Robinhood 2022 And Beyond Has Focus on Long-Term Commission-Free Investing For Newbies And Seasoned Investors Alike

12 min read

In a world of dozens upon dozens of brokerage firms fighting for your business and promoting their own apps for investing, Robinhood has gathered well over 22,000,000 users through the beginning of 2022.

Let’s see if we can figure out what they’re doing right, what they’re doing wrong, and whether or not the Robinhood App is a good choice or not.

Be sure and read to the end to find out the final verdict, as well as some other alternatives to Robinhood if you decide it’s not for you.

Some Robinhood Good News

Are you an investor who likes the idea of commission-free transactions in stocks, options, ETFs, and cryptocurrencies? If you are, then the Robinhood app could be exactly what you’re looking for.

You’ll find there’s absolutely no minimum account size for investing. Very nice whether you’re just getting started or a seasoned pro.

Need a more expensive investment? Investors can easily borrow money from Robinhood Gold.

Younger investors and newbies like it because of its easy-to-use features. Since Robinhood was the first to offer commission-free trading to the general public, the company has been admired by some customers as a revolutionary in the investing world.

In addition, Robinhood’s mobile apps as well as their web applications are easy to use, straightforward, and have a short learning curve. Another plus? Registering for a new Robinhood account entitles you to one share of stock, absolutely free.

Any referrals coming from your referral link will also earn you a free share of the company’s stock for each one of your referrals who opens an account successfully.

Some Robinhood Bad News

If you have thoughts of opening an IRA, an education plan like a 529, or a custodial account like a UGMA account, there’s some bad news.

Robinhood only offers individual taxable brokerage accounts to married couples and other individuals who want to invest together.

Cash management accounts are also available, but if you want, or need, retirement plans, joint accounts, custodial accounts, and education plans then you’re out of luck. These types of accounts are not available from Robinhood. Due to this, it would be impossible for you to address all of your financial goals under Robinhood’s one roof.

What is the Robinhood story?

The company provides financial services from Menlo Park, California. Through the company’s mobile app and website, which are simple to use, you can invest in stocks, ETFs, options, and crypto at a low cost. There are currently 13 million users of Robinhood, and this number is growing.

After being roommates and attending classes together at Stanford, Baiju Bhatt and Vladimir Teneve worked together to create trading software for hedge funds.

They learned that the big Wall Street brokerage firms paid tiny commissions to trade stocks, while the average investor paid commissions on every single trade. After they founded Robinhood in April 2013, they premiered the app during LA Hacks in Spring of 2014. Their big idea? Bringing low-cost trading to the public, not just the wealthy. After a warm reception at LA Hacks, the app was released to the public in March of 2015. By the end of 2015 Robinhood succeeded in grabbing over 12% of market share from big-name firms like E*TRADE, TD Ameritrade, Scottrade, Schwab, Fidelity, and Edward Jones.

By 2020, Robinhood had surpassed all the big-name firms in market share of mobile apps for investing.

Who Should Use Robinhood?

Using the Robinhood app helps people establish long-term financial goals. Also, it gives new investors a much better grasp of stock market investing. Using the app, investors can easily purchase fractional shares and small amounts without jumping through any hoops. This means new investors can educate themselves about the market thanks to the low barrier to entry – remember, no account minimums – and the website’s incredibly easy-to-use interface. Robinhood’s company goal is to be the #1 investing platform for investors who are self-directed.

For those who want to hold investments with the flexibility to easily trade, this is a great platform to use. Robinhood’s core mission is to provide easy access to the stock market and encourage young people and new investors to explore investing. Even so, many experienced investors are drawn to the easy-to-use platform and other features.

What Are The Requirements To Open An Account With Robinhood?

Just like opening any other type of brokerage account, in order to open a new account with Robinhood, there are a few requirements:

  • Account holders must be at least 18 years old.
  • An active Social Security number is required.
  • The applicant must be a U.S. resident with a valid address.
  • An American citizen; or
  • A permanent resident; or
  • Your visa is valid to enter the United States

Top Features Of The Robinhood App

Robinhood makes investing easy, even for novices. Let’s briefly review each feature.

Easily accessible mobile app:

The mobile app is by far the most popular trading platform, despite the fact that Robinhood also offers a web-based interface for customers to buy and sell. The simplicity of the app makes it super easy to use, especially after you learn the icons and how each icon works. By shifting from one screen to another by simply clicking, you can easily check stock prices, keep tabs on different markets, and place buy or sell orders without ever leaving the application.

