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Written by Matthew Cerminaro on March 19, 2023
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Robinhood Review 2023: Best Investing App?

Investing is easier today than it has ever been in history. It is also significantly less expensive than it used to be.

However, with the proliferation of new trading platforms, investors often find themselves struggling to find which brokerage caters to them the best.

Robinhood is certainly a platform that make investing easy while also offering virtually a free trading experience. So, is Robinhood right for you? Does it have what you are looking for?

Don't forget to grab your free stock worth up to $200 from Robinhood today!

In this article, we provide a complete Robinhood review covering the pros and cons of the platform. Let's dive right in!

  • Trading Fees
  • Ease Of Use
  • Account Types
  • Research/Data
  • Securities Offered


Robinhood is a commission-free stock, ETF, option, and cryptocurrency trading platform. Users can open a Robinhood brokerage account with $0 and start trading for free.

Robinhood caters to beginner investors who are looking to trade in taxable brokerage accounts with limited fees.

Many users also find Robinhood a great platform for options trading due to the $0 trading fees.


  • Commission-free trading of stocks, ETFs, options, and cryptocurrency
  • Easy to use platform with a dynamic mobile app
  • No account minimums, ($2,000 for margin accounts)


  • Account types are limited to just taxable brokerage accounts. No retirement accounts or IRAs.
  • No trading mutual funds on the Robinhood platform

Robinhood Review: Platform Highlights

  • Zero Commissions on Stocks, ETFs, Options, and Cryptocurrency 
  • Beginner Friendly Mobile App
  • Fractional Shares That Lower Barrier To Entry
  • Competitive High-Interest Cash Management Program
  • Easy To Access to Important Tax Documents 
  • Access To Margin Trading
  • Premium Account Option, Robinhood Gold, That Provides Access To Level 2 Market Data and a Reduced Interest Rate on Margin
  • Access to Retirement Accounts
  • Access to IPOs
  • Free Stock Through Referral Program 
  • Comprehensive Buy/Sell Orders To Attain Execution Intentions 
  • FDIC Insured Accounts Up To $1.25 Million

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What Is Robinhood?

Robinhood is a US-based financial services company headquartered in Menlo Park, California. The company provides individuals with the opportunity to invest in stocks, ETFs, options, and crypto through its easy-to-use mobile application and website.

Robinhood currently has a growing active user base of 16 million.  It's a very popular option for younger investors because it is pretty simple to use. Robinhood has been deemed revolutionary based on the fact that they pioneered commission-free trading.

Vladimir Teneve and Baiju Bhatt launched the company in April, 2013. Previously, they had gained significant experience in New York City creating high-frequency trading platforms. The highly acclaimed and award-winning app was first showcased publicly at LA Hacks and eventually made its debut in March of 2015. 

Now, the app has a 4.2 average rating in the app store with over 4.1 million reviews.

Robinhood Free Training Shortcode (#8) (#9)

Robinhood Free Training

We put together a free 30 minute video training that walks you through the entire process, step by step. This training will help you get up and running in no time at all.


Robinhood Mission

Robinhood’s mission is to give everyone, regardless of economic background, a way to get into financial markets.

Robinhood accomplishes this by keeping costs for traders low and driving revenue through high-volume trading. Refer to our “How Does Robinhood Make Money” article to learn more. 

With fractional shares, zero commissions on stock trading, and no account minimum, investors can truly get started with as little as 1 dollar.

Robinhood Features

Despite being known as the simple-to-use trading app with a sleek user interface, Robinhood still touts a number of features - some of which are fairly advanced. Let's review those features in detail here.

Commission-Free Trading

Robinhood shines when compared to other apps because it gives investors a low-cost way of executing trades. For example, it offers commission-free execution of trades for its users on stocks, ETFs, options, and cryptocurrency, shaving off excess costs of investing. 

Beyond that, Robinhood offers you real-time quotes for free so you have a better idea of what assets are trading for before making a decision.

Investment Options

With Robinhood, investors can trade stocks, ETFs, Crypto, and Options. You can also trade penny stocks on Robinhood as well. For more advanced traders, Robinhood also provides investors with access to margin investing (more on this later).

