Robinhood Review 2024: Pros, Cons and How It Compares

Where Robinhood shines

IRAs with 1% match: One feature that sets Robinhood apart from other IRA providers is the 1% match on contributions (3% for Gold members). That feature was a first among non-employer-sponsored retirement accounts.

Costs: Robinhood is a true discount broker — although its offerings may not be as robust as some other brokerages, Robinhood has some of the lowest costs in the industry. This includes options trades, which don't carry a contract fee.

Free cryptocurrency trading: Robinhood offers access to more cryptocurrencies than any other stock trading app we review, and they're free to trade. However, if you compare Robinhood’s crypto offerings with pure-play crypto brokerages, that shine starts to fade. Crypto is also not available in Robinhood IRAs.

24/5 stock trading: Robinhood's 24 Hour Market feature offers customers the ability to place limit orders any time between 8:00 p.m. Sunday and 8:00 p.m. Friday.

IPO access: Robinhood lets users take part in a company’s initial public offering, or IPO. This has typically been reserved for financial institutions, though more brokerage firms are now offering this access.

Where Robinhood falls short

What type of investor should choose Robinhood?

Mobile users. Many of Robinhood's competitors have imitated elements of its app, and it's easy to see why. It offers one of the smoothest and easiest trading experiences of any broker we review (although as we'll discuss below, that ease-of-use may be a double-edged sword for some users).

IRA investors. Robinhood is still among the only non-employer-sponsored IRA providers that offers a percentage match on contributions consistently — not just as a limited-time promotion. The 3% match that Gold users get is comparable to the contribution matches offered by some employers in 401(k) accounts.

Margin traders. Robinhood offers some of the lowest margin rates of any broker we review: just 5.7% to 6.75%.

What the Nerds think 🤓

Robinhood at a glance

» Looking to switch brokers? View the best broker promotions right now

How to sign up for a Robinhood account

If you’re accustomed to using a smartphone — and Robinhood's target user base obviously is — you’ll find the sign up and account funding process quick and painless. It all happens within the app in a matter of minutes, with just a few quick questions that gather your personal information, contact details, Social Security number and means of funding your account. The company says approved customers are notified in less than an hour, at which point they can initiate bank transfers.

Robinhood uses instant verification with many major banks, saving users the hassle of reporting micro-deposits to an account to verify information. This means bank transfers of up to $1,000 are available instantly for investing. Deposits larger than $1,000 will take four to five business days to process. We should note, however, that Robinhood has been the subject of complaints suggesting that signing up may be too easy. So while it’s true you can start investing with Robinhood in no time, users should be certain they understand the risks of investing before diving in.

What to know about Robinhood's fees

Robinhood provides 100% commission-free stock, options, ETF and cryptocurrency trades, making it attractive to investors who trade frequently. However, some of its account fees put it at a disadvantage to its competitors.

One of the biggest fees Robinhood charges is the $100 outgoing ACAT transfer fee — that cost is on the high end. (An ACAT transfer is when you want to transfer your investments to another broker; there's no fee for selling your investments and having the money transferred via ACH to your bank.)

Robinhood also puts a sort of penalty on its IRA matching program: If you take money out of a Robinhood IRA after less than five years, Robinhood will take back the corresponding amount of the 1% match (3% for Gold) that you withdrew.

Only Robinhood Gold accounts earn a substantial interest rate on uninvested cash, get a 3% match in IRAs instead of 1%, and have access to live market data. Gold costs $5 per month.

Robinhood's trading platforms and apps

Robinhood's trading platform gets relatively high marks for its charting features, which allow customers to view technical indicators like moving averages. It also allows investors access to OTC stocks and IPOs, and allows trades any time between 8 p.m. Sunday and 8 p.m. Friday, Eastern time.

In October 2024, Robinhood launched Robinhood Legend, a free desktop platform with more advanced charting features and customizable layouts. Legend offers users enhanced chart capabilities — including the ability to see a variety of technical indicators, use drawing tools and set custom time intervals — that could come in handy for day trading. The launch of this desktop platform, which offers more sophisticated features than the mobile app, shows that Robinhood is expanding its offerings for advanced traders.

