Robin Hood is a hero of legend who robbed from the rich and gave to the poor. The app that bears his name isn’t stealing from anyone, but it operates under the same principle. Robinhood is a trading platform that seeks to level the playing field by giving everyone access to high-quality investment tools in the palm of their hand.
What is Robinhood?
Founded in 2013, Robinhood was something of a trendsetter in the mobile trading space. It was one of the first trading platforms to offer commission-free trades, but that has become more mainstream in the industry. Although its main perk is now widespread, Robinhood still offers a flexible, easy-to-use platform that is a great pick for plenty of investors.
Robinhood still offers commission-free trades, zero fees, and no account minimums. The platform is designed to help you build your nest egg, and doesn’t charge you a thing unless you opt into Robinhood Gold. The premium membership costs $5 per month and gives you access to pro research and market data. You can try the tool for one month free – it makes Robinhood more powerful for serious investors.
Plus, Robinhood makes investing more accessible by offering fractional shares. One share of Amazon costs upwards of $3,200, meaning almost no ordinary American is able to invest in one of the countries biggest companies. Fractional shares make it possible, as you can invest in fragments of stock and build up over time. It’s a bit like buying cryptocurrency, which you can buy in full coins or fragments. Oh, and Robinhood offers crypto trading too!
Robinhood is available for any U.S. citizen, aged 18 or older, with a valid address and social security number.
Is Robinhood Worth Using?
Robinhood’s main draw is its simplicity. The app is designed to make investing understandable and easy for everyone. In this, it succeeds. Robinhood is a great app for beginner investors – registering takes minutes, trades take a few clicks, and you can monitor stock prices through the app.
However, since Robinhood is designed to be used for beginners, experts might find it a bit too basic. Robinhood Gold offers high-quality research to pair with the platform, but Robinhood still lacks the premium tools of competitors. For instance, you can’t trade futures or bonds, short stocks, or access retirement funds.
It’s also worth noting that Robinhood has experienced some significant technical issues. In late February and early March 2020, Robinhood suffered outages amid significant market volatility caused by the outbreak of the pandemic. Many users were unable to access their portfolios during a crucial financial moment.
However, Robinhood is a strong introductory trading app, especially for younger users with less of an eye on retirement. It was an industry leader when it was one of the only platforms offering commission-free trades, but most competitors have caught up. Still, Robinhood’s streamlined platform, ease of use, and crypto trading options make it a viable trading app.
Plus, new users get a free stock just for signing up!
The Bottom Line
Robinhood‘s simplicity is one of its greatest strengths, but also a drawback. The platform is a great introduction to investing, and beginners will find the app’s layout and design very user-friendly. More experienced investors might find Robinhood a bit too streamlined, but the app is still useful to anyone looking to get into the market.