Robinhood App Review: Free Stock Trades With No Catch?


Updated review in August 2015 to include new Android app, new order types, and more.

Fintech start-up Robinhood wants to “democratize the financial markets” by creating a mobile-first brokerage that offers unlimited free trades with no minimum balance requirement. That is a pretty bold move, and I was skeptical when they started getting noticed in late 2013.

I started out as a beta user in mid-2014 with their beautiful but manually-installed iPhone app. They officially opened to the public in March 2015. As of August 2015, they have both an Apple iOS (and Apple Watch) and Android app and have processed over 2 million free trades. Here’s my updated review based on my experiences with them.

Application process. You must provide your personal information including Social Security number, net worth, income, investing experience, etc. This is the same as any other brokerage firm, but this may also be the first such account for many users. Everything was done online; there were no paper documents that required mailing or faxing.

Core features.

  • Yes, the app really gives me $0 commission trades with no minimum balance requirement. That means you could open account, put in five bucks, and buy a single share of Zynga (ZNGA) if you wanted to (maybe two on a bad day…).
  • Robinhood now supports market orders, limit orders, stop limit orders, and stop orders. Certain orders may be entered as good for the day or good till canceled (GTC).
  • You can open an individual cash or margin account.
  • Customer service is best through their e-mail, but they have added a phone number now during market hours (9:30am – 4:00pm EST) at (650) 940-2700.

Along with all the other legit brokerage firms, Robinhood Financial is a member of the SIPC which protects the securities in your account up to $500,000. Data is encrypted with SSL. Apex is their clearing firm.

Funds transfers. You can manually link any bank account with your routing number and account number, but you can also directly use your username and password at these banks: Chase, Bank of America, Citibank, Wells Fargo, U.S. Bank, Charles Schwab, PNC, Silicon Vally Bank, and USAA. ACH transfers are free and take approximately 3 business days (same as other brokerages).

Robinhood recently added an automatic deposits feature where you can schedule ACH transfers on a weekly, biweekly, monthly, or quarterly basis.

What’s missing? Getting free trades is great, but I think it’s also important to know what you won’t get, at least right now:

  • You must access your account via a mobile Apple iOS or Android device (iPhone, iPad, iPod Touch, Android phone, Android tablet). Web interface is “coming in 2015”.
  • Broker-assisted phone trades are $10 each, according to their fee schedule.
  • Electronic statements are the default. I don’t even see an option to enable paper statements in the app, but according to their fee schedule paper statements cost $5 a pop.
  • As of August 2015, Robinhood does not support ACAT transfers, so you can’t move over your existing assets from an outside brokerage. (Or move out your assets via ACAT either, I’m guessing.)

How do they make money? For now, Robinhood will make money the same way other brokers do: collect interest on your idle cash, charge you interest for margin loans, and sell order flow. The most innovative prospect is to the plan to sell API access to other financial apps.

The fact that Robinhood sells order flow may leave you with a slightly worse execution price as compared to other brokers with more complex order routing. If you are making large value trades, then this small percentage difference may add up to something significant that matters more than commission price. With my tiny order volume, I am fine with them selling my order flow if they are giving me commission-free trades.

User interface. Over the last 10 years, I’ve opened an account at the majority of the “discount” brokerage firms. I’ve had $0 trades before, along with $2 trades, $2.50 trades, $4.95 trades and so on. What makes Robinhood special is their modern, app-centric approach. I agree with this quote from Wired:

But the app’s simplicity is meant to be about more than style. Ease of access and understanding is meant to make Robinhood compulsively engaging for a new generation of investors that don’t find the stock market very accessible from the mobile screens at the center of their lives.

Even though I don’t trade frequently, I still check the app all the time. More often than my primary Vanguard account. Why? Because it’s so easy. One tap on the Robinhood app logo, and either a quick 4-digit PIN or thumbprint with a newer iPhone. It’s a pet peeve of mine to have to type in a 16-character password on a tiny keyboard just to check a balance. I think other finance apps can learn a lot from Robinhood in this respect. I think only Mint and Robinhood support Touch ID on my phone.


robin1 robin2

robin3 robin4

Recap. Robinhood delivers on their free stock trades with no minimum balance promise. The app-only user interface is clean and intuitive. Customer service is a bit lean, but my requests were responded to within a day or so. They continue to make incremental improvements every month. I’m still skeptical about whether they can make the economics work over the long run, but they do appear to be streamlining wherever they can.

More: Fee Schedule, Official FAQ, Techcrunch, Buzzfeed


  1. I like the idea for newer, casual investors who want to just put some money to work in the market. A lot of newer investors find it hard to make money paying $7~ commissions both ways ($14~ total) to make an investment in just one stock. If you start with $1,000 and diversify to just a handful of companies you could easily be down 10% just from paying commissions.

    • True.

      Sorry to be sounding preachy. I feel one shouldn’t be trading stocks with that much money. Buy and hold (stock or an ETF) would make more sense.

      • Biggest reason that makes sense however is because of fees. There’s no reason not to play with small amounts when fees are gone.

  2. B of A gives 30 free trades per month if you have 50k with them. The mobile experience sucks though.

  3. On “How do they make money” – one more source is lending stocks (many ETFs do that too).

  4. I don’t think they do this, but ask anyway: do they have options to select a specific lots to sell like Etrade?
    Anyone know which one do besides etrade?

  5. I got approved as well. But until they add options, I will stick with Interactive Brokers. Hopefully, I will make the transition in 2015. Does anyone know about their margin account? I was never asked during the account setup process. Also, what is the margin they give you? In Interactive Brokers I get 1:4. For instance, if you have $100,000 in your account, your buying power is $400,000.

  6. Checking FINRA shows an address and phone # that Robinhood Financial LLC used to file, but probly not their customer service. Dont forget the company also makes money on buy/sell order flow or bid/ask spread, reimbursements or incentives from exchanges for providing them trading volumes, possibly etf firms, and from the fees on their schedule,.
    Does this company have any Windows PC’s? (It looks like they have Apple computers only; maybe that’s why launch began with Apple iPhone,iPads,ipad touch.) Hey Jonathan, can you email them for their margin rates and post’em, since youre an account holder?

  7. So, looks like we have to wait a little longer until we can really use this brokerage. ACAT is also a must. That’s the only way I would transfer my 3 existing accounts from Interactive Brokers. Does anyone know if they are planning to support Roth IRA type of accounts?

  8. It looks like they are starting release more user. But the entire waiting list is not that big yet. The old style brokerage still dominate.

  9. just got approved. waited almost a year (no referrals).
    was at about 50K this past Monday.
    and this morning was at 33K.

  10. iOS only FAIL! I only own Android devices and got an unsolicited invite today here is the refer a friend they gave me for not paying the Apple tax.

  11. For those still waiting, you can try one of these links below. I signed up this morning, and got 3 referral codes that let people jump the line and sign-up right away with no waiting. Each link will only work once.

  12. I’ve never bought stocks, so bear with me. With this, would I be able to buy x number of shares of say, Google, stock, then decide to sell it sometime down the line, and have no fees throughout the process?

    Say I buy one share at $511. Then it goes up to $600 and I sell it. Do I get “handed” (transferred into my bank account, sent a check, etc) $600 at that point?

    Thanks for any info.

    • Brent, first you transfer money into the account from your bank account. Then you can buy & sell stock with $0 commission / fees. And yes, when you are done, you can just transfer the current balance out of your Robinhood account back to your bank account.

      • Awesome! Thanks. Guess I’m gonna have to go find my wife’s old iphone.

        • Hi Brent,
          Di you try it yet? did u make any progress? i am also new to this market and trying to get some experience from you.

          • Gaurav

            I am using this since January 2015
            It’s nice , but no bells and whistle like fee base trading broker firm.
            But hey who cares when it’s free , at least small guy like me 😉


  13. Gil Meriken says:

    Does anyone know if you can open an IRA account with them?

    • When I registered my account there was no way to pick the account type, like margin, IRA, Roth IRA, etc. So, I guess at this point this is a regular individual cash brokerage account. Margin account types will appear next as they are eager to make money on margin loans. Then probably IRA. ACAT is not available yet, but it is coming some time next year. Like I said, I am looking to transfer all 3 of my accounts from Interactive Brokers where I pay $1 per trade. I wish Robinhood was around when I first started my investment business almost 11 years ago. I have spent around $50,000 on commissions. I remember I paid $10 per trade with my first broker TD Ameritrade. Sounds crazy now.

  14. Austin Miller says:

    I have been using Robinhood for about a week now and its been a great experience, I loved it, however all of a sudden today everything went wrong. I noticed that there was money missing from my account. I looked at my total transfer history and the amount of stocks i own, I bought one share of a single company earlier in the week, proving that some of my money had disappeared. I have emailed Robinhood and they have not yet responded to me. Also before I found out about the money missing i had been trying to acquire more stock. Every time i made an attempt to buy it would give me an error that my account can only close positions. This doesn’t make any sense, I have more than enough money to buy the stock I attempted to buy with excess funds left over. I don’t know nor understand what Robinhood is doing. There was no notice or reason why any of this happened I just didn’t know what to do.

    • I have the same error! Robinhood needs to do something about this fast, or give me my money back without a fee.

      • Austin Miller says:

        I’m getting really angry with every passing day they don’t respond to me about the issue. I’m gonna hit a point where i just can’t wait anymore and I’m going to just call the SEC cause they aren’t even talking to me about it I’m completely in the dark. It’s as if they don’t care, like the whole thing is a scam. I don’t want to think robinhood is a scam but the longer I go without my money returning the more the idea crosses my mind. I think they should hold back giving out new invitations and making new accounts to take care of important issues the current accounts are having they clearly cannot handle everything.

        • This is really scary. I was hoping to transfer all my accounts to Robinhood in 2015. Your problem with not being able to “buy” is pretty simple I think. You are only allowed 3 day trades in a 5 day period. If you make a fourth day trade, you get flagged and you can only do transactions to close your positions. Hence, you cannot buy anything new. I would love to hear from Jonathan and see what his experience has been over the last few weeks. You experience with missing money sounds horrible. But on the other hand there are a lot of happy customers from the posts I see on Facebook.

  15. Paul Taylor says:

    I got an invite, signed up and my account has been “Pending” ever since. Their FAQ says that normally only takes 24 hours, but it’s been about a week now. After a few days of waiting, I opened a ticket using their ticketing system, but here I am about 4 days later with no reply other than ones that look automated. They appear to be having growing pains. I hope they can get everything straightened out soon.

    • Paul Taylor says:

      Got an email back from them this morning. I lifted my credit freeze and supplied a picture of my drivers license and a completed W9 form, so hopefully I’ll have my account soon.

  16. Mo Karney says:

    One thing that concerns is that I’ve had nearly $10k in my account and none of it is in stock currently. It is sitting as cash yet I am unable to withdraw it for the past week. Somewhat sketch. No customer service either. AVOID AVOID AVOID.

    • Thats because there is a SEC rule that you cannot withdraw your money for certain days because of money laundering. you can read more about the rule.

  17. I am using the app and Apple shares without paying commission. Other drawback is it takes 3 days to transfer money from my BOA.

  18. One major drawback is that it does not allow me to trade after hours. Most if not all Companies report earnings pre or after market. Are you guys able to trade pre or after market?

  19. I use BofA and get 30 commission free trades a month (all my combined accounts, trading, checking, etc, qualifies me). Their brokerage is through Merrill Lynch who they merged with. From everything I’m reading about Robinhood, there’s a limit on # of trades/week (3?) and lack of customer service contact, which makes this a really iffy proposition. I might feel differently if I was paying for my transactions. I’m not confident in Robinhood being able to carry out my transactions as quickly as a larger brokerage like MLynch and reading a few comments about missing or inaccessible funds with lack of customer support, which makes me hesitant on accepting the invite I got. I can see the value in Robinhood though. It really is useful for the newbie investor, with limited funds, whose just stepping into the big shark infested stock market pool.

    • There are no trade limits per week on cash accounts. 3 per 5 days is for RH Margin accounts. See their twitter:

    • DYu, you are correct. There are a lot of limitations with Robinhood as of right now, such as:
      No margin accounts
      No options
      No ACAT
      No IRA accounts
      They are working on implementing those things. Once they are available, Robinhood will be the only brokerage you need.
      The 3 trades per week problem you mentioned will be resolved once margin accounts are allowed. That’s why I put it at the top of my list.

  20. Stopped filling out sign-in form when I was asked to enter my bank account log-in information. Robinhood has no need for this.

    • Paul Taylor says:

      While a little paranoia is a very good thing when it involves your banking accounts, this is simply a way to instantly validate that it’s actually your account. You don’t have to fund it that way, though if you don’t mind waiting a few days. You can add a bank account via the routing and account numbers and they’ll make two small deposits within a few days. Then, validate that account by telling them the amounts they deposited, and that account will be eligible for transfers. If you are paranoid (like I was), log into your bank account right after the verification process and change your password.

    • Marc Fine says:

      Giving your login info for a bank account is standard procedure now. They only need it once to verify you actually own the account. Change the password before you give them your credentials. After they verify the account, change it back to original password…

      • Giving a LOGIN is NOT standard procedure now and saying so is incredibly misleading. Giving a routing number and bank account number is standard procedure. The moment I saw that they asked for this without giving an option of just providing bank account and routing number is when I backed away. My bank account log on password is tied to many different accounts and changing it complicates a lot of my other financial accounts. And my bank (Wells Fargo) does not let you change it and then go back to the one you had before. You can’t do that. So no – it is not a good thing to ask for this info nor would I ever consider giving it to any online app. I’m stunned people don’t realize this.

        • Paul Taylor says:

          It’s becoming more and more common. I believe I’ve seen this a couple times in the last year or so with other bank accounts I’ve opened. Don’t recall which ones though. When you say your login is “tied to many different accounts”, I’m not sure if you mean that you use the same password for multiple accounts, but if that’s the case, you should really use a password manager app, like 1Password and have a unique password for every financial login.

  21. For priority sign up, use my referral link.
    It would help me too. Thanks!

  22. Found this link on the website. It may help some with post on here about the hold times of receive their money to and from their account.

  23. Stevan Youngs says:

    Android Fail?… Are you kidding me? This is a GREAT app, and the fact it runs on Apple is a large part of the reason.

    Android is a NIGHTMARE for developers because of its fragmented nature: there are hundreds of different hardware variants and trying to get your app working with anything but a small subset of these cripples small developers.

    Also Android is riddled with malware. I wouldn’t trust the contents of a piggy- bank to an Android device, let alone my Stock portfolio.

    And finally, Android is Google’s mechanism for tracking your every move. We all know why.

    Apple’s not interested in your data and deliberately designs its systems not to collect data about you. I value their approach.

  24. How do you set up account with beneficiary?

  25. I waited for over a month for approval. I sent passport and SS Number, still no go. Then got an email that I can put money in but won’t be able to withdraw back to my bank. What a joke.

  26. Does anyone know if Etrade or other online brokers can transfer our funds and made them available on the same day?

  27. How to set up beneficiaries for the account?

  28. If I buy stock through Robinhood today, and they go out of business, what happens to my stock and my ability to sell it? (sorry if this is a stupid question. I’ve never dealt with stocks/investing/trading before.)

    • Robinhood is regulated heavily like any other brokerage like E*Trade or TD Ameritrade. If any brokerage goes out of business, the assets are usually simply sold and/or transferred to another registered firm. Client assets are always kept separate from the assets of the brokerage itself. Apex is the clearing firm for Robinhood, as well as several other discount brokerages.

  29. SInce I am not an US citizen, I cannot use the app (I presume), but I love the idea of getting more and more investing opportunities for those interested. The more options there are, the more chances for people like us to be able to make money via investing.

  30. My major complaint about Robinhood is how long it takes for funds to clear/settle funds after making a trade, which is generally 3 days.

    Most brokers take just as long, but the key difference is that Robinhood does not allow you to trade/access any of those funds until the trade has fully settled. That’s an eternity compared to instant funds availability with regular brokers, like TD. I honestly would trade more often/use Robinhood more often if I didn’t have to wait 3 days to settle. I have found Robinhood to be good for small, purely speculative trades, but would make many more if the above was addressed.

  31. Saw this on Reddit… Might be of interest to some:

    “This is a simple fix for the poor info that Robinhood gives.
    Download an app called Stock Tracker and upgrade to the Pro Version.
    This allows you to view your portfolio, make real-time watch lists, screen stocks and heavy movers, and actually ties in with Robinhood to make trades through the app itself. You get real time prices and pretty nice graphs and tech indicators and basic fundamentals (vol, pe, Etc.)”

  32. I have been using Robinhood since March 2015 and have no problem. Except I want to be able to use my funds from sale and transfers immediately to be able to maximize my gains!!!

  33. Thanks, Jonathan. My transferred funds are now immediately available as buying power!!!

  34. How do you go about requesting to get in on the beta phase of margin accounts? I’d like a margin account but don’t see any options in the app regarding requesting it.

Speak Your Mind