Robinhood Stock Review : Here’s What You Should Know!
When the concept of stock market came into existence, it was only limited to the wealthy. During the 1990s, you were required to call in and speak to a stockbroker on the phone to buy or sell shares. Moreover, there was a heavy fee for the privilege. But now, a lot has changed! Prices to buy and sell shares have dropped to around $5 per trade. But in case of Robinhood, it’s free. Why don’t we find out more in this Robinhood Stock review?
Table of Content
Robinhood Stock Review
What is Robinhood?
Formally called Robinhood Financial, LLC, the Robinhood app enables you to make stock trades for free. In order to access their services, you just have to install the app on your iPhone, iPad, Apple Watch or Android smartphone.
At the moment, Robinhood’s main target seems to be the general stock trades. However, soon it would roll out more advanced trades and security types. Currently, there is no support for OTC securities, warrants or mutual funds. Check out Common Stock vs Preferred Stock to know different types of stocks.
A press release last year stated, “Collectively, the community has saved over $22 million in trading commissions.”
Commissions and Fees
The company’s chief selling point is, “No Commissions!” and the promise to stand by it. The company has $0 trade commissions and no hidden fees. Generally, you might find brokers harass and fool you into paying extra charges and fees. But you will never experience this with Robinhood. They have no hidden charges and are straightforward about the fees they charge.
- Scheduled Deposits- A person can schedule automatic transfers on a weekly, monthly, or quarterly basis.
- Advanced Order Support- They have support for market orders, limit orders, stop limit orders and stop orders. During the entering period, some orders may be entered as “Good for the Day” or “Good till Canceled” (GTC).
- Robinhood Instant– It gives you an instant access to deposits (under $1,000) and direct access to your funds after selling your stocks. They have removed the waiting period of three business days as is the case with regular brokers.
- Robinhood Gold (New)- The new features give you: after-hours trading, a line of credit, and larger amounts of instant deposits.
How does Robinhood run their business?
If the trades are free and there are no hidden costs, then how is Robinhood running their business? According to Robinhood, they are making money through margin lending interest and interest on any un-invested customer cash deposits.
You can complete the sign-up process once you download it on your iOS or Android device. Then they will ask for your personal information like Social Security number. This is the typical information every other broker asks for.
After gaining access, the user interface has a simplistic approach and easy to use. Everything related to trading and funding happens within the app, including linking your bank account. If you are looking forward to buy Preferred Stocks, then do you know How To Buy Preferred Stock?
- Free trades- There is no trade fee whatsoever! Robinhood stands by its promise.
- Simple usage- The sign-up process is easy and the user interface is simple and takes no time to master.
- Stock and ETF Trading only- For the time being, the trading options exclude OTC securities, warrants and mutual funds.
- No retirement accounts- The app currently supports individual taxable accounts only. Thus, no joint or custodial accounts are available yet.
- No ACAT Transfers- Robinhood has not introduced a way to transfer existing brokerage assets into itself, yet.
Robinhood’s free trade policy is sure to win hearts. Each dollar saved will only add up in the interest earned. Moreover, its simplistic and easy app user interface is a great way to attract people.
There are few niggles but those can surely be traded for the “free trade” Robinhood is offering. Check out the app if you want to enter the game of trading. If for some reason stock market doesn’t pique your interest, you can invest your money, nevertheless. Here are The 7 Best Short-Term Investment Plans For You!