Introducing Robinhood Review
Robinhood has come a long way since 2013. In 2021, Robinhood had 22.5 million active users. The app has gone from strength to strength with its mobile approach to stock trading. It’s easy to use, with an application that even novice traders can understand in minutes.
The platform uses a low-fee structure and offers cryptocurrencies and fractional shares alongside common stocks. Its cash management and recurring investment features are also outstanding to help beginners in the world of stock trading.
To learn more about the platform, keep reading our Robinhood review and decide if it’s right for you.
What is Robinhood?
The Robinhood story started in 2013 and was created by the team of Vladimir Tenev and Baiju Bhatt. The latter already boasted of having built high-frequency trading platforms for some of New York’s largest institutions.
The name comes from the company’s vision to provide access to financial markets for everyone, not just the rich and powerful. The democratization of financial markets and continued accessibility has been a cornerstone of recent years, and Robinhood is one of the most prominent examples.
Although some seasoned traders argue that Robinhood is too simplistic and does not provide investors with the necessary tools and training, the platform was never intended to be anything more than an easy way to trade.
New customers who sign up for Robinhood can start trading with as little as $1, with trading fees and commissions measured in cents.
Features of Robinhood
At Modest Money, we believe Robinhood has played an important role in getting brokers to lower their costs and make it easier to enter the markets. Our Robinhood review believes that by removing many barriers to entry, a whole new generation of people can start building their financial future.
The core of what makes Robinhood so popular is its ease of use. The streamlined interface lends itself well to basic investing. Although executing complex trading strategies effectively is always difficult, Robinhood was never designed for it.
The streamlined interface is exceptionally convenient and a great introduction to stock trading.
Free Crypto Trade
Another revolutionary feature is the ability to trade cryptocurrencies for free. It remains one of the few brokers that allows crypto trading without excessive fees. Among brokerages, this is a standout feature.
Access to IPO
Investing in IPOs has traditionally been the exclusive arena of large financial institutions. Robinhood is allowing limited access to IPOs for users on its platform starting in 2021. Most brokerages do not offer any access to IPOs, so this is a significant boon for investors looking to settle in early.
Although you still won’t find the advanced features common to many brokerages, Robinhood has increased the number of search options on the site.
Earnings calendars, analyst notes and a real-time list of the biggest stock moves are all new additions to Robinhood.
Robinhood builds its data ecosystem by harvesting data from other users, such as the platform’s 100 most popular stocks. They also have a news feed with several reputable sources, such as Reuters, The Wall Street Journal, and Barron’s.
Cash management account
Robinhood offers its customers a cash management account that pays a prevailing interest rate of 0.30%. The account also includes a debit card and the ability to withdraw cash for free at over 75,000 ATMs across the country.
Due to Robinhood’s contracts with many high street banks, $1.25 million in FDIC Insurance is included.
Robinhood is a completely free stock trading platform. You can start buying stocks with as little as $1 on your phone. The only current subscription is Robinhood Gold.
The Gold service allows investors to trade on margin to amplify their profits. It only costs $5 a month to get started.
All stock trades are commission-free and Robinhood offers fee-free trading options. The use of the margin comes with an interest rate of 2.5%.
Amazingly, there are also no transfer fees on domestic or international transfers. Robinhood makes most of its money from margin fees, check fees, and live brokerage fees.
Account transfer fee is $75.
If you have any questions about how Robinhood works, here are answers to some of the most common questions.
How much is my free stock worth?
Each new customer receives a random free stock. You have a 98% chance of receiving a share worth between $2.50 and $10 per share. However, some lucky customers may receive stock worth up to $200 upon purchase.
Is Robinhood legit?
Despite controversies throughout its life, Robinhood is a legit stock trading platform. It is registered with the SEC and must follow the same rules and regulations as traditional brokerages.
How much margin can I get?
It depends on the size of your account. All Robinhood Gold subscribers receive $1,000 free margin. Any margin above this rate incurs 2.5% interest charges, making it relatively low compared to the rest of the industry.
Is Robinhood for you?
Our Robinhood review thinks it’s a great introductory option if you’ve never traded stocks before. It has breakthrough features and in many ways remains an industry disruptor. The platform’s simplicity, low-cost approach, and free crypto trading make it a remarkable site.
Where it falls is the lack of advanced features and a limited range of investment options. Despite that, if you’re looking for a place to start building your financial future, this is the platform to start with.
Create an account with Robinhood and get your free stock worth up to $200 now.