However, Robinhood loses marks in the trading platform category due to accepting payment for order flow (PFOF). In the last few years, regulators have expressed concern that the PFOF business model is a conflict of interest; it involves market-making firms paying brokers to route customer orders through them^[0]

Robinhood's investment selection

The securities available to trade at Robinhood are limited. Mutual funds and bonds aren’t supported, which can help build a diversified, long-term portfolio. Robinhood does, however, offer access to more than 650 foreign companies via American Depository Receipts. It also offers exchange-traded funds, including index and bond ETFs, and it's working on launching futures trading in the months ahead.

Like some other brokers, including Interactive Brokers, Fidelity and Charles Schwab, Robinhood offers fractional shares. That means you can pay as little as $1 for a portion of a share, even if that stocks' full share price is in the hundreds of dollars. This feature makes it much easier to build a diversified portfolio — you're able to buy stock in many more companies, even if you don't have a lot of money to invest.

Robinhood's taxable brokerage accounts allow margin trading, and offer some of the lowest margin rates in the business. Margin trading is not available in IRAs.

Crypto offering: Unlike many traditional brokerages, Robinhood users can buy 15 cryptocurrencies right in their taxable brokerage account. What's more, it's almost entirely free — the only non-network fee that Robinhood charges is 0.5% to 1.5% for purchasing crypto with a debit card.

Robinhood’s cryptocurrency trading is available in every U.S. state, although Stellar (XLM), Tezos (XTZ), Uniswap (UNI) and USD Coin (USDC) are not available in New York, and USDC is not available in Texas. You can begin trading with as little as $1. Crypto-crypto trading pairs are not available, and staking is only supported for Solana (SOL) at the time of last update.

The list of available cryptocurrencies is much smaller than you'll find at a true crypto brokerage, but it's among the largest selections of any stock trading app we review. Robinhood only offers crypto trading in taxable brokerage accounts — not in IRAs. Customers can withdraw crypto from Robinhood to a wallet of their choice.

Other key Robinhood features

Customer support

Robinhood's customer support features include 24/7 in-app chat, and extended-hours phone support available from 7 a.m. to 9 p.m Eastern time, Monday - Friday.

Robinhood also has an easily-navigable website, and a library of hundreds of educational articles as well as the "Investor's Guild" blog of expert commentary, plus a YouTube show.

IRA account

As mentioned above, Robinhood IRAs come with several features that are unusual for non-employer-sponsored retirement accounts, including a 1% match on contributions and a 3% match for Gold members (subject to a take-back provision if funds are withdrawn in less than five years), instant deposits up to $1,000, and recommended portfolios of ETFs. (Here's more on how Robinhood IRAs work.)

Robinhood Gold

Compared with Robinhood's free account tier, Robinhood Gold pays investors higher rates on uninvested cash, matches a higher percentage of IRA contributions, and provides access to research from Morningstar and market data from Nasdaq. The opt-in service carries a flat monthly fee of $5.

Robinhood Gold members get over 4% interest on their uninvested brokerage cash — one of the highest interest rates among similar brokers — and that money is swept into an affiliated bank account.

Gold members are also eligible for the Robinhood Gold Card, a credit card that offers 3% cash back on all purchases, and 5% cash back on travel purchases booked through the Robinhood travel portal. The card has no additional annual fees and no foreign transaction fees, and comes with perks like concierge service.

It's worth asking yourself if you really need those features when deciding whether or not Robinhood Gold is worth it for you.

Spending account

Robinhood also offers a spending account that comes with a debit card and $250,000 in Federal Deposit Insurance Corporation insurance via agreements with partner banks. The spending account allows users to send or receive money, set up direct deposit, and set up recurring investments from their paycheck.

Robinhood spending accounts also come with some unusual features, such as an opt-in program that lets users get their direct deposit paychecks up to two days early. Users can also opt to have their debit card transactions rounded up to the next dollar, with the extra change invested in stocks or funds. This round-up feature is similar to the round-up investing tactics made famous by robo-advisors Acorns and Stash.

