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- Robinhood is a web-based brokerage providing commission-free trades on shares, ETFs, choices, and cryptocurrencies.
- This stock-trading app is finest for lively traders searching for commission-free buying and selling alternatives and cellular investing entry.
- Robinhood additionally affords fractional shares and money administration accounts.
- Robinhood solely offers particular person taxable accounts; you will not have entry to joint accounts, custodial accounts, retirement accounts, or schooling financial savings plans.
- Click here to open an account with Robinhood.
Robinhood is finest for lively traders all in favour of putting commission-free trades in stocks, choices, ETFs, and cryptocurrencies. The brokerage has no minimal account dimension necessities for many of its investments, however you will should pay minimal opening deposits for its fractional shares and gold choices (you will additionally want at the least $25,000 for sample day buying and selling.)
Not solely is that this platform a great match for lively and day merchants, however it’s additionally a aggressive choice for margin merchants. You possibly can spend money on gold on margin with Robinhood Gold, that means you will be borrowing cash — or margin loans — from the brokerage to pay for higher-value investments.
Robinhood’s net platform and cellular choices are additionally simple and simple to navigate. And you will get one share of free inventory once you open an account. You may additionally get a free inventory everytime you make profitable referrals.
One factor to look out for is that Robinhood primarily affords particular person taxable brokerage accounts; this is likely to be a difficulty for married {couples} or different people who wish to make investments collectively. The brokerage affords a cash management account, however it does not present retirement accounts, joint accounts, custodial accounts, or schooling financial savings plans. This implies you will be restricted by way of the monetary targets it can save you towards.
One other downside is that Robinhood does not present as a lot analysis and buying and selling instruments as different widespread brokerages. Although the corporate affords an academic weblog, you’ll be able to solely reap the benefits of skilled analysis in case you’re a Robinhood Gold member.
If you happen to’re seeking to passively invest your cash, or make use of buy-and-hold methods, Robinhood is probably not your best option. The platform additionally does not supply automated funding recommendation or professionally managed portfolios.
Backside Line: Robinhood is finest for lively merchants, day merchants, and margin merchants who wish to buy and commerce investments with no fee. The stock-trading brokerage may additionally be a great match for you in case you’re seeking to spend money on digital belongings similar to cryptocurrencies.
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| Editor’s score | 4.1 out of 5 |
| Buying and selling charges | 0% |
| Account minimal | $0 ($1 for fractional shares; $2,000 for gold) |
| Promotion | Get a free inventory once you open account; free inventory for each profitable referral. |
| Open Account | |
Robinhood professionals and cons
Professionals
- Free inventory, choice, ETF, and cryptocurrency trades
- Fractional shares and gold investing
- Money administration accounts out there
- Web site is straightforward to navigate
Cons
- Lack of investing analysis and buying and selling instruments
- No retirement accounts, joint accounts, or schooling financial savings accounts
- No mutual funds
- Restricted customer support availability
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Min. Funding $0 ($1 for fractional shares; $2,000 for gold) |
Min. Funding $0 |
Min. Funding $0 |
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Buying and selling charges 0% |
Buying and selling charges 0% (as much as 0.35% for automated funding recommendation) |
Buying and selling charges 0% (1.25% markup for cryptocurrency) |
| Open an account | Open an account | Open an account |
Lively buying and selling is nice for individuals who worth a DIY, or hands-on, method to investing. Not like passive investing, the place you purchase and maintain investments for the long run, lively buying and selling consists of standard securities transactions. Lively traders sometimes purpose to capitalize off of short-term inventory market traits, so you will doubtless be shopping for and promoting your investments extra continuously in case you select this route.
Passive investing, however, means that you can park your cash into long-term investments similar to mutual funds, index funds, ETFs, or actual property. This type of investing is mostly safer — and normally prices much less — than lively investing.
You are able to do each, although. If you happen to’re all in favour of using each lively and passive investing methods, you actually can. Actually, many monetary specialists advocate diversifying your portfolio amongst a number of asset lessons to scale back general danger.
If you happen to just like the sound of lively buying and selling, and do not thoughts doing a little bit of your personal analysis in your investments, Robinhood’s low charges and commission-free securities might be a great match for you.
Shares and funds
As talked about earlier, Robinhood grants you entry to limitless commission-free inventory, ETF, and choices trades. You may make trades utilizing the corporate’s net platform or cellular app. The brokerage offers cellular entry for each iOS and Android gadgets.
Robinhood additionally affords fractional shares. This implies you could buy parts of inventory in corporations with out paying the complete share value. You may solely want $1 to get began with fractional shares.
Choices
Robinhood’s commission-free choice buying and selling comes with a notable perk: no per contract charges. Many brokers cost underneath $1 per choices contract, and a few platforms use tiered pricing constructions that cost decrease charges for extra lively merchants and better charges for much less lively merchants.
However with Robinhood, you will incur no such charges. It is price mentioning, although, that choices investing carries extra danger than inventory and ETFs. Robinhood affords choices danger disclosures on its web site.
Cryptocurrency
This platform’s commission-free rule applies to cryptocurrencies as properly. The Robinhood Crypto service allows you to commerce an array of digital currencies similar to Bitcoin, Dogecoin, and Ethereum.
You need to use any funds you’ve got deposited into your brokerage account to buy cryptocurrencies by means of Robinhood Crypto.
Gold
Robinhood Gold means that you can commerce gold on margin and entry Morningstar skilled analysis reviews and NASDAQ market information. The account carries a $5 month-to-month price, and you can also make immediate deposits of as much as $50,000. You may want at the least $2,000 to get began.
With margin buying and selling, you are basically borrowing cash from a brokerage to spend money on securities or different monetary belongings you’ll be able to’t afford. Your investments function collateral for the margin mortgage, and you will have to pay again your borrowed funds.
Robinhood is a web-based investing platform providing commission-free buying and selling on a number of US-listed funding varieties. Robinhood additionally has a high-yield money administration providing, however it’s essential to do not forget that the corporate primarily affords particular person brokerage accounts.
As for eligibility necessities, you’ll be able to reap the benefits of the brokerage’s lively buying and selling alternatives as lengthy you are at the least 18 years outdated with a US residential tackle. US residents, US everlasting residents, and people with legitimate US visas all qualify.
In 2020, following the suicide of a younger person who’d amassed important monetary loss from an choices transaction, Robinhood announced that it was increasing its academic content material on choices buying and selling. The corporate additionally employed an choices schooling specialist and pledged to enhance its person interface.
Robinhood was established in 2013 and is headquartered in Menlo Park, California. In 2017, the brokerage positioned #7 on Quick Firm’s rating of the World’s Most Modern Corporations.
The corporate has raised $2.2 billion in funding, in line with Crunchbase.
Rickie Houston is a wealth-building reporter at Private Finance Insider who covers investing, brokerage, and wealth-building merchandise. Earlier than becoming a member of Enterprise Insider, he labored as a private finance author for SmartAsset. He’s additionally a Licensed Educator in Private Finance (CEPF).
