robinhood is known for being the “no fee” brokerage, that the company does have a premium product known as Robinhood Gold. This version of the platform costs $5 per month, but could be well worth it to active investors. Gold members get the following benefits:

  • High APY on uninvested cash. Competitive with some of the best high yield savings accounts.
  • Instant access to larger deposits. While standard accounts can deposit and immediately access up to $1,000, Gold accounts can deposit $50,000 instantly.
  • Margin investing at 8% versus 12% through a standard account.
  • Level II market data from Nasdaq.
  • Access to Morningstar stock research reports.
  • 3% match on IRA contributions and 401(k) rollovers, versus 1% for standard accounts.

IRA investing

Robinhood now offers IRA investing for its account holders, and it doesn’t stop there. Robinhood matches 1% of every dollar on all IRA contributions for all members, and 3% for Robinhood Gold users. The match will be available around the same time as your deposit, according to Robinhood, and the match doesn’t count toward your annual contribution limits.

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