Robinhood democratized investing by eliminating trading commissions in 2013. It's the most popular app for first-time investors. Here's everything you need to know to start trading on Robinhood safely.
Individual Taxable: standard account, no contribution limits.
Roth IRA: tax-free growth, contribute up to $7,000/year (2024).
Traditional IRA: tax-deductible contributions, taxed on withdrawal.
Robinhood Gold ($5/month): 5% APY on uninvested cash, bigger instant deposits,
margin trading, Level 2 Nasdaq data.
Fractional shares: buy $1 of Apple, Amazon, or any stock -- no need for full share price.
Options trading: available after approval (answer questions about experience).
Crypto: Bitcoin, Ethereum, Dogecoin, and 15+ other coins.
Recurring investments: auto-buy on a schedule (weekly, monthly).
Cash card: debit card that rounds up purchases into stock.
At $5/month ($50/year):
5% APY on uninvested cash (on first $50,000) = $250/year on $5,000 cash.
Bigger instant deposit limits (up to $50,000 vs $1,000 free).
Margin borrowing at ~6% -- use with extreme caution.
Worth it if: you keep significant cash in the account OR need larger instant deposits.
No mutual funds: can't buy Vanguard VTSAX -- ETF equivalents exist (VTI).
Payment for order flow: Robinhood sells your order to market makers,
which may result in slightly worse prices vs Fidelity.
Customer service: primarily in-app chat; no phone support on free tier.
2021 GameStop controversy: restricted buying during squeeze -- controversial.
Related: How to Open a Brokerage Account • Choosing a Trading Platform • Buy and Hold -- The Simple Path to Wealth