Exchange Traded Funds (ETFs) are a basket of underlying securities that track an underlying index, industry, sector, or subsector of the market. ETFs are highly diversified and therefore may be a great option if you are new to investing and are looking to get your hands in several pots. 

Robinhood offers hundreds of different ETFs for you to choose from to build a highly diversified investment portfolio.

Some examples may include the “SPY,” an ETF that tracks the performance of the S&P 500 Index, the “XLH” which tracks the performance of the Healthcare Sector, or the “XLK” which tracks the performance of the Technology Sector. Sound interesting to you?

Other online brokers may charge underlying fees when you buy ETFs, because they are highly diversified and generally less profitable for brokers when compared to their proprietary mutual funds.  With Robinhood, these excess costs are diminished, making it a great choice for you if you want to keep costs low.  


Options give buyers the right, but not the obligation, to buy or sell a stock at a specified strike price before or on the day of expiration. These financial instruments are highly complex and are pretty much reserved for people who are more experienced with financial markets. 

If you are savvy in financial markets, or are looking for a thrill ride, Robinhood offers options trading with no commissions to buy or sell. 

Options come in the form of “contracts” offered through the Robinhood trading platform. These contracts present additional leverage which brings with it the potential for larger gains as well as the potential for larger losses.

Before you will have access to options trading, you will have to request access from Robinhood and will be approved for level 1, level 2, or level 3 options trading.

Robinhood has also created a simple and visual representation of potential profits and losses with their P/L Charts. When engaging in options trading, you will see their P/L charts. These charts are a great way for investors to confirm and visually understand the strategy they are choosing before submitting an options contract.

Robinhood Crypto

Robinhood users can buy cryptocurrency such as Bitcoin, Ethereum and dogecoin and sell 24/7 with zero commission. The app currently offers 18 cryptocurrencies to buy and sell. 

Robinhood allows fractional purchasing for small investors who looking to dip their toes into cryptocurrency. Fractional coins are a good idea because many of these cryptocurrencies come with high price tags.

They also recently launched a new crypto wallet that makes transferring coins in and out of Robinhood very simple. Be sure to check out the Robinhood Crypto wallet. Without using the wallet, transferring coins in or out of Robinhood would require liquidating your assets first and then transferring your funds.

It is important to note that Robinhood Crypto accounts do not hold the same level of protection as cash management and investment accounts. There is no federal insurance on your crypto and there is the potential for loss if Robinhood were to get hacked.

While they do keep most of their crypto in cold storage and disconnected from the internet and insured, there is still the potential for loss.

Robinhood IPO Access

IPOs used to be limited to institutional firms and high net worth individuals. Today however, Robinhood account holders have access to participate in IPOs.

Robinhood is not the underwriter during an IPO, but rather they gain access to participate in an IPO through partnering with investment banks. They then receive an allocation of share that their members can then request.

Through a random selection, some members may be chosen to purchase shares during an IPO.

Robinhood Cash Management

Robinhood’s Cash Management feature lets people earn on uninvested cash in a brokerage account. Robinhood also offers a much better APY than traditional banks, meaning you get the best bang for your buck. 

With Robinhood's Cash Management account, you can earn cash back as participating partners, save money with zero hidden fees, and earn up to $10 in weekly rewards as you spend and enables round-ups.

With this card, you also have access to 90,000 ATMs across the nation with 24/7 phone support.

FDIC Insurance

Robinhood is insured by the Federal Deposit Insurance Corporation that backs up and secures Robinhood cash management accounts up to $1.25 million. 

Robinhood investment accounts on the other hand are insured by the SIPC up to $500,000.

This makes Robinhood a safe investment in terms of protecting your deposits. If Robinhood went out of business, there are multiple layers of protection in place.

Robinhood Account Types

Robinhood Instant

This is Robinhood’s standard taxable brokerage account. You can buy and sell stocks, ETFs, options, and cryptocurrency through online and mobile platforms. This account is completely free to open and the first $1,000 deposited will appear in your account instantly. 

Robinhood Cash Management

Robinhood Cash gives all of its users access to Robinhood Instant features such as unlimited instant deposits and withdrawals. This account type is for those who would like to have a debit card and banking features all in one place with their investment account. 

