Robinhood Ratings at a Glance
Robinhood’s substantial offerings include a wide variety of products.
Stocks: You can invest or day trade individual stocks of publicly traded companies on major stock exchanges through Robinhood without paying fees. Robinhood makes it cheap for you to invest because you can fractional shares of stocks.
ETFs: If you are risk-averse or don’t know individual stocks to pick, you can choose a wide range of ETFs available on Robinhood. ETFs are a great way to diversify with diversified pools of investments.
Options: Robinhood offers options trading, allowing you to buy and sell options contracts on stocks and ETFs. The options trading features on the platform are simple and easy to use compared to specialized options trading platforms.
Cryptocurrencies: You can trade cryptocurrencies, including top 10 cryptos like Bitcoin, Ethereum, Solana and Dogecoin, on Robinhood. The platform offers commission-free trading for cryptocurrencies, making it cheap for crypto investors to trade on the platform.
Learning resources: Robinhood has a substantial amount of educational materials and learning resources that teach you how to invest in cryptos, stocks and options trading.
Robinhood retirement: Robinhood also offers you options to save and invest for your retirement. The platform offers a 1% match to your IRA, with no employer necessary. If you are subscribed to Robinhood Gold, you’ll get as much as a 3% match to your IRA. The tax advantages of the IRA ensure that your earnings are tax-deferred and that you maintain tax-free growth potential.
Robinhood cash card: The platform also offers a debit card that is linked to your brokerage account. It charges no monthly fees or overdraft fees, and you don’t need to maintain a minimum balance.
Robinhood is not without fees. This list explains them.
- Regulatory transaction fee: Robinhood charges you a regulatory transaction fee. This fee is mandatory for FINRA members to cover the costs incurred by the government, including the U.S. Securities and Exchange Commission (SEC), for supervising and regulating the securities markets and securities professionals. As of Feb. 27, 2023, the regulatory transaction fee is $8 per $1 million of principal (only for sell orders), which is rounded up to the nearest penny. You are not charged this fee if your transaction is $500 or less.
- Trading activity fee (TAF): FINRA charges this fee to brokerage firms like Robinhood to recover the costs of supervising and regulating these firms. This fee is passed to Robinhood customers, except those who have 50 shares or less. As of Jan. 1, 2024, the TAF is $0.000166 per share (equity sells) and $0.00279 per contract (options sells).
- American Depositary Receipt (ADR) fee: ADRs are certificates that represent foreign stocks that you can trade on U.S. stock markets. The banks issuing these certificates may charge custodial fees that typically range from $0.01-$0.03 per share.
- Options regulatory and exchange fees: If you trade options on Robinhood, you’ll be charged an Options Regulatory fee (ORF). This fee is collected by the Options Clearing Corporation (OCC) from exchanges that offer U.S. options in connection with options transactions. The purpose of these fees is to recover a portion of the costs related to the OCC’s supervision and regulation of the options markets. Robinhood charges a $0.03 fee for each options contract traded on its platform to cover costs for fees paid to the OCC.
Robinhood’s platform is simple to use. You can easily access market data, manage your portfolios, and place orders with minimal effort. Signing up for Robinhood is easy and can be completed in a few simple steps as the platform guides you through the account creation process. All you have to do is provide basic personal information and verify your identity, and your account is set up.
While Robinhood has received praise for its simplicity and commission-free trading, it has also faced criticism for occasional technical issues, customer service response times and controversial decisions like the halting of trading on some stocks during the WallStreetBets short squeeze in 2021.
However, overall user sentiment remains positive, with many users appreciating the platform’s ability to reduce barriers to investing by offering a no-fee commission model.
Though you can access the platform from your desktop, Robinhood is optimized for mobile use. Its mobile app allows you to stay connected to the markets at all times. This way you can track real-time price movements of assets and make trading decisions quicker. This is why the platform appeals to investors seeking a mobile-first trading experience.
Robinhood uses robust safety measures to keep users’ money and information safe. To keep private data like financial and personal information safe, the app uses encryption protocols that are standard in the industry.
Robinhood also lets you add an extra layer of security to your accounts by offering two-factor authentication (2FA). In addition, the platform uses automated systems to identify and prevent fraud and theft. The majority of crypto coins are held in cold storage wallets, and Robinhood also carries crime insurance to protect a portion of assets from breaches or theft.
Robinhood has had security problems in the past like people getting into customer accounts without permission, but the company has taken steps to improve its security system and protect users better.
Robinhood offers offers basic customer support options. You can email and have a live chat with customer support representatives if you have any issues.
Despite providing different ways through which users can have issues resolved, there have been mixed reviews regarding the effectiveness of Robinhood’s customer service, with positive and negative feedback from users.
Robinhood vs Competitors
Robinhood has several competitors that include traditional brokerage firms like Charles Schwab and online trading platforms such as eToro, moomoo and Webull. While these competitors share similarities with Robinhood in offering commission-free trades and a range of investment options, they also have differences in terms of features, fees and user experience.
Let’s delve into a comparison of Robinhood and its competitors to help you make an informed decision about which platform best suits your investment needs.
Benzinga’s Robinhood review earns the platform a rating of 4 because of its user-friendly interface, commission-free trading and accessibility to a wide range of investment options, including stocks, ETFs, options and cryptocurrency.
However, it loses a point from its limited product offerings and customer support options. Overall, Robinhood remains a popular choice for both beginner and experienced investors seeking a streamlined and cost-effective trading experience.
Frequently Asked Questions
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Yes. Robinhood remains a widely used and reputable trading platform.
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The downside of Robinhood is limited product offerings, which may make it less appealing to advanced traders.
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Yes. Robinhood is good for beginners who are new to investing and need a simplified and intuitive interface to trade.
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Yes, it is possible to make money on Robinhood through various investment strategies. However, it’s important to note that investing involves inherent risks and there are no guarantees of profits.
