The Robinhood App: Pros and Cons

 Robinhood is a self-directed investment platform that opened in 2012. You’re eligible to use Robinhood if you:

• Are at least 18 years old
• Have a valid Social Security number
• Have a legal U.S. residential address
• Are a U.S. citizen, permanent resident, or have a valid U.S. Visa

Robinhood has served an important role in making the stock market accessible to everyone and encouraging a younger generation to consider investing. 

Robinhood’s Advantages

• Zero fees for trades. This used to be a big differentiator. Many other brokerages offer free trades now. But Robinhood deserves credit for dragging the industry into a new era in that regard.
• Accessible to everyone. In addition to $0 trades, Robinhood requires no minimum deposit and offers fractional shares. It doesn’t set minimums for investing in cryptocurrency, unlike most other platforms that deal in digital currency. Robinhood makes it easy to invest even in the most expensive stocks without much capital.
• The “easy button” for investing. Opening an account takes minutes. It’s possible to go from downloading the app to trading on the Robinhood platform in less than one hour. Deposits of less than $1,000 are instantly available to use. The charts and information are simple to understand, and it’s easy to make trades. It even syncs with TurboTax to help you do your taxes.
• Intuitive app. Robinhood’s app is the easiest way to “watch” the stock market that I’ve ever seen. It’s intuitive and streamlined, creating a great user experience if you want to monitor stock prices and the performance of your portfolio. It’s also easy to execute simple trades.
• High-yield savings. Robinhood’s cash management account currently pays 0.30% APY and automatically sweeps uninvested cash into savings. Clark frequently highlights that feature as a benefit of Fidelity, which does the same thing but currently pays only 0.01% APY. Robinhood’s cash management account is insured up to $1.25 million and offers access to more than 75,000 ATMs.
• Free stock for everyone. Robinhood gives one free stock to new members and says there’s a 1% chance that the stock it credits you will be valued between $50 and $200. You can also get free stock by referring new members.

Robinhood Review: Where It Falls Short

Robinhood Cash

The account currently pays you 0.30% APY. Like all variable rates, this could go up or down over time. … The only drawbacks with this account are that they don’t reimburse other ATM fees, and you do have to use their app. However, if you’re good with those conditions, enjoy a great cash management product.

Limited securities: Mutual funds and bonds — often included in well-diversified, long-term portfolios — aren’t supported.

One account option: For investing, Robinhood supports only individual taxable accounts (often called brokerage accounts. For most investors, investing through a taxable brokerage account should come only after they have invested 10% to 15% of their income for retirement in a tax-advantaged account like a 401(k) or IRA.

Customer support: Many brokerage customers understandably expect phone support, and they won’t find it here — Robinhood’s customer support is almost exclusively done through email. The company does not publish a phone number, and even after becoming a member and logging in, you’ll still be routed through a series of FAQs before you can get in touch through email. It does have a useful and well-organized help center online, and the website is easy to navigate and transparent.