Robinhood Review: Is it Safe?

Robinhood lets you trade stocks commission-free and has no account minimums. Is it safe? Are there hidden fees? Read on for the pros and cons.

	Get a Free Stock (worth between $5 and $200) Get a Free Stock
	Overall Score	4.1
	Stock Trading	5.0
	Options Trading	4.0
	Minimum Deposit	5.0
	Customer Service	4.0
	Mobile App	4.0
	Commissions and Fees	5.0
	Ease of Use	5.0
	Research	1.0

5-point scale (the higher, the better)

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Pros and Cons

• Commission-free trades
• No minimum
• Extended trading hours
• 1% match on IRA contributions

• Limited research
• No mutual funds & bonds

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Bottom Line

Free way to trade stocks with limited bells and whistles

• What is Robinhood?
  
• Pros & Cons
  
• Who Robinhood is Good For
  
• Pricing & Fees
  
• Investment & Account Options
  
• Is Robinhood Safe?
  
• Types of Accounts
  
• App Features & Tools (Free)
  
• Robinhood Gold (Paid)
  
• Robinhood Cash Card
  
• Customer Service
  
• How It Compares

What Is Robinhood?

Robinhood is a free trading app that lets you trade stocks, ETFs, options, and cryptocurrency 100% commission-free.

It's great for traders who want to cut down costs. However, this very simple app lacks research, tools, and account options.

It's marketed as the brokerage for those "other than the wealthy."

They don't offer physical branches, banking, or manual account management options. This is how they cut the fat.

The app makes it simple and walks you through the trading process, but you won't get any investing guidance.

Pros & Cons

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PROS:

• Completely 100% commission free
  
• No minimum to start
  
• Offers fractional shares
  
• User friendly app
  
• Real time market updates
  
• Free extended trading hours
  
• Free cash card account
  
• SIPC protected
  
• Gives 1% match on IRA contributions

CONS:

• Limited research and tools
  
• No mutual funds or bonds
  
• Weak customer service

If you're looking for a more beginner-friendly alternative, check out Acorns. The platform helps you get started fast, even if you're not an investing expert yet.

Compare Investing App Promos

Get a Free Stock (worth between $5 and $200)

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$10 Investment Bonus

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• Open an Acorns account (new users only)
• Set up the Recurring Investments feature
• Have your first investment be made successfully via the Recurring Investments feature

Sign Up and Get $5

Click Here to Sign Up and Get $5

• Sign up, add at least $5 to your account and get a $5 bonus.
• Invest with fractional shares
• Get portfolio recommendations

Who Robinhood is Good For

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Originally, Robinhood was invented to help Millennials get started investing without giving up a majority of their earnings to commissions. But Robinhood could also be good for:

• Beginners without a lot of capital to invest.
  
• Active stocks, ETFs, and options traders.
  
• Those who want to try trading cryptocurrency.
  
• Self-employed or gig workers who want to grow their retirement savings.

If you don't require a great deal of research and are confident to make investments on your own, Robinhood could be a great way to get started.

Get started with Robinhood: Claim your free stock today

Pricing & Fees

Robinhood has:

• No trade commission fees
  
• No account maintenance fees
  
• No inactivity fee
  
• No bank transfer fees (incoming or outgoing)
  
• No account transfer fee (incoming)
  
• No returned check (non-IRA), ACH, wire & recall/stop payments fees

Some account fees you may encounter are:^[3]

• $100 account transfer fee (Outgoing)
  
• $20 domestic overnight mail
  
• $50 international overnight mail
  
• $2 per month for paper statements
  
• $25 returned check - IRA Rollovers
  
• Early IRA Match Removal Fee (variable)

Stop overpaying commissions. Use Robinhood instead

Investments & Account Options

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Robinhood only has these trading options:

• Stocks
  
• ETFs
  
• Options
  
• Cryptocurrencies (ETC, ETH, BSV, BCH, BTC, DOGE, LTC, COMP, MATIC, SOL, SHIB, AVAX, ADA, LINK, XLM, UNI, USDC)

Robinhood offers an individual taxable account and retirement account. There are no college and education savings options.

If you're looking for a more robust crypto alternative, check out Coinbase. This popular exchange supports more cryptocurrencies and has an easy-to-use interface.

Is Robinhood Safe?

Robinhood is legitimate. Your investments are covered by the Securities Investor Protection Corporation (SIPC). The SIPC insures the stocks and options investments in your account up to $500,000 (including $250,000 for claims for cash) if Robinhood fails. It does not protect against investment losses from the market.

Robinhood is also a SEC-registered broker-dealer, and a member of the Financial Industry Regulatory Authority (CRD #165998).

Types of Accounts

Robinhood offers different types of accounts. Each one is designed to suit different investing needs.

