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If you’re interested in getting started in investing but don’t know where to start, you’re in good company. Almost half of millennials are not currently investing in stocks and other securities, due in part to the belief they don’t have enough money to actually invest.
Fortunately, thanks to the internet and many innovative financial services companies out there, you don’t need a small fortune to start building your investment portfolio.
Many of these companies are available online and have apps that allow you to manage your investments via your mobile devices, an added plus.
Another great benefit to these new mobile finance platforms is that they are often tailored for small investors, too. Even if you only have a small amount of money to allocate towards your investments, there are plenty of apps now that will let you do just that.
One of the more popular companies out there right now when it comes to serving small investors is Robinhood. Let’s take a closer look at this investing platform, so you can determine if it is where you want to start putting your money to work.
Onto our Robinhood review!
What is Robinhood?
Robinhood is a financial services company headquartered in Menlo Park California. The company was founded in 2013 and provides a mobile app platform for users to invest in stocks, exchange-traded funds, and options.
Robinhood also allows its users to trade in gold and cryptocurrency as well. The key hook for Robinhood is cost: all of the trades for securities available on the platform are commission-free, and there is no minimum account balance requirement; these features, along with the ability for users to purchase fractional shares of stocks, allow people to get started with investing even when they don’t have that much money available.
Robinhood is only available for residents of the United States.
How Does Robinhood Work?
It is really easy to get started with Robinhood. In a matter of minutes, you can create an account on the website, then link it to your bank account. You do have to provide some basic information mandated by Federal law, such as your social security number.
Additionally, you will have to answer a few basic questions about your investing background, which Robinhood can use to tailor your experience on the platform.
Once you’re all done with this straightforward experience, the site will provide you the gift of an actual stock, a unique promotion that isn’t available with any of Robinhood’s rivals. You’ll then have to fund your account in order to be able to make trades.
You can buy and sell securities available on the platform (stocks, options, ETFs, gold, and cryptocurrencies), either using your computer or the Robinhood app on your mobile device.
There are no commission fees, and since you can buy fractional shares of stocks, you can literally invest the dollars and cents you have lying around your house on the Robinhood platform.
Beyond these basic features, you can also upgrade to Robinhood Gold, a premium service that costs $5 per month; doing so will enable you to trade on margin, or borrowed funds, as well as have access to exclusive content and information on the platform as well.
Robinhood has a rating of 1.8 out of 5 stars on Trustpilot with over 100 reviews, which is considered poor. Some of the complaints users cite in their Trustpilot reviews are poor customer service and issues with the security of personal data.
Additionally, the platform is not accredited with the Better Business Bureau and has an “F” rