Robinhood is a popular commission-free broker-dealer that has taken off like crazy since the start of 2020. To help you decide if it’s suitable for you, we’re collecting reviews from Robinhood users, and are listing all the good ones below. If you have used Robinhood, please submit a comment!
Of the limited feedback we’ve got on Robinhood so far, here’s how I’d summarize it: Robinhood is generally considered good for new traders, but there are a few issues with it. Robinhood issues that people have reported, and which you may run into, include the following:
- Downtime and slow performance from time to time
- There are no ‘guardrails’ so to speak (it’s easy to get high margin, meaning new traders can blow-up easily – but this is only an issue if you yourself aren’t disciplined)
- Rounding on bid-ask spread (meaning you can get worse fills)
- Customer service can be slow lately
- Reported by at least one user to be buggy
Consider these and do some further research before being lured into signing up under the promise of commission-free trading. If you’re OK with these potential issues and you’re just getting into buying stocks for the first time, then based on what people have said so far, Robinhood is probably worth trying.
Robinhood is a great platform for new traders and is very easy to use. While I don’t recommend it for day traders, it is great for swing trades and long-term investing. While Robinhood has caught a lot of difficult press, don’t forget that it was the trailblazer first commission-free trading which forced the hand of nearly every other major brokerage to follow suit or risk losing market share - Robinhood is a disruptive company and should be applauded for paving the path to commission free trading.
Now, there are negatives to the platforms. Here is what I can’t stand about using Robinhood:
1.) Too many outages - For crying out loud, uptime (especially during market hours) is critical for traders. Robinhood needs to ensure they resolve their outage issues or they will lose more customers
2.) Rounding on bid-ask spread - if there is an option contract that has a bid of $0.55 and an ask of $0.60, Robinhood will not allow you to get a fill in between but will force you to either wait for the bid price or meet the ask which I think makes a big difference depending on transaction size
3.) Easy to get high margin and option approval - Robinhood is an innovative app that seems to be geared toward the younger audience. With that in mind, it is way too easy to get approved for option and margin trading which are two of the more risky elements of investing and should be approached and managed with extreme caution
--Wesley Cherisien, WesleyCherisien.com
I originally got a Robinhood account back in 2018. If you're just getting your feet wet with buying individual stocks I would recommend it. However, as you advance with your trading skills, you'll find that you might want to buy more expensive stocks like Amazon, and Apple, etc.
Charles Schwab offers you the ability to buy fractional shares of stocks which was a feature I was looking for on Robinhood and could not find it. So I do a lot more of my trading with Charles Schwab now.
Charles Schwab also has more charting and research features which will be helpful as you advance your trading skills.
--Scott Bates, MoneyandBills.com
I personally use Robinhood for my play money and I recommend it to friends who are looking to get started investing. It is a great app, pros are that it is easy to setup and easy to start trading. Cons are that there are no real guard rails when it comes to investing, you can easily use margin to borrow. Options trading is a snap as well, which combining margin, options, and pre/post market hour trading can allow the uninitiated to get into real trouble. There have been a number of articles recently pointing to the fact that professional trades are taking advantage of Robinhood users in pre-market hours. At the end of the day, unless you have a real investment strategy Robinhood is just another fun gambling app, and like all gambiling, the house always win. So, have your fun, but if you are looking to build your savings or manage your retirement, look elsewhere there are more efficient options out there..
--Leibel Sternbach, Yields4u
I've been using Robinhood since their early days, and I haven't looked back.. I don't know of any disadvantages. There are no hidden fees for most users, and there options for more experienced traders with their Gold account. I've recommended it to many friends, both ones that are new to trading / want to dabble and experienced traders. Being able to scroll on your phone with a well-designed interface as you make decisions is pretty great. They also provide definitions as you run through various trading options.
You have full control over your investments, including the ability to purchase fractional shares, along with trading options (limits, etc.), at any moment. The news articles related to any stocks you own or are watching is nicely placed.
To be honest, Robinhood makes trading a little less intense & more fun.
--Gira Wieczorek, aleberrycreative.com
What I love about Robinhood
I've used Robinhood for nearly 2 years now and have been thoroughly impressed with its service and functionality. To this day, I haven't paid a dime in fees to Robinhood (other than upgrading my account to a $5/ month gold account) despite using it to manage significant sums of money and having completed dozens of trades. It is constantly working to improve its service and expand its offerings. It is a great app at an unbeatable price (free).
Despite being my favorite investment app, Robinhood has a few drawbacks. The two drawbacks that frustrate me the most are (1) the deposit delays and (2) the push towards single-stock investing and lack of bonds.
1. Deposit delays can be extremely frustrating. When you see a short-term opportunity and need to act quickly, nothing will ruin your day more than depositing money into your account and receiving a success message that says you will be able to use that money in 5 business days. This one drawback once cost my thousands. Luckily, by upgrading to a gold account ($5/ month) this drawback can be overcome. Needless to say, after that one mistake I upgraded my account and haven't run into that problem since.
2. As a personal finance coach, I teach my clients the importance of building a diversified portfolio. For most lay-investors, the bulk of that portfolio consists of mutual/index funds and bonds. While Robinhood offers a variety of mutual funds/ ETFs, their entire service is focused on individual stock picking and they do not offer bonds. As a consumer-facing company focused on servicing non-professional investors, I wish Robinhood put more of a focus on portfolio building and offered bonds. This would help the countless inexperienced investors who use the app avoid making large financial mistakes (like building a portfolio by picking single stocks based on little-to-no knowledge).
--Harrison Davis, rharrisondavis.com
I use Robinhood, Schwab, and Ameritrade.
Robinhood was the first to offer free trades, but Robinhood is super buggy. There are always glitches with that app. It went down for me during that one day of big market gains -- that incident where Robinhood ended up offering compensation to users who lost out on gains (they gave me $75).
Since other brokerages now offer free trades, I have moved almost all of my money out of Robinhood.
I began using Robinhood to trade stocks approximately a year ago. Like others I was initially attracted to it by the promise of commission free trades and its well-designed User Interface. Robinhood is designed with the retail investor in mind. Setting up an account and transferring money is very simple. From a usability standpoint I don't think there is a better designed or easier to use interface in the market. The issues I have had with Robinhood however have to do with occasional downtime and slow performance which can be costly. Robinhood experienced well publicized outages in early March as trading volumes hit record levels as the COVID-19 situation evolved. Users were unable to access their accounts for large portions of a number of trading days. Robinhood kept their users informed of the cause of this outage and expected resolution times but this outage obviously caused angst and frustration as users were unable to make trades or withdraw funds. Since this major issue in early March performance on the Robinhood app and website have improved significantly with only the occasional slow down. The pain of the March outages is still fresh so I highly recommend that investors do not tie up all their funds into one platform but rather spread them out across a few different trading platforms. When taking this all into account I would continue to recommend Robinhood to both novice and experienced investors who are looking for no-fee trades and a well-designed user interface.
--Mike Charles, Unified Pest Control
Since the 2015 Robinhood app release the company has had its ups and downs. Of late it's likely they are struggling with the demand. The customer service is inundated with inquires. So, there are a ton complaints. The responses from CS are generic and not helpful for a number of customers. Another issue is audience. While no commission is attractive, the platform is not good for active day traders due to delayed quotes.
--Mark Levitt, CheckRate.ca