Gold Account

If you're a Gold member, you will be given access to several features that are different than Robinhood’s standard account. 

Here's our full review of Robinhood Gold and whether or not it is worth the money.

With a standard account, members earn 1.5% interest on uninvested cash. With Robinhood Gold, that number increases to 4.15%.

Gold members also gain access to level 2 market data and larger instant deposits ($1000 for standard accounts and up to $50,000 for Gold members).

If you choose to invest on margin, you must pay interest on the “leverage” that Robinhood lets you access. You can magnify both losses and gains by investing on margin. With a standard Robinhood account, you will pay 11.25% in interest. With the Gold account, you get the first $1000 of margin completely free and anything over $1000 at a reduced rate of 7.25%. 

Robinhood Gold Members also get key info like industry-wide research from topnotch firms to help make smart investment decisions.

Retirement Accounts

Robinhood recently launched their IRA account option. With this account, users can open a Traditional or Roth IRA. Like other brokerages, these accounts can be opened in a matter of minutes and grant you access to compound interest.

With Robinhood, there is a special perk: matching. When talking about matching, most would quickly think about an employer sponsored 401K. However, with Robinhood, members receive a 1% match on all contributions made to an IRA. This may not seem like much, but it can become as much as $26,000!

Accessing Tax Documents

To find your tax document, you will follow this 3-step process:

  • Tap the Account icon in the bottom right corner of Robinhood app 
  • Click on Statements & History 
  • Hit Tax Documents

Keep track of important docs on Robinhood, such as the Form 1099 document, including information on the 1099-DIV, 1099-MISC-INT, and the 1099-B.

Customer Support

Most of Robinhood’s customer support comes from its extensive FAQ page on its main website. Dozens of common questions are on the page, along with detailed answers. If you cannot find an answer in their help center, you can also request a phone call 24/7. Within the app, they have a number of topics in the help center. Some of the topics can be answered in their help center and therefore, you will be directed to one of their FAQs. For other questions, you will be prompted to request a phone call directly from their team. 

Robinhood Free Stock Referral Program

Robinhood offers a great free stock referral program

 For every new friend who uses your referral code to sign up for a Robinhood brokerage account, both accounts will be credited with a free stock. In each calendar year, an account can receive up to $500 in free stocks. 

How To Claim Your Free Stock

  1. Navigate to the account page on the Robinhood App interface and tap “invite friends, get free stock” in the lower right-hand corner 
  2. Tap “invite contacts” 
  3. Pick the friends you want to invite to open a brokerage account 
  4. Once a friend uses your referral code and the conditions of the promotion are satisfied, both accounts will be credited with the free stock

How Robinhood Chooses Your Free Stock

Robinhood randomly selects shares of free stock from its extensive inventory of settled shares. However, since it is random, it's likely you and your friend will receive completely different stocks. 

You get a free stock when you sign up with our link too!

How Much Are The Stocks Worth?

The value of the stocks vary because of  the unpredictable nature of stocks, making it tough to put an exact dollar amount on a referral. According to the website, the shares may be valued anywhere between $2.50 and $200, but there's a 98% chance the stock bonus be worth $2.50-$10.00. 

The Robinhood app uses the “Top 100 Stocks” website section to pick the free stocks, so they are highly variable based on what is currently  popular on that particular day. 

Robinhood uses this page to credit its users with popular, relevant info on companies viewed by the market and its users as solid investments. 

Can I Sell The Stock Right Away?

Yes, the stock can be liquidated immediately, and your individual brokerage account will be credited based on the sale value.

Robinhood will count any gains on the stock as capital gains. These will show up on a 1099 tax form. However, if the stock is sold at the same price that it flows into your brokerage account, the value the stock is sold at will be counted as “other income” and won't carry income taxes.  

Are The Stocks Really Free?

With Robinhood’s Free Stock Referral Program, there are no gimmicks or catches. There are no strings attached - the stock is truly free. 

Users can get some skin in the game and see what it feels like to own stock before making their first purchase. 

Here's our full article explaining more about the free stock incentive on Robinhood.

Can You Day Trade With Robinhood?

The PDT Rule 

Established by FINRA, the PDT rule requires pattern day traders to have a minimum of $25,000 in their brokerage accounts for unlimited day trade transactional capabilities. This rule holds true with Robinhood as well.

