Last Updated on May 25, Robert Farrington 60 Comments We may receive compensation from affiliate links in this article.

Robinhood is one of the newest and hottest brokerage firms that started in the last year. It recently came out of beta and is accepting individuals to join it's commission-free trading firm. But as a customer and investor, is it's commission-free trading platform worth it? Should you give it a try as an investor? I've been using it for the past month and a half, and here are my honest thoughts on Robinhood.

If you want to skip the review, the bottom line is that there are better free alternatives for long term investors. They are a better solution because they offer many more tools and resources for the long term.

And they both have great apps. Even if you sign up on their website at Robinhood. I followed the link and got started. After creating an account you must download the app from the App Store. Everything for Robinhood is done via the app:. After you login with your information, it asks you to create a Watchlist. I didn't really understand what was even happening at this point — I seriously just entered my login information and it started populating a Watchlist. I wish it didn't do that and you don't have a choice to skip it that I saw , but here is the screen:.

The next screen asks if you want Smart Notifications for the app. I opted out of this because I hate notifications on my iPhone. I'm sure others will find this feature useful though:. The next screen asks you to fund your account. Out of every app I have ever used, this has been the most intuitive part of the process. I find linking bank accounts can be a challenge, even on a desktop computer, but Robinhood made this easy:. Once your account is funded, you'll receive a confirmation email and an alert on the iPhone app.

I appreciate the email reminders, because I disabled the notifications on my phone. Here's what your account screen looks like:. However, before I could do anything else, Robinhood once again asked me to setup a bunch of investment objectives. I didn't really understand the purpose of these, as they don't seem to have any software or help to customize a portfolio or trade. Now that you have your account funded, you can start using the Robinhood App to look up and trade stocks.

They have some very elegant ways to look up stock information. Here's what I started with, looking up Abbott Labs. First, I searched for the symbol:. Once you look up the stock symbol, it gives you a quote, basic chart, and other basic information about the stock. This is all trading information — they don't have any fundamental information about the company:. While I don't like to base my investment decision on what others are doing, a little voyeurism is always fun:.

When I went to make my first trade, I thought I'd keep it simple and just invest in SPY. So, I typed in the symbol for SPY and got a quote:.

It's very intuitive and easy to use to place an order. You simply type in the shares you want to buy and the price. After that, you review your order:.

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Then, you just swipe up to submit. Personally, I hate having to swipe to access features on a phone. Just let me push a button. Here's where it gets tricky. The pricing for all of this is pretty high in my opinion. Of course, this is always subject to change and please let us know in the comments if it does change:.

I'm always leery when I see a company offering something for nothing. This company isn't a non-profit. But, in order to do so, they need to make money, so how do they do it? They have two models. First, they don't pay you interest on any money left in your account. Rather, they collect the interest on that money and keep it for themselves. They also charge interest on margin for accounts that choose to trade on margin.

Second, they have a longer-term plan to offer an API for their system and charge for access. This is likely to be the bigger money earning source, but doesn't really impact individual investors. I don't see Robinhood as the replacement for anything. I see them as a novelty. I found the app okay to use, not great. Robinhood also doesn't provide support for Quicken or Mint yet, so you can't track your holdings outside the app.

This is pretty frustrating given that people with multiple accounts rely on other services to stay financially organized. If you trade frequently, the app may be handy, but the research features are too basic to be of any use.

Furthermore, I can't image trading from a phone. My final thought is that Robinhood is going to be a novelty that we don't hear about in years. They attracted a lot of buzz on social media last year with their free trades, but after using their service, I was pretty disappointed. I also don't see where the larger market is going to come for this product, if financial product enthusiasts can't get behind it. Finally, I worry about the money flow. I can see prices rising or services disappearing in their future.

What most people don't realize is that you can open an IRA with no minimum, you can get access to hundreds of commission free ETFs, and you have a great app to use.

You essentially can build your entire diversified portfolio for free, on an app. Check out TD Ameritrade for yourself. Don't just take my word for it with this review, try Robinhood for free right here: Have you used Robinhood?

Did you like the experience? Are you going to replace your brokerage with it? Join 10, others who've taken our FREE video training program to learn how to get started investing today! Investing , Review Tagged With: Investing App , Robinhood. Robert Farrington is the founder and editor of The College Investor , a personal finance site dedicated to young adult and college student finances.

You can learn more about him here. January 26, at They can probably get away with not charging for trades by putting a money value on the information you provided. January 25, at 7: All in all, One has to remember the commission FREE means no outside perks aside from needing trade desk support which is fine in my book. The more perks offered the more a company needs to recoup from you the customer.

Do they keep the interest on your money YES. But what are you really making in interest in any given money market, savings or checking account? Do they have all the bells and whistles NO but guess what, thats ok. There are a ton of research websites that cost NOTHING. To make any profit with the AAPL example, one would need to drop several hundred. This is a GREAT tool to learn on. I for one have made a TON this year on CIG if you want numbers, I wait for the pull backs in the market, put a limit order and buy at your chosen price and your golden.