Robinhood Instant (free):
You will automatically start with the Instant account when you sign up. This account gives you:

• Instant deposits up to $1,000 (instead of having to wait the usual 5-6 days for ACH to clear)
  
• Instant access to funds after selling
  
• Extended trading hours

Get a Free Stock (worth between $5 and $200)

Click Here to Get a Free Stock

Robinhood Gold ($5/month, $2,000 minimum):
This is Robinhood's premium margin trading service. You get more buying power depending on your account size and larger instant deposit amounts. Read more below.

Robinhood Cash (free):
This account does not have instant deposits or instant access to funds. However, there are no restrictions on day trading. And you cannot invest on margin.

Robinhood IRA:
With the Robinhood Retirement, you can choose to invest in stocks and ETFs through traditional or Roth IRA.

You can get a 1% match on every dollar you contribute to your IRA account from any linked external bank account. Unlike an employer 401(k) match, you don't need an employer to earn IRA Match with Robinhood IRA. This account gives you:

• 1% IRA match on contributions
  
• IRA Instant Deposit up to $1,000
  
• Custom recommended portfolio of ETFs
  
• No commission-fees

How do I get my money out of Robinhood?

You can withdraw your funds into your linked bank account for up to $50,000 per day via ACH transfers and up to $5,000 with instant transfers. From your account options, just select "Transfer" and then "Transfer to Your Bank" to initiate the withdrawal. There is no fee to withdraw.

Here are some withdrawal rules:

• After a sale, you must wait for the funds to settle before being able to withdraw. The settlement period is the trade date + 2 trading days.
  
• After a deposit, you can only withdraw funds to the bank account from which they were deposited for the first 60 days.

Deposit $100 and Get $10

Deposit $100 and Get $10

Expires 12/31/2023

For a limited time, you can get $10 when you deposit $100 in your eToro account. Here's how:

1. Sign up for an eToro account
2. Deposit $100
3. Explore stocks, ETFs, and crypto

You'll automatically receive $10 directly to your account balance. eToro USA LLC; Virtual currencies are highly volatile. Your capital is at risk.

Sign Up and Get $5

Sign Up and Get $5

• Sign up, add at least $5 to your account and get a $5 bonus.
• Invest with fractional shares
• Get portfolio recommendations

App Features & Tools (Free)

Robinhood does not have as much tools as other more robust brokerages, but it has enough for the basic investor. Here are some features the app has.

• Extended trading hours. You can trade 2.5 hours earlier before the market opens and 4 more hours after it closes. Traditionally, markets are open from 9:30 am to 4:00 pm, extended-hours means trading from 7:00 to 9:30 a.m. or 4:00 to 8:00 p.m. ET

• Market orders: Execute orders including limit, stop limit, and stop orders.

• Collections: This feature organizes stocks by sector. Sort and compare stocks side-by-side.

• Price Paid: View the average price per share that Robinhood investors paid. This helps beginners judge if the stock is a good buy or not.

• Market updates: Get real-time updates on stocks in your watch list.

• Charts: See candlestick charts and indicators for stocks and cryptocurrencies.

• Day trading: Perform up to 3 day trades in a five trading day period. Cash account users or those with $25,000 account balance have no limitations.

• Instant deposit: Bank transfers up to $1,000 are instantly available for investing (for Instant and Gold account users).

Robinhood Gold (Paid)

Robinhood Gold is the premium margin account (which means you can trade with borrowed money). You can try it for free for 30 days. The fees and minimums are:

• $2,000 minimum balance to trade on margin
  
• $5/month account fee

Your first $1,000 of margin is included. If you borrow more than that, you'll pay 7.25% yearly interest on the amount you use above $1,000.^[4]

Some premium features of this account includes:

• Increased buying power. You get up to 2x buying power. For example, if you have $10,000 in cash, you can get up to $10,000 margin for a total of $20,000 buying power.

  You can also set a margin limit so you only borrow what you're comfortable with.

• Bigger instant deposits. Your instant deposit limit is based on your account balance.
  • Up to $5,000 for all Gold users
    
  • Up to $10,000 for balances over $10k
    
  • Up to $25,000 for balances over $25k
    
  • Up to $50,000 for balances over $50k

• Morningstar research. Get in-depth research reports from Morningstar on 1700 stocks.

• Level II market data. See real time bids from Nasdaq.

Robinhood Cash Card

Robinhood offers a Cash Card. There is no account service fee or minimum balance requirement.

Some features include:

• Free debit card
  
• Earn cash back on purchases
  
• Earn weekly bonuses on round-ups
  
• No fees at 90,000+ Allpoint and MoneyPass ATMs
  
• No overdraft fees
  
• Get direct deposits up to 2 days early

You can choose to automatically invest part of your paychecks in stocks and crypto. Plus, you can round up your purchases and invest the change.