Accounts below the $25,000 minimum will only be allowed three day-trades (a buy and sell on the same day) per week. 

Day Trading On Robinhood 

So, the short answer is yes – Robinhood does let users day trade while abiding by the FINRA PDT rule. If you want to day trade on Robinhood, make sure your account has a minimum of $25,000 to be eligible. 

Here's our full article about day trading on Robinhood.

Robinhood Order Types

Market Order

A market order on a security is executed at the best available price on the market. The ask price is what a seller is the price a seller is willing to sell at. If you are buying with a market order, your order will execute at the highest ask price available. 

Limit Order

Users can choose a specific price, called a limit order. This is the price at which that they want to buy or sell. The order will stay unfilled and idle until a buyer meets the seller’s request, or a seller meets the buyer’s request. 

Stop Order 

A stop order is an order to sell a stock at a specific price. It will turn into a market order and automatically be executed when the stop price is reached. Stop orders are very important for people looking to manage their risk properly and want to sell out of a security if it reaches a pre-set price considered risky. 

Stop Limit Order 

A stop limit order combines a stop and limit order into one. A limit order is triggered if a security hits a stop price that you have set. They will  set this limit order at a specified price that the seller has set. No worries; Robinhood will only execute the order when that price is fulfilled. 

Trailing Stop Order 

A trailing stop order lets you track the best price of a stock before triggering a market order. Trailing stop orders can help limit a maximum potential for losses, and help investors manage their risk. 

How Does Robinhood Make Money?


Robinhood makes money through gaining interest on the margin that it lends to account holders. Note: the charges Robinhood sets on money it lends to customers is relatively high. 

Spreads On Trades 

When Robinhood makes a purchase for its users, they wire it to a large financial intermediary to make the trade for the client.

The spread between the actual price that the intermediary executes the trade at, and the execution price you set creates a miniscule  (fractions of pennies) margin for Robinhood to keep. Due to high volume, these fractions of pennies do add up!


Robinhood makes money from fees that Robinhood Gold members pay. You will pay $5/month for Robinhood Gold. The marginal interest section, described above, also carries additional fees.  

Robinhood Pros

  • Extremely beginner friendly and easy-to-use
  • Zero-Commissions on all securities offered through platform
  • Easily accessible online tax documents and info
  • IRA account option with a 1% match
  • Cash Management provides competitive yields on idle cash
  • Award winning application that received the Google Play Award in 2016 
  • Zero account minimums
  • Great choice for the individual investor looking to have autonomy over his/her investment decisions
  • Democratization of financial markets through fractional shares
  • Extensive FAQ page that answers users most asked questions
  • Different types of orders to help risk management

Robinhood Cons

  • Execution prices can be poor depending on spread between bid/ask
  • Lack of a tactical trading platform 
  • You can only access research with the Robinhood Gold subscription 
  • No “shorting” capabilities offered
  • No Robo Advising service offered; you must pick and choose your own investments 
  • We would like to see paper trading offered on Robinhood in the future

Robinhood Review: The Verdict

Overall, Robinhood is a beginner-friendly, easy-to-use, low cost way to invest in the financial markets.

Robinhood has  key incentives like its stock referral program. It also offers zero-commission on stocks, ETFs, options, and cryptocurrency. These make it easy to start on your path and flourish financially. Simply put, the company is revolutionizing the way retail traders participate in the markets. 

If you're looking to get your feet wet in a beginner-friendly and simple way, this app may be for you. If you want a more complex platform with features beyond the world of investing, other apps may suit you better.

At the end of the day, the choice is up to you to find what will speed you along toward your financial goals. There are dozens of platforms to choose from by comparing features and complexities in the world of investments and personal finance. Robinhood could be the one for you! 

If you are ready to get started, check out our step by step article on how Robinhood works as well as how to make money with Robinhood.

Article written by Matthew Cerminaro
Matt is currently attending Union College pursuing a Bachelor of Arts in Economics. He participates in the student investment fund and is a member of the Union College football team. Matt runs his own personal finance Instagram page and market-related blog where he writes about economics and general wealth accumulation tips.

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