Good to know about Robinhood

Subpar execution quality

As mentioned previously, Robinhood's execution quality is 95.62%, slightly below average. This may not make a difference for casual investors, but if you're doing a lot of day trading with a lot of money, you may want to look into brokers with higher execution quality — in particular, brokers that don't accept PFOF at all, such as IBKR Pro.

Is Robinhood safe?

Robinhood has not had any known major security incidents since 2021. But given the broker's checkered past, investors must determine for themselves whether Robinhood is safe enough to use.

How is Robinhood insured and regulated?

All investment comes with a risk of loss, but Robinhood carries several types of insurance that would protect customer funds in the event that Robinhood or its partner banks became insolvent.

Robinhood carries Securities Investor Protection Corporation (SIPC) insurance, which protects up to $500,000 per account, with a cash sublimit of $250,000. It has also purchased additional SIPC coverage which protects up to $50 million per account, including up to $1.9 million in cash ^[0]

Uninvested cash in Robinhood's cash sweep program and spending accounts is also covered by FDIC insurance, which protects up to $250,000 per account.

The broker is also regulated by the Securities and Exchange Commission and the Financial Industry Regulatory Authority, which police it for violations of securities laws and industry standards — although it's worth mentioning that over the years, Robinhood has been penalized several times for such violations.

Trust, safety and reliability

Robinhood has made efforts to reassure investors about the safety of its platform — including a guarantee that it will reimburse 100% of direct losses due to unauthorized account activity that isn't the fault of the customer.

However, Robinhood has been the subject of serious complaints and lawsuits over the years, which potential users shouldn’t ignore:

• On Jan. 18, 2024, Robinhood agreed to pay a $7.5 million fine over charges from Massachusetts securities regulators, who argued Robinhood used gamification tactics and in-app experiences like confetti and emojis to encourage riskier trades and strategies^[0]

  COMMONWEALTH OF MASSACHUSETTS OFFICE OF THE SECRETARY. IN THE MATTER OF: ROBINHOOD FINANCIAL LLC, . Accessed Jan 18, 2024.

  View all sources

  . While the issue was settled in 2024, we should note Robinhood had already discontinued some of these features, such as confetti, in 2021, after the case was initially filed.

• On Nov. 8, 2021, Robinhood announced a data security incident that revealed personal information for a portion of account holders, including email addresses, full names and, in limited cases, dates of births and ZIP codes. The company said it doesn't believe bank account, debit card or Social Security information was affected, and no customers experienced a financial loss.

• In June 2021, FINRA announced that it had fined Robinhood $57 million, and ordered it to pay approximately $12.6 million to thousands of customers who suffered “significant harm” at the hands of the brokerage. FINRA said millions of customers had received false or misleading information from Robinhood, and millions were affected by system outages during the March 2020 market volatility. What’s more, FINRA found that algorithmic bots had approved thousands of customers for options trading, even if those users weren’t eligible or had red flags in their account that would have prevented them from taking part in the advanced trading strategy. The $70 million total marked the largest financial penalty ever levied by FINRA.

• In Jan. 2021, the app came under fire for its decision to restrict trading during the extreme market volatility surrounding GameStop and other heavily shorted stocks. And while the market conditions led other brokerages to take precautions, Robinhood’s restrictions were more expansive. The brokerage has since beefed up its capital holdings, compliance and risk management procedures and customer support team in an effort to make sure these extraordinary restrictions aren't necessary in the future.

• In Dec. 2020, Robinhood was charged by the SEC for misleading customers. The SEC found that “Robinhood customers’ orders were executed at prices that were inferior to other brokers’ prices,” and that in aggregate, those inferior prices deprived customers of $34.1 million, even after accounting for savings from Robinhood’s commission-free trade offering. Robinhood agreed to pay $65 million to settle the charges.

• Also in Dec. 2020, the Commonwealth of Massachusetts accused Robinhood of aggressively attracting inexperienced investors to its platform and using gamification techniques to manipulate customers. The complaint also stated that many Robinhood users were given access to advanced — and risky — options trading products, even when they identified as having no or limited investment experience. In Aug. 2020, Robinhood announced plans to hire hundreds of new customer support representatives.

» Learn more about alternatives to Robinhood

Is Robinhood right for you?