This account provides FDIC insurance up to the federal limit of $250,000.

Customer Service

Robinhood offers 24/7 live phone support. A live human will help with any questions from your account to options to crypto. Just request for a call through the Robinhood app, and an agent will get back to you. Support will be personalized based on your question.

Note that only existing users can talk to customer service. There's no general number that anyone can call.

Robinhood has had a lot of criticism for their poor customer service. So we love to see that it has stepped up in this department and is making customer needs a priority.

Robinhood also has an extensive FAQ section in their Help Center on the site. That may be enough if you're okay with finding answers on your own.

How It Compares

Robinhood vs E*TRADE:
E*TRADE is a full service brokerage. It offers a wide array of investment products and account options (including IRAs). It also has two robust platforms along with plentiful research, whereas Robinhood is more bare-bones.

Combining the services of the two brokers, though, can give you the best of both worlds. You can get more advanced and plentiful research through E*TRADE and save on commissions on your stock trades through Robinhood.

	Robinhood	E*TRADE
	Benefits and Features
Stock Trading	$0	$0 per trade
Options Trading	$0	$0 per trade + $0.65 per contract $0 per trade + $0.50 per contract if you make 30+ trades a quarter
Annual Fee	None
Cryptocurrency Trading
Minimum Deposit	$0	$0 for self-directed brokerage accounts; Managed portfolios start at $500 minimum
Mutual Fund Trading	No	$0 for no-load, no-transaction-fee funds; $19.99 for transaction-fee funds
Commission Free ETFs	All U.S. listed ETFs	250+
Phone Support	24/7
Live Chat Support	No
Email Support	Yes
Human Advisors	No
Robo Advisor	No
Assets Under Management	$80 Billion
Penny Stocks
Tax Loss Harvesting	No
Goal Tracker	No
Automatic Deposits	Yes
Broker Assisted Trades	Not available	$25 + Regular Commission
Customer Service		800-387-2331
Good For	Beginners; Active traders
Inactivity Fee	$0	$0
Maintenance Fee	$0	$0
Online Platform	Yes
iPhone App	Yes (4.2 stars, 4m ratings)
Android App	Yes (3.8 stars, 453k ratings)
Banking		Checking account offers no minimum balance requirements, free online bill pay, and unlimited debit card and check transactions.
Mobile App	Yes
Desktop App		E*TRADE Pro (requires you to execute at least 30 trades during a calendar quarter or maintain brokerage account balance of at least $250,000)
Two-Factor Authentication	Yes
Futures Trading		$1.50 per contract, per side + fees (excluding bitcoin futures)
Locations	No
Online Community	No
Seminars	No
Virtual Trading	No
Fractional Shares	Yes
Taxable Accounts	Yes
401k Plans	No
IRA Accounts	Yes
Roth IRA Accounts	Yes
SEP IRA Accounts	No
Trust Accounts	No
529 Plans	No
Stock Trading
Options Trading
Minimum Deposit
Customer Service
Mobile App
Commissions and Fees
Ease of Use
Research
Banking
Online Community
Trading Platform
Blank fields may indicate the information is not available, not applicable, or not known to CreditDonkey. Please visit the product website for details. Robinhood: Pricing information from published websites as of 04/18/2020. E*TRADE: Pricing information from published website as of 12/05//2020.

Robinhood vs Acorns:
Acorns aims to help young adults save more and invest their spare change. You link your bank and credit cards to the account, and every time you make a purchase, Acorns rounds up the purchase and invests the change. Robinhood also has this "spare change" investing feature via Robinhood Cash Card.

Acorns automatically selects your investments and manages your portfolio for you. You don't get choose to the stocks like you would with Robinhood.

There is a monthly fee of $3 per month, but if you usually have trouble saving and don't know much about investing, then that could be worth it.