Quit whining and win in the market. May 29, at 4: Saying this company will disappear in years is even more foolish. This year alone the company was valued well over a billion dollars. May 29, at 3: You can honestly setup your portfolio for success at a full service brokerage for free as well.

May 29, at 6: May 29, at 9: February 5, at 7: Although I would prefer to trade from my workstation, the app is well designed and is fine for making occasional trades during the day. Trade executions have been excellent, NBBO as far as I can tell. As you mentioned, Robert, stock research and charting tools on the app are basically non-existent.

I can see how it might be cumbersome trying to manage a large portfolio from the app. Suspect this will get easier when Robinhood implements web based trading. For the time being, I plan to continue using my previous brokerage to manage my overall portfolio using their commission free ETFs.

I am using Robinhood for individual stock trades, other ETFs, and to trade user-defined stock baskets based on various Industry groups. It is these stock baskets, in particular, where commissions get prohibitively expensive using other brokers.

March 13, at 5: As far as the rest, how the heck does TD make money with commission free etfs? What about Schwabs intelligent investor which mandates large allocations to cash and is a total ripoff? If you have been in any startup let alone finance let alone a startup that deals in finance you would think twice before putting this company down.

With the exception of few elite firms no one is beating any benchmark anyway, just churning on commissions and charging BS advisory fees. March 15, at 3: My concern is two fold: Startups can be great, but this product needs to build on itself quite a bit to be successful. If they burn through their cash too fast, the people that started using them will be forced to go back to another broker anyway.

March 18, at This is a great way to help my kids become more active investors. It makes small regular funding of an investment account easy. I hope they help the big firms cut their fees. March 27, at 9: I have emailed them a number of times because I am anxious to get on this and try my hand at a couple trades, but CANT!

Of course, that is going to be the point since they are a lean, mean org.

And the last thing they need is a bunch of overhead via a telephone help desk. That is if they ever want to make money! Which they may not, now that I think about it.

But, I would love to have a full web page on my workstation to manipulate instead of just my phone too. Those are my gripes, but I am still anxious to get on it! April 14, at 6: I have been using Robinhood for two months now, and it has been great. While it may not be the best for managing an entire nest egg, it is a perfect way to get into the market and hold multiple positions without paying for every trade.

May 30, at 9: May 30, at August 26, at 8: I work for a financial research company and have all of the tools to manage a portfolio, conduct research, run hypothetical scenarios, but never had made the jump into investing because of the trade fees. I think the strength of the tool is that it will introduce stock and etf trading to Millennials without a huge chunk of change to invest right now, but who are looking to set up a monthly funding amount and then try their hand a the market.

Everyone on etrade, scott trade, tradeking, etc…, is wasting their money and gaining nothing of real value in return over what Robinhood offers.

Zach, you highlight that you use other tools to manage a portfolio and conduct research. September 17, at 9: I know millenials and a few lower income investors who use the app in conjunction with other research tools to keep their costs low.

I still use my TD account, but I have also been known to switch apps to get out of the fees. March 4, at 1: I think energy bottomed out already. I think commodities like copper will rise. I do wish I could use it on a browser though, or see more data on each stock.

December 28, at 6: Millennial also checking in. I love the fact that Robinhood makes it very simple to jump in the game. September 11, at 6: My oy drawback is they hold your profits for days after a trade. Too long compared to other brokerages. October 23, at 6: I really hope this succeeds.

I used it today for the first time and it seemed great. So what if it doesnt offer lots of research and tools? All that is available from millions of other places. And so what if it takes 3 days for money to settle? We need to support this. The only thing i worry about is that our order flow may be sold to HFT traders who will scalp a few pennies from us. April 11, at 2: Are you also using an iPhone?

As well as the quarterly earnings. Are those not considered as research items? November 2, at 4: This does help those with tight budgets. A general thought, does anyone have any other low cost trade,providers. Any other option out there? November 2, at 8: You can build a Motif with up to 30 stocks or ETFs. I love Motif for that reason. March 3, at 4: Keep in mind that like most brokerages they probably make a bit of money by being paid for order flow.

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August 29, at 2: I have been doing the exact same thing. Track portfolio on google finance portfolio and use charting software like tradingview free version. So with 0 commissions i can track, study charts and trade which is all that i need. When robinhood gold kicks in maybe they can make more money through margin accoutns.

April 14, at 7: Ive used Robinhood for almost a year now and have had absolutely no issues with this way of investing. I get my quarterly reports and all my tax documents are prepared and emailed.

They are very responsive on questions or issues. Dividends are deposited directly into my Robinhood account. April 16, at 8: Robinhood has cost me absolutely nothing. April 16, at 9: April 25, at 4: Hey Robert…why are you so anti Robinhood?

You seem to want to make everyone pay trading fees. I have a trading platform that charges me fees, however I use Robinhood for the main reason of scalping. I also hope this type of app makes the bigger companies, that thrive on fees, feel it in their pockets as well. I think Robinhood is a great way to have beginners, or traders who want to enjoy another side of the market, go about their business without having someone having their hand in their pocket every time they make any moves.

