1. What is Robinhood?
  2. Is Robinhood safe or a scam?
  3. Accounts
  4. Market Instruments
  5. Fees
  6. Deposits and Withdrawals
  7. Trading Platform
  8. Customer Support
  9. Education
  10. Conclusion

What is Robinhood?

Robinhood is a US-based broker, which became popular due to its fresh approach to trading, new vision on user experience and developed a strong brand. 

Since its establishment in 2013 the broker has walked a path of constant development and has become one of the preferred trading providers in the US. It should be mentioned that Robinhood is available only in the US, however, they do have plans to launch branches outside the US and attract more investors. 

This is indeed an absolutely progressive trading opportunity, as previously, the majority of US residents could only trade through offshore entities, which we never recommend trading with due to their lack of reliability and regulation.

Robinhood - official website

10 Points Summary
🏢 HeadquartersUSA
🗺️ RegulationSEC
📉 InstrumentsStocks, ETFs, Options and Cryptocurrencies
🖥 PlatformsProprietary
💳 Minimum deposit0 US$
💰 EUR/USD SpreadDoes not offer Forex
💰 Base currenciesUSD
🎮 Demo AccountNo
📚 EducationRobinhood Learn Center with educational articles
☎ Customer Support24/5

Is Robinhood safe or a scam?

The original question which any trader should ask before putting any money or deciding whether to trade with a particular broker or not. Safety always stands at the priority and in fact, the only measure that can ensure you of a safe trading environment is the regulatory status of the broker.

This means that the broker that is licensed by the respected authority in the jurisdiction or another has been checked timely before its launch, watched how trading and overall service is delivered at all times and can be sharply fined in case the company does not follow safety guidelines.

So in the case of Robinhood you will find all the abovementioned operational standards applied, as the Robinhood is a trading name used by the Robinhood Securities LLC, which is regulated by the world respected federal regulator the SEC (The U.S. Securities and Exchange Commission) and self-regulatory organization FINRA (The Financial Industry Regulatory Authority).

the Robinhood Securities LLC

How are you protected?

As we always recommend trading with regulated exchanges only, Robinhood operations are also strictly overseen and comply with international safety measures.

As a FINRA member Robinhood LLC falls under the US investor protection scheme, the SIPC (The Securities Investor Protection Corporation). The limit for the compensation from the SIPC is $500,000 including a $250,000 cash limit. 

The broker does not provide negative balance protection.

Account types

The broker features several account types. First, when you enroll you will be provided with the standard Robinhood instant account and be able to upgrade to Robinhood Gold or Robinhood Cash accounts. 

Robinhood Gold

Robinhood Gold is a suite of powerful tools, data, and features designed to take your investing to the next level. With Gold, you can get access to four premium features: bigger Instant Deposits, Professional research from Morningstar, Level II market data from Nasdaq, Access to margin investing. You can try Gold for free for the first 30 days (the $5 monthly fee will be waived).

Cash management

Cash Management is a feature offered through your brokerage account where you’ll receive a debit card² issued by Sutton Bank. You can use your debit card and routing and account numbers to buy groceries, pay bills, send checks, and more. Your uninvested brokerage cash is swept to the broker’s network of program banks where it starts earning 1.00% annual percentage yield (APY)³.

Cash Management is no longer accepting new customers at this time.

Trading Instruments

Robinhood offers many types of products to trade so any trader will find a necessary instrument according to personal needs and best knowledge. This range includes Stocks, ETFs, Options and Cryptocurrencies. Commission-free offer for all the mentioned assets attracts investors and trading professionals. 

Robinhood is one of the few brokers who allows commission free crypto trading and this trading opportunity definitely earns some extra points. Moreover, Robinhood traders can buy some of the cryptos directly in their stock trading accounts. Robinhood Crypto sources liquidity (the availability of assets) from multiple trading venues to allow traders to receive competitive pricing.

Trading Instruments

Fees

Robinhood broker provides commission-free US stock and ETF trading and is considered to have some of the lowest costs in the industry. When it comes to options trading, Robinhood does not charge a per-contract fee. There is also no account opening, withdrawal, account maintenance or inactivity fees. 

However, self-regulatory organizations (SROs) such as the Financial Industry Regulatory Authority (FINRA) charge Robinhood a small fee for sell orders. They charge these fees for all sell orders, regardless of the brokerage. Robinhood passes these fees to its customers and remits them to the applicable SROs.

FeesNadex FeesDukascopy FeesInteractive Brokers Fees
Deposit FeesNoNoNo
Withdrawal FeesNoNoNo
Comission based feeNoYesYes
Fee rankingLowLowLow

Deposits and Withdrawals

The only deposit method available for Robinhood traders is bank wire transfer. Debit/credit cards or e-wallet payments are not supported. The broker made it a bit easier and faster with the Instant Deposit feature. It gives traders immediate access to $1,000 after they initiate a deposit. 

Also, with Robinhood Gold, they can get even bigger Instant Deposits—up to $50,000 depending on their brokerage account balance and status. 

Robinhood minimum deposit

There is no minimum deposit requirement, again due to the tailored solutions Robinhood provides.

Robinhood minimum deposit vs other brokers

Robinhood Most Other Brokers
Minimum Deposit $0 $500

Robinhood withdrawal fee

Broker does not charge any withdrawal fees. Robinhood’s withdrawal options are only Bank Wire. Also, the broker mentions that the client is responsible for all charges occurring upon the money transfer which are generally around $25-$50.

Trading Platforms

Web Platform

Robinhood provides a powerful, but simple and easy-to-use web trading platform with research and discovery tools. The expansive research and discovery tools aimed to make every trader a better-informed investor. There are many cool advanced features on the web platform, including Analyst Ratings, News and Fundamentals, Collections of Stocks etc.

Mobile platform

Mobile trading platform is also equipped with plenty of features, including customizable alerts, news feed, candlestick charts and ability to listen live to earnings calls. It is available for both iOS and Android devices.

Mobile platform

There is no desktop trading platform in broker’s offer.

Customer Support

Robinhood’s customer support options are quite limited and a lot of users see it as a drawback. The main communication channels are email and social media. There are also some in-app request options, but neither works 24/7. However, the support team is fast with their responses and helpful.

Education

Education section will only be useful to the beginners. Robinhood states that education is the key to financial empowerment, however, it does not provide enough materials. There is a Robinhood Learn section which offers hundreds of digestible articles on the basics of investing, investing lingo, and market trends. That’s pretty much it when it comes to education on the platform.

Educational platform

Conclusion

Overall, within Robinhood Review we revealed a company that stands on a strong background and has a quite competitive offering for trading. It is a good choice of a well-regulated broker, however, the readers should consider the drawbacks we mentioned as well as the trader experience fit. It doesn’t seem the broker would work for the beginners due to lack of education materials. Also, some of the experienced brokers can find the platform missing some important analytical tools. However, an unusual nature and vision of the broker should definitely be an advantage for curious investors.

No news available.

Leave a Reply

Your email address will not be published.

* code