	Acorns	Robinhood
	SPECIAL OFFER $10 Investment Bonus - Learn More	OFFER Get a Free Stock (worth between $5 and $200) - Learn More
	Benefits and Features
Savings	No
Stock Trading	Part of service fee. No add-on trading fees.	$0
Options Trading	No	$0
Annual Fee	$3/mo for Acorns Personal (includes personal taxable account, IRA, and checking account) $5/mo for Acorns Family (includes everything in Personal plus investment accounts for kids)	None
Cryptocurrency Trading	No
Minimum Deposit	$0	$0
Checking	Yes
Mutual Fund Trading	No	No
Commission Free ETFs	A selection automatically chosen by Acorns	All U.S. listed ETFs
Phone Support	Yes	24/7
Live Chat Support	No	No
Email Support	Yes	Yes
Human Advisors	No	No
Robo Advisor	Yes	No
Assets Under Management	$4.7 Billion	$80 Billion
Tax Loss Harvesting	No	No
Goal Tracker	Yes	No
Automatic Deposits	Yes	Yes
Broker Assisted Trades	Acorns automatically invest and trade for you	Not available
Good For	Beginners; Passive investors; Those who have trouble saving/investing on their own	Beginners; Active traders
Inactivity Fee	None, but you will keep paying the monthly fee	$0
Maintenance Fee	Monthly fee for the service	$0
Online Platform	Yes	Yes
iPhone App	Yes (4.7 stars, 760k ratings)	Yes (4.2 stars, 4m ratings)
Android App	Yes (4.3 stars, 156k ratings)	Yes (3.8 stars, 453k ratings)
Banking	Included in Acorns Personal ($3/mo). Free metal debit card, no minimum balance, no overdraft fees, and 55,000+ fee-free ATMs nationwide.
Mobile App	Yes	Yes
Two-Factor Authentication	Yes	Yes
Locations	No	No
Online Community	No	No
Seminars	No	No
Virtual Trading	No	No
Fractional Shares	Yes	Yes
Taxable Accounts	Yes	Yes
401k Plans	No	No
IRA Accounts	Yes	Yes
Roth IRA Accounts	Yes	Yes
SEP IRA Accounts	Yes	No
Trust Accounts	No	No
529 Plans	No	No
	$10 Investment Bonus $5 Investment Bonus Try Acorns Today!	Get a Free Stock (worth between $5 and $200) Commission-Free Trades Commission-Free Options Investing
Blank fields may indicate the information is not available, not applicable, or not known to CreditDonkey. Please visit the product website for details. Acorns: Pricing information from published website as of 09/28/2020. Robinhood: Pricing information from published websites as of 04/18/2020.

Robinhood vs Stash:
Stash offers thematic investing options by letting you choose stock and ETF categories that matter to you. It's aimed towards beginners and will guide you into making smart investment choices for you. But it is not a robo-advisor and will not manage your portfolio.

Stash has no minimum opening balance or investment requirements. It does cost $3 per month. Like Robinhood, Stash also allows you to purchase fractional shares, which lowers the amount you need to start investing.

	Stash	Robinhood
	SPECIAL OFFER Sign Up and Get $5 - Learn More	OFFER Get a Free Stock (worth between $5 and $200) - Learn More
	Benefits and Features
Stock Trading	$0	$0
Options Trading	No	$0
Annual Fee	STASH Growth ($3/mo) STASH+ ($9/mo)	None
Minimum Deposit	$0	$0
Mutual Fund Trading		No
Phone Support	Yes - normal business hours, plus Sat & Sun 11a-5p ET	24/7
Live Chat Support	No	No
Email Support	Yes	Yes
Human Advisors	No	No
Assets Under Management	$3 Billion	$80 Billion
Tax Loss Harvesting	No	No
Goal Tracker	Yes	No
Automatic Deposits	Yes	Yes
Online Platform	Yes	Yes
iPhone App	Yes	Yes (4.2 stars, 4m ratings)
Android App	Yes	Yes (3.8 stars, 453k ratings)
Banking	All users get a cash account with a debit card. No minimum balance, no overdraft fees, and free ATM access at 19,000+ ATMS.
Mobile App	Yes	Yes
Fractional Shares	Yes	Yes
Taxable Accounts	Yes	Yes
401k Plans	No	No
IRA Accounts	Yes	Yes
Roth IRA Accounts	Yes	Yes
SEP IRA Accounts	No	No
Trust Accounts	No	No
529 Plans	No	No
	Sign Up and Get $5 Early Payday	Get a Free Stock (worth between $5 and $200) Commission-Free Trades Commission-Free Options Investing
Blank fields may indicate the information is not available, not applicable, or not known to CreditDonkey. Please visit the product website for details. Stash: Pricing information from published website as of 08/14/2019 Robinhood: Pricing information from published websites as of 04/18/2020.

Bottom Line

Is Robinhood the only app you should use, even as a beginning investor? We don't think so, but we do think it could be a great way to supplement your investments with other brokers. Without a commission fee, you do stand to save some money on your investments.

If nothing else, it's a great way to get your feet wet and learn how the stock market works without breaking the bank in fees. As always, you should invest with caution, conducting as much research as possible before choosing your investments.

Get a Free Stock (worth between $5 and $200)

Click Here to Get a Free Stock

Remember: All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Securities offered through Robinhood Financial LLC and Robinhood Securities LLC, which are members of FINRA and SIPC. CreditDonkey is not a member of FINRA or SIPC.

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