April 25, at 1: Free is nice — but you can get free at TD Ameritrade, Fidelity, etc. These platforms offer much more in terms of interface, usability, research, they have great apps, etc.

As such, my recommendations are around great platforms for investors. April 29, at 7: Another downside of the app is the fact that it has a built in system to discourage day trading. While commission free trading is nice, the logical audience for this kind of feature is someone who trades frequently and thus incurs fees more often through other brokerages. May 16, at 8: Here is the FAQ: July 6, at May 24, at 6: The absolute worst aspect imo is lack of customer service.

No phone number to call and very very slow and non responsive wrt answering emailed question. May 24, at June 1, at 7: I am a younger person that has been interested in trading a few stocks. The main attraction to me was no minimum balance and the zero trade.

From my limited point of view, this is a great way to get younger people that do not have thousands to throw around into the stock market. June 8, at June 20, at 5: I have been using it was available on Android as a beta. As this group becomes a larger portion of the total market traditional firms will start reacting but it may be too late. June 23, at 7: I would like to see a collaborative website but not a deal breaker.

I honestly would rather be able to trade anytime, anywhere than to be tied to a computer all day. Try the StockTracker app. You can link your RH account,buy and sell directly and get all the research you need.

For me the customer service with RH has been great. June 26, at 3: Then why would anyone else use this.? You can hear the gears slowly grinding. July 20, at 4: Been using Robinhood app for the past 2 months. Not a bad tool to get your feet wet if you are looking to try your hand at active trading. Definitely, need to use other resources for research. Lost money on this twice so I intend to switch to another brokerage soon. Unforgivable in my opinion. August 26, at 5: This is happened to me the first time I used it.

It was early morning pop and I got in just in time. Quick to press sell. August 19, at 8: Filled out all the usual info to start a Robinhood account and got an email back REQUIRING I UNFREEZE MY CREDIT SO THEY COULD CHECK IT.! Otherwise, no account they said. Supposedly they could not verify my identity with the social security I provided. What kind of SCAM IS ROBINHOOD PULLING?

Getting info to send you an unasked for credit card? August 20, at 9: Since money transfers typically take days, they are essentially loaning you the money until your transfer clears.

August 21, at I thought they offered either a cash account or a margin account? Not sure on this so looking for clarification. They loan you the money until your ACH transfer clears your bank.

That could explain the credit check. August 25, at 9: Your comments are precisely indicative of the problem with attempting to please millennials. If you want charts, use Google or Yahoo. Hey, maybe they even end up saving me so much on commissions that I open some other account with them. Your review misses the entire point s of investing wealth management, asset protection, financial gain , all things young folks who will be jumping from job to job will need help with.

Robinhood makes that easy. September 4, at 6: I am new to stocks and investing. I have a tiny budget in comparison to many others I have seen talked about , and am doing the research on my own. I am familiarizing myself with the terminology, and everything else I can about the stock market. It still sounds like a good introduction to trading.. Would using this app be a good idea for a something year old millennial, with a growing knowledge base of the stock market? September 4, at 9: Hi Emily, a few things.

Trading is not investing. This app is good for beginner investors, but not traders. So, if you want to invest buy and hold with a small amount, this is a good system. October 4, at Bluestacks is free and will allow you to use any app on your desktop.

I do agree, I want this connected to Mint. This is FREE, I see no strings attached. November 28, at 8: Robinhood is great for beginners who just want to learn the market basics or plop a few bucks down on some cows but it is lacking a bit in some essential features.

They are ripe for competition to step in and crush them IMO.

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Forgot to add…you can use Robinhood on a desktop using an android emulator. I like MEmu but there a handful of other ones. It acts as a mirrored android device and works just like any phone would. April 30, at 1: Well it has been a little over the 2 year period you set in your final thoughts! Personally I find it to be a great app. Given that they just got another large investment in their last round of fundraising I am hoping they will be around for at least 2 more years!

April 30, at 2: It will be interesting if they make it another 2 years without major changes. June 1, at 9: I have used Robinhood for quite some time. I recently tried to cash out and after 15 days my withdrawal says failed. The essentially are holding my money. I cannot get anyone to respond. DO NOT use this App. Your email address will not be published. Join 10, others who've taken control of their money and their future.

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Escape Student Loan Debt Start Investing Earn More Money Save More Money Forum. Robinhood Review — Are Commission Free Trades Worth It? Pros Commission Free Trades Sleek User Interface. Cons No Research Tools Clunky Tax Reporting And Statements No Desktop Option.

Want To Learn How To Invest? Comments Tim Seidler says January 26, at Thanks for sharing your insights — hopefully another firm does buy them.

They need a desktop computer platform. Millennial investor just getting his feet wet reporting in. This is a federal regulation, not a Robinhood only thing. Thanks for sharing your experience. What was your question by any chance? First off, free trading definitely catches your eye. Leave a Reply Cancel reply Your email address will not be published.

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