An easy-to-use search bar at the top of a stock’s page allows you easy access to any chart. The app is lightweight and fast, so you don’t have to wait long for charts to load. Quickly review how high and low the stock has been, the volume, its market capitalization, or the dividend yield. Everything you need in order to review details about your holdings or to make a decision about buying or selling is right at your fingertips.

You can enter an order to buy or sell at any time by using a trade button that floats on the screen with you as you scroll. The system will update and calculate your buying power based on the number of shares or options contracts you want to buy. Simply swipe up from the bottom of the screen to place your transaction.

And you’re not stuck with market orders only. Limit orders are also an option for all of your trades. Plus, you can quickly navigate to your portfolio, account value, or any number of other accounts management options in the app.

“But I can only afford a fifty-fifth of a share”

No problem. Say there’s a stock that’s selling for $55 per share. But even if you’re only starting with $1 to invest, you can use Robinhood to invest in that stock. You don’t have to buy a full share for $55, you can buy $1 worth or 1/55 of a share. No commission, no fees, so a diversified portfolio can be built without needing a load of capital. You can put 100 percent of your money to work starting from day one.

Trading in cryptocurrencies is now available:

For all you cryptocurrency enthusiasts out there, Robinhood now offers cryptocurrency trading on its trading platform. Whether you own Bitcoins (BTCs), Litecoins, or other cryptocurrencies or altcoins, you can now buy and sell on the same platform.

Managing cash flow:

Robinhood also offers a cash management account that allows account holders to earn interest on their uninvested funds, which fluctuates with current interest rates. Even better, just like Robinhood’s no-commission stock trading, there are zero costs for the cash management account. This includes free, no-fee access to any of the more than 75,000 ATMs in the network.

Robinhood Gold:

Furthermore, Robinhood Gold, a premium membership product, adds to the company’s “no-fee” reputation. A $5 monthly fee for active investors may be well worth access to the platform. Among other benefits, members get access to margin trading ($1,000 interest-free margin), instant access to higher deposits (regular accounts have up to $1,000 available instantly), and access to Morningstar stock research reports.

Free trading:

Take advantage of stocks, exchange-traded funds (ETFs), options, and cryptocurrency! Check! Verify! Free options trading from Robinhood makes investing in options easier than ever. The free options trading that Robinhood offers sets it apart from other brokerages that offer free stock and ETF trades.

Options traders are well aware that trading in and out in the market can rack up hefty commissions very quickly. Every transaction is subject to a commission charged by the broker. In terms of cost, these costs add up rapidly.

With Robinhood? Bupkus, zip, zero, nada, as in “no commissions.” If you’re looking for an entry point into the options market, this is an excellent choice.

In addition to all these freebies, Robinhood even offers commission-free trading of some cryptocurrencies. You can do this at any time, seven days a week. Cryptocurrencies can be bought directly instead of through futures contracts, which are more common now.

No Account Minimums and Quick Access to Funds:

Investors benefit from Robinhood’s no-minimum-account policy, but its fund access guidelines are even better. When you transfer money to open your account; it can take a while for your money to be available and accessible for use in your account. Anyone experienced in the process of creating and funding an investment brokerage account knows this.

Compared to other accounts from big-name brokers, the fund access with Robinhood accounts is outstanding. No questions asked, Robinhood credits money deposited into your account immediately. With fast verification through major banks, Robinhood allows you to avoid the hassle of reporting minor deposits into your bank account using the old school traditional verification process. Up to $1,000 of even your first deposit is available for trading immediately, with the remaining funds credited and available after a few days. Consequently, you can trade and get invested much more quickly.

Robinhood Gold

Robinhood Gold is another tic in the plus column. As an example, Robinhood Gold is a tool that allows you to purchase shares using borrowed money, or “margin.” It costs $5 per month and includes Morningstar analysis on 1,700 companies, Nasdaq Level II quotes, and margin loans. Subscribers will now be able to borrow $1,000 free, and subsequent borrowing will require only 2.5 percent annualized interest payments, down from the previous 5 percent annual rate.

