Today, many of us raise an eyebrow when someone asks for our Social Security number. Whether it's online or in physical form, people have become much more skeptical about giving out personal information.
This practice is completely understandable when you look at the growth of identity theft cases over the past decade. In 2020 alone, there were over one million cases of identity theft, more than double the numbers from 2019.
On the other hand, some services genuinely need your important data in order to help you. A good idea is to always understand why you need to provide that information, especially when it comes to your Social Security Number.
In the wrong hands, this number can be used to open credit cards or impersonate you in other ways. Always be wary of giving it out to people or businesses that you don't know.
If you recently tried opening an account with Robinhood, you may remember being asked to provide your SSN. So, do you have to give them the number? Why do they need it?
The answer to the first question is pretty straightforward. If you want to proceed with opening a Robinhood account, providing your SSN is mandatory. There are a couple of reasons why it's required.
Firstly, in order to open a Robinhood account, you need to be a U.S. citizen, permanent resident, or visa holder. A Social Security Number can help prove that you are one of these.
More importantly, the United States Government requires that brokerages like Robinhood know who their customers are. This helps to prevent fraud, money laundering, and tax evasion schemes. Social Security Numbers are unique to each individual, which makes them a great tool for monitoring income and ensuring taxes are paid.
By having your SSN, Robinhood can easily track who you are and report your financial dealings to the government if necessary.
This is actually helpful when tax season comes around. Robinhood will create the necessary tax documents you need to complete your tax filings. The generated forms will detail all of your portfolio income as well as your realized gains and losses.
Some tax return services are even compatible with Robinhood and enable you to automatically download your 1099 information straight to your tax filing. Completing your annual tax return can become much simpler and faster with this feature.
While it's good to keep your guard up, providing your SSN to Robinhood is necessary to open an account. The U.S. government itself is responsible for this rule, which may put your mind at ease.
Your Social Security Number is used to prove your identity, track your income, and make sure you are paying your taxes.
Still, be sure you are on a secure network when entering sensitive information and double-check that you're on the real Robinhood website or app. Scammers often use fake websites to trick people into entering their data.
Robinhood is an online investment platform that charges no commissions or fees for its basic service. The company first started in 2014 and now has over 13 million users. The easy-to-use mobile app is well-liked by many and makes it a great option for beginners. For more information on how to use Robinhood, check out our FAQ article or visit the Robinhood homepage.