What is the downside of Robinhood?

Robinhood is a user-friendly broker with minimal fees, but it isn't right for everyone. For one thing, it doesn't offer mutual fund investing, nor does it give standard members access to any stock research reports. Also, it doesn't offer any account types beyond standard brokerage accounts and traditional and Roth IRAs.

Can I buy crypto on Robinhood?

Robinhood facilitates cryptocurrency trading on its platform, and there are currently 15 different digital assets available, including Bitcoin, Bitcoin Cash, Dogecoin, Ethereum, Litecoin, and Stellar Lumens. Plus, Robinhood is one of the few places to buy and sell cryptocurrencies without commissions.

Robinhood Review: Why We Think It (Still) Lives Up to the Hype

Robinhood might be for you if: You want to trade stocks from your phone for $0 per trade. It has lost its crown as the only broker to offer free trades. But it seems determined to keep the throne by creating new perks. Its Robinhood Gold subscription gives unique, valuable benefits to long-term users. In this Robinhood review, we'll cover all you need to know.

Ratings Methodology

Robinhood

Open Account

Our Rating:

Rating image, 4.5 out of 5 stars.

4.5/5

Bottom Line

Robinhood is a simple, low-cost brokerage with a few rare perks. What it lacks in customer service, it provides in a smooth in-app experience. Without membership, you will lack research resources but still be able to trade affordably. With a membership, you can earn 3% and 1% match on IRA and taxable deposits. The app grows fast -- new perks are being unlocked at a rapid pace.

Fees:

$0 for stocks, ETFs, and options; up to $6.99 monthly for Robinhood Gold

Account Minimum:

$0

Special Offer

Earn an uncapped bonus

Open Account for Robinhood

On Robinhood's Secure Website.

Alternatives to Consider

We recommend comparing brokerage options to ensure the account you're selecting is the best fit for you. To make your search easier, here's a short list of our best trading platforms of 2024.

Account	Fees	Account Minimum
Rating image, 4.5 out of 5 stars. 4.5/5 Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor.	$0 for stocks, $0 for options contracts	$0	Open Account for SoFi Active Investing
Rating image, 4.5 out of 5 stars. 4.5/5 Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor.	$0 for stocks, ETFs, and options; up to $6.99 monthly for Robinhood Gold	$0	Open Account for Robinhood
Rating image, 4.5 out of 5 stars. 4.5/5 Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor.	Commission-free; other fees apply	$0	Open Account for E*TRADE

Full Robinhood review

Robinhood is an affordable discount broker at its core. It's easy to pick up and get started, even if you're totally new to investing. But a few features set it apart from your vanilla trading app.

One, its premium membership gives a ton of perks that are actually useful (like deposit match). Two, its commissions tend to be lower than other brokers, especially for crypto and options.

Our brokerage rating methodology

At The Motley Fool Ascent, brokerages are rated on a scale of one to five stars. We primarily focus on fees, available assets, and user experience; however, we also take into account features like research, education, tax-loss harvesting, and customer service. Our highest-rated brokerages generally include low fees, a diverse range of assets and account types, and useful platform features.

See our full methodology here: Ratings Methodology

My investing experience

I started investing just before the 2020 stock market crash, about four years ago. Safety is important to me. I love brokers that keep things simple and well-insured. Since I'm a long-term investor, I prefer brokers that boost my retirement savings. At the very least, it should be easy for me to customize my retirement portfolio with 25-plus stocks.

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Rare perks: IRA match and 24 hour trades

Brokers tend to look the same these days. Robinhood is a notable exception. It gives two rare perks: IRA match and 24-hour trades. Robinhood matches your deposits 1% or 3%, so long as you stick around. The broker also lets you trade a variety of stocks 24 hours, five days a week. That's great when you're crossing time zones and outside the U.S.

We tried it: Our team's experience

Here at The Motley Fool Ascent, we pride ourselves as real users of most of the products across our site. Writers Cole Tretheway and Brittney Myers use Robinhood -- here are their experiences:

Brittney's review

Of all the investing platforms I've used, few are as easy to navigate as Robinhood, and that goes for desktop and mobile app platforms alike. It's simple to make trades and manage my accounts whenever or wherever the need arises. Robinhood is my go-to place for my recreational investing hobby.

Cole's review

My favorite feature is access to all your notifications in one place. These include buy/sell requests and completions, shareholder updates, and Robinhood app updates. Less fun, it also includes things like margin call warnings. Robinhood feels video-gamey in a good way.

Investment offerings

Robinhood lets you invest in the basics through standard accounts. You can purchase fractional shares of stocks and ETFs for as little as $1 on the platform.

Investments

Cryptocurrencies
ETFs
Fractional shares
Stocks

Brokerage accounts

IRA
Roth IRA
Traditional brokerage

TIP

Other financial services

Robinhood gives you access to a little more than brokerage services. What it offers:

Credit card
Debit card

Commissions and fees

Robinhood is one of the lowest-cost brokers around. What it lacks in account types, it makes up for in $0 commissions. It's one of the few brokers that charges $0 per-contract options fees.

Reason	Cost
Stock and ETF trades	$0
Options trades	$0
Gold membership (optional)	up to $6.99 monthly
Outgoing transfer (ACATS)	$100
Outgoing transfer (Wire)	$25

Data source: Robinhood

TIP

Optional membership: Robinhood Gold

Robinhood's premium membership hits the mark. Alone, the 3% IRA match and 1% match on taxable deposits make the up to $6.99 monthly membership worth looking into. There's a clear path to earning back your Robinhood Gold membership fees, and then some.

Margin rates

Robinhood gives you hyper-competitive margin rates. The more you borrow, the lower your rate gets. Robinhood Gold members borrow the first $1,000 of margin at a 0% interest rate.

Amount borrowed	Margin rate
Up to $50,000	6.75%
$50,000 up to $100,000	6.55%
$100,000 up to $1 million	6.25%
$1 million up to $10 million	6.00%
$10 million up to $50 million	5.95%
$50+ million	5.70%

Data source: Robinhood

Robinhood Promotions

Robinhood sometimes offers promotions that could save you money. Click below to go to our dedicated page covering current Robinhood promotions:

Robinhood Promotions

Research and education

If you're looking for free, in-depth stock research, you can do better than Robinhood. Frankly, the broker tailors its research and educational content to beginners. Only Robinhood Gold members get access to Morningstar research reports, and only on select stocks.

But Robinhood gives excellent educational resources to beginners. Robinhood posts many how-to articles on Robinhood Learn. It's a great place to search unfamiliar investing terms in plain English. It's useful for learning the basics. There's even lots of content on advanced topics, like options trading.

TIP

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Interface

For much of its history, Robinhood was a beginner-friendly trading app, and a leading one at that. Customers who value simplicity love Robinhood's trading platform. But beyond the app previously, there wasn't much of a functional web portal.

That's changed. Robinhood has rolled out expanded capabilities through the web version of its platform. Both the web portal and mobile app versions are simple in design and are intended to be easy to learn and use.

The desktop interface is great for reading news articles. It's also good for Morningstar research. You can do both on a big screen. It's a little harder to read these things on a phone. It can also be nice to scroll through your stocks on a big screen, so you can see the ratio of green (good) to red (bad) on a given day.

Be aware that two-factor authentication (2FA) may slow down your desktop login. Although 2FA is great for security, it makes it a little more of a hassle to use Robinhood on desktop. The app is more convenient for most things.

During Robinhood's "Gold Standard" event, CEO Vlad Tenev said that the Robinhood app would change its layout a lot. This is expected to roll out in 2024.

App

Upon opening the app, you can see your account balance and scroll to see your investments. Tabs along the bottom include "Investing," "Crypto," "IRA," "Spending," and Profile." You can monitor any account in one tap. It's fast and simple.

The colors are appealing -- a little too appealing, some might argue. And there's a point to be made there. Robinhood has gotten in trouble for "gamifying" its app before. Now, it seems to have dialed down these elements and hyped up its IRA perks, which are sturdy.

The Robinhood widget lets you see how your stocks are trending without opening the app. I recommend it, since you might be tempted to frequently open your account otherwise.

Customer service

Customer service reviews are mixed. Robinhood rates decently on the App Store (4.2) and Google Play (4.1). User complaints mostly address the layout, which some find confusing. On Trustpilot, Robinhood scores a 1.2. This is pretty typical for big financial services, though it could be much better. It scores slightly worse than Webull (1.4) and much worse than SoFi (4.6), two of its biggest competitors. Complaints address poor customer service and difficulty reaching out.

You can contact Robinhood customer service one of two ways:

Phone Monday - Friday between 7 a.m. and 9 p.m. ET.
24/7 online chat

You request a phone call in advance through the app. Or, you can send a chat and wait for a representative to get back to you. This could take a while depending on wait times.

Security

Robinhood takes standard measures to secure your accounts. Your investments are insured by SIPC insurance for up to $500,000 (including $250,000 for cash). If you opt into Robinhood's brokerage sweeps program, your cash moves to partner banks. There, it's FDIC insured up to $2.5 million.

Robinhood scrambles passwords, encrypts personal information, and requires 2FA upon login. These are all standard and important security measures that keep your money safe.

About

Robinhood was founded in April 2013 by Vladimir Tenev and Baiju Bhatt. They aimed to democratize investing. They wanted to "give everyone access to the financial markets, not just the wealthy."

Its popular trading app launched in March 2015. It was one of the first firms to offer stock trading without commissions. More than 800,000 people were on the waitlist for the app when it launched. It included millennials attracted by the end of fees and the lack of a minimum balance requirement.

In 2018, Robinhood made its appeal wider by adding cryptocurrencies like Bitcoin through Robinhood Crypto. This move led the way among mainstream brokers. It made Robinhood one of the first to offer an easy way to buy virtual coins without fees.

In 2021, Robinhood went public in one of the year's most anticipated IPOs. It now trades under the ticker HOOD. As of 2023, more than 10 million people use Robinhood as their primary brokerage.

Robinhood in the news

Robinhood has been the subject of controversy numerous times. While these issues are important for Robinhood to navigate and important for investors, we do believe Robinhood is a solid broker to consider, which is reflected in our overall rating.

Here are some of the serious issues that have arisen:

In December 2020, the Securities and Exchange Commission charged Robinhood with misleading consumers in statements made between 2015 and 2018 and executing trades at inferior prices.
In December 2020, the Commonwealth of Massachusetts accused the brokerage of gamifying trading, and steering inexperienced traders towards high-risk investments.
On Jan. 8, 2021, Robinhood froze trading of GameStop and several other stocks that were the subject of intense trading interest, angering many of its customers.
On June 30, 2021, Robinhood was fined $57 million and ordered to pay around $12.6 million to consumers who had experienced losses due to system outages during a period of market volatility in March 2020.

To be fair, Robinhood has done an excellent job of learning from these incidents. For example, it has done a good job of building its educational library and adding features for long-term investors, such as the availability of IRA investing.

Learn more about Robinhood

Keep reading about Robinhood on these pages:

Review sources

FAQs

Robinhood is a user-friendly broker with minimal fees, but it isn't right for everyone. For one thing, it doesn't offer mutual fund investing, nor does it give standard members access to any stock research reports. Also, it doesn't offer any account types beyond standard brokerage accounts and traditional and Roth IRAs.
Robinhood facilitates cryptocurrency trading on its platform, and there are currently 15 different digital assets available, including Bitcoin, Bitcoin Cash, Dogecoin, Ethereum, Litecoin, and Stellar Lumens. Plus, Robinhood is one of the few places to buy and sell cryptocurrencies without commissions.

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