The broker charges loan interest on your account every 30 days. If you do not have enough cash to pay for the cost, the charge is rolled into your margin balance. Industry guidelines require margin accounts to have a minimum balance of $2,000 in them. With Gold, transactions start at $5,000 and go up to $50,000 in a much shorter period. Everyone gets a $1,000 bonus that is deposited in their accounts immediately.

There are many ways to invest with Robinhood.

Investment funds and the stock market

Robinhood also offers a number of other services besides commission-free stock and ETF trading. You can place trades via the company’s mobile or web platforms. Access to the mobile website of the brokerage is possible from iOS devices and Android phones. A fractional share option is also available through Robinhood. This allows you to purchase a company’s shares at a price that is lower than the market value. You need only $1 to start investing in fractional shares.


Robinhood’s commission-free option trading comes with the added benefit of not charging a fee per contract. There are also several platforms that have tiered pricing structures that charge less for more active traders and more for less active traders. For its part, Robinhood charges no fees. Investing in options, however, carries a higher level of risk than investing in stocks and ETFs. As part of its website, Robinhood discloses all options-related risks.


Cryptocurrencies are also exempt from commissions on this site. Robinhood Crypto allows traders to trade digital currencies like bitcoin, Dogecoin, and Ethereum. By using your brokerage account, you can acquire cryptocurrencies through Robinhood Crypto.


Robinhood Gold members can trade on margin, read Morningstar research reports, and access NASDAQ market data. The account costs $5 a month and allows for contributions of up to $50,000 right away. Initially, you will need $2,000 at the very least. Securities or other financial assets that are beyond your means are purchased using margins borrowed from a brokerage. Margin loans require repayment of investments as security.


IPO access was also introduced by Robinhood recently. In contrast to other prominent brokerages that require a minimum household asset size, Robinhood does not have a minimum balance requirement (Fidelity wants $100,000 or $500,000.) IPO shares are an excellent investment opportunity for investors who wish to purchase them before they become publicly traded.

Who Robinhood Is Best For?

Robinhood is an excellent option for new investors who want to learn more about trading without making a significant investment. When a new account is created, it comes with a free stock. You may outgrow the platform, or you may be able to tweak it to suit your needs, like segregating research and technical analysis sources.

Low Initial investments:

Even $1 is a good starting point. To open an account with Robinhood, there is no minimum deposit required. No matter how many shares you buy in a company with a $500 price tag, one dollar is still a conceivable investment.

Types of trading:

Traders can trade stocks, ETFs, options, gold, cryptocurrencies, and ADRs from a single platform. It performs exceptionally well when it comes to making trading accessible to everyone, as Robinhood’s goal is to do.

Easy to use:

Trading on mobile devices and the internet platform is intended to be simple and uncluttered to make trading easier. You can easily find what you need. The “stock details” page shows charts, your position, and what kind of stock the stock belongs to, including Top Movers and Most Popular, among other things. You can set market, limit, stop-limit, and stop-order orders for trading purposes.

RobinHood is reliable?

Robinhood has a BBB grade of F, making it a bad investment. Several users at the brokerage were unable to remove funds from their accounts. The bureau cited a pattern of complaints. Robinhood, which is run by Wall Street Bets, froze trading in GameStop (GME) and AMC Entertainment (AMC) as a result of the activity of members of the r/Wall Street Bets subedit.

Investors are upset over lawsuits and backlash against a company investing app after trading on some companies was temporarily suspended. Following the suicide of a teenage user who had suffered a big loss due to options trading, Robinhood announced in 2020 that it would be improving its teaching content on the subject. Also, the company has hired an education specialist, and the software’s interface is being improved. When you’re not encouraged by the latest headlines, take a look at the top Robinhood alternatives.

Some Weak Points where Robinhood Pay attention:

Limited free research and educational components

When you don’t pay for trades, it’s impossible not to have access to free research and instruction. This may turn off inexperienced investors. As part of the broker’s Gold Program, the broker offers access to news and analysis from notable websites alongside Morningstar ratings. Several basic charting functions are included as well. For example, eToro and Charles Schwab offer far more services than commission-only brokers. The two free resources can be utilized by investors interested in improving their abilities and knowledge.

Purchase of mutual funds is not available:

Robinhood does not provide the option of investing in mutual funds, which is the most common way for individuals to participate in the market. Due to their ability to provide thousands of fee-based and no-transaction-fee funds, traditional internet brokers have an advantage over their disruptor competitors.

