Robinhood Review 2022 – How It Works, Pros & Cons

Thanks to its minimalist interface and industry-lowest basic trading fees, Robinhood seems to provide new investors with a platform that is specifically created to lower the barriers to markets.

Research is one of the few features available on the basic (free) Robinhood platform. In actuality, the only research made available on the Robinhood app is only accessible to its premium Robinhood Gold subscribers who have access to Morningstar stock research reports. Robinhood is probably not the best option if you want to have access to stock research from several different companies. Similarly, you’ll need to look elsewhere if you’re looking for in-depth cryptocurrency research or resources for newcomers.

What Is Robinhood

The 2013-founded platform Robinhood makes trading in the stock market simple, perhaps even too simple, in the opinion of some regulators and experts. Furthermore, it does not provide tax-advantaged investment accounts, which are essential for creating lasting wealth.

The app aims to be “easy, friendly, and approachable” for its 21 million users and has over $102 billion in assets. According to a Robinhood spokesperson, the average age of its users is 31, and 50% of them are first-time investors.

Investors should be wary of Robinhood, despite the fact that its low fees and ease of use will undoubtedly draw users.

Although it still offers no-commission options trades as a key differentiator on trade costs, Robinhood is not quite as distinctive as it was when it was the major player offering no-cost trades on stocks and ETFs. Nevertheless, the broker can be useful for many investors who don’t require the extra features offered by rival brokers.

  • Free option trades are available in addition to free stock and ETF trades. The latter is something that the majority of competing brokers simply do not provide.
  • If you need more extensive research at Robinhood, you’ll probably want to cough up $5 a month for access to
  • You’ll also receive some helpful extra features, such as surprisingly affordable margin loans, Nasdaq Level II quotes, and more.
  • You’re out of luck if you want to open anything more than a straightforward taxable account here. Therefore, no IRA, SEP IRA, or joint accounts. To grow with the broker is now significantly more difficult as a result of this.

Investors in need of better research should look at Fidelity and Schwab, as well as Merrill Edge and E-Trade. As a matter of fact, they all provide excellent education packages. If you need a reliable mobile trader, E-Trade and TD Ameritrade both offer quality apps.

Pros & Cons Of Robinhood


  • No account minimum
  • Fee-free platform
  • Streamlined interface
  • $0 account minimum
  • Cryptocurrency trading


  • No retirement accounts
  • Lack of educational resources
  • No mutual funds or bonds
  • Limited customer support
  • Lack of some diversified investing products

Robinhood History

In order to democratize investing and “provide everyone with access to the financial markets, not just the wealthy,” Robinhood was established in April 2013 by Vladimir Tenev and Baiju Bhatt.”

It was among the first companies to offer commission-free stock trading when its well-known trading app was released in March of 2015. When the app first launched, there were more than 800,000 people on the waitlist, including a large number of millennials drawn in by the removal of commission fees and the absence of a minimum balance requirement.

In 2018, Robinhood broadened its appeal by integrating cryptocurrencies into its trading platform. This time, Robinhood set the standard among traditional brokers by being one of the first to provide a simple way to purchase virtual currency without having to pay transaction fees.

Robinhood went public in 2021, becoming one of the most anticipated IPOs of the year, and is now traded under the ticker HOOD.

How To Open An Account With Robinhood

1. Look into the apps and platforms for discount brokerages. If you’re looking for a cheap way to start trading, do your research and compare various discount brokerage platforms first. What categories of investments, services, and goods do they provide?

2. Compare fees. See if there are any account maintenance fees, minimums to open an account, or other costs in addition to commission trading fees. If you intend to invest in any stock or fund, take into account the expense ratio.

3. Use the Robinhood app to submit an application. You will have to provide personal information, including your tax ID and financial information. You’ll get an email within a few days either approving your application or asking for more details. The process could take an additional five to seven days if Robinhood needs to confirm your identity.

You can choose to load your initial deposit in advance during the application process. That way, the funds will be available when your application is approved.

Does Robinhood Fit Your Needs?

So, is Robinhood good? Well, it might be appealing to novice investors who don’t have much money to invest. It’s a cheap way to get started in the stock market because there are no trading or commission fees, account minimums, or account maintenance fees.

But because investing is gamified in the app, it’s too simple to make quick and frequent trades. A November 2020 study by behavioral finance specialists found that Robinhood users traded nine times more frequently than users of other low-cost brokerages like E*Trade. Other studies have demonstrated that buying and holding investments, also known as passive investing, has a longer-term wealth-building effect than active trading. As a result, Robinhood’s simplicity of use may actually work against you.

Robinhood is a good option if you value a user-friendly mobile interface, a trading platform that is easy to use, or the ability to trade cryptocurrencies. But now that many online brokers have joined Robinhood in doing away with commissions, inexperienced investors can afford to look around for the broker that best suits them.

Robinhood Commissions And Fees

The industry was revolutionized when Robinhood became the first significant brokerage platform to do away with commissions on trading stocks and options. The norm today is commission-free trading of stocks and exchange-traded funds (ETFs).

To access a margin account with $1,000 in margin credit, research materials, and other features, customers must subscribe to Robinhood Gold for at least $5 per month. Customers can make larger deposits and get quicker access to their money with Robinhood Gold.

A very competitive 2.5% annual interest rate, calculated daily and applied to the customer’s account at the conclusion of each monthly billing cycle, is applied to any margin above $1,000.

For directing orders to third-party market makers in exchange for a fee, Robinhood is compensated for order flow. These third parties might or might not be able to offer quicker trades or better prices. However, some business professionals are against this practice because Robinhood receives payment whether or not they increase order speed and price for their customers.

Robinhood Customer Service And Security

The customer service at Robinhood is a little lacking. Both an online chat option and a phone number for customer service are not displayed. To ask Robinhood for a callback, customers must be logged into their accounts. Despite the fairly comprehensive FAQ support page, which may be able to help you with your inquiries, investors who are concerned may find it difficult to cope with the lack of simple direct customer support.

Nevertheless, Robinhood provides justifications for having faith in their security. The BCrypt hashing algorithm, which is widely used, is used to hash your account password, which is never kept in plaintext. The mobile app also provides two-factor authentication via SMS or an external authenticator app, as well as secure access using TouchID, FaceID, or a PIN code.

Your invested funds are safe because Robinhood belongs to SIPC, which insures client securities valued up to $500,000 (including $250,000 in cash) held by its members. If you’re considering investing in cryptocurrency, keep in mind that Robinhood Crypto is not a member of FINRA or SIPC and that investments made through Robinhood Crypto are not covered by SIPC.

Is Robinhood A Good Option For Beginners?

Robinhood makes it simple for novice investors to get started. No commission costs or minimums are required to open an account. However, tax-advantaged investment accounts like the Roth IRA, which are unavailable on Robinhood, and a buy-and-hold approach to maximize compound interest, which goes against Robinhood’s incentives to trade frequently, stand to benefit younger investors the most.

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