Account types include:

In comparison to its competitors, Robinhood doesn’t offer as many types of accounts. You can expect only one type of account, the taxable individual account. The old IRAs and joint accounts have been closed down. Though it claims to be expanding in this field, the broker hasn’t done much so far. It is detrimental to investors if they wish to continue their relationship, but are forced to use a separate broker for their other accounts.

Sell your order flow to make money:

As a result of Robinhood’s order flow being sold to high-frequency traders, the latter can predict market movements better and earn more on their trades from users like you. Robinhood allows its traders to purchase from you at a lower price and sell to you at a higher price, so they gain pennies (or fractions of pennies) every time they make a trade.

In late 2020, the Securities and Exchange Commission fined the broker $65 million for its deceit from 2015 to 2018. Investors who are interested in the long-term are less concerned with winning or losing on an investment. Consequently, it is more difficult for traders to earn extra income from short-term trades. Another point to note is that other large brokers depend on selling order flow just as much, which is especially important now that no commissions are charged in the industry. Robinhood isn’t the only company using this approach (legally).

Customer service:

Robinhood’s customer service is acceptable as long as your question can be answered by a pre-packaged set of solutions on its help website or by a bot. If you go a little farther, you may not be able to find a solution without contacting customer service. Those who need a fast response by phone may need to do some searching to find the phone number. It’s becoming increasingly apparent that Robinhood falls short in this area, compared to the likes of Fidelity or Schwab.

How Does Robinhood Help You Make Money?


The members of Robinhood Gold earn interest on the money they borrow from Robinhood. Robinhood charges somewhat hefty interest rates on the funds it lends to its customers.

Investing in Spreads

Robinhood wires money to a major intermediary that then executes the transaction on behalf of users. Because Robinhood retains a tiny margin (fractions of pennies) due to the disparity between what you choose and what the intermediary executes the trade at. Because of the volume, these fractions of pennies add up!


Robinhood Gold customers pay fees for the service, which generates profits for the company. It costs $5/month to subscribe to Robinhood Gold. In addition to the marginal interest portion, there are also additional expenses to consider.

Which Candidates Are Good for Robinhood? And who wouldn’t?

When it comes to trading equities or the hot crypto market, Robinhood is an excellent place to start. Joining is free, and you will receive one free share when you deposit any amount. In terms of Robinhood’s cash account, this isn’t a bad offer. The account offers a 0.30 percent APY, which is better than many banks now offer, and it comes with a debit card for purchases and free ATM withdrawals as well as a debit card for purchases.

Your needs for research and charting tools may change over time, as well as the need to open a retirement investment account for the money you are saving for retirement. Robinhood may not be able to provide everything you’re looking for unless it adds more capabilities, which is feasible. Since GameStop’s debacle paralyzed many Robinhood investors, it is a necessary part of any Robinhood review. On that fateful day, were billion-dollar hedge funds on Robinhood’s side, or average investors? At the time of the trade freeze, what was Robinhood’s position? If you are considering buying viral stocks, especially in the near term, you should take this into consideration.

To start an account with Robinhood, what do you need?

  • Each new Robinhood client is required to pass a few basic compliance tests to ensure they understand the risks involved in trading. In order to open an account, you’ll likely be asked for some of the following information:
  • There may be differences in the expiration dates on Proof of Address documents for each Robinhood Brand entity.
  • You must include a color copy of your passport or driving license
  • Utility bills or bank statements that reflect your current address for the last three months.
  • Additionally, you will be asked some basic questions about your trading experience. Please allow three minutes for the account opening process.

Robinhood may be available to you right away, but you will not be able to invest until you pass compliance, which may take a few days.

Final Thoughts:

Investing in the financial markets is easy via Robinhood, which is a low-cost alternative that can be used by beginners. For example, the company’s referral program is one of its most important incentives. Furthermore, stock, ETFs, options, and crypto can all be traded commission-free. As a result of these tools, you will be able to prosper financially as a result of beginning your journey. With this company, retail traders are redefining how they participate in the market. If you’re a newbie, this is the place to start.

You may be better off with another platform if you’re seeking a more comprehensive platform with capabilities that extend beyond investing. In the end, you are the one responsible for making the right choice regarding your financial goals. In terms of features and complexity, there are many investment and finance platforms available. What if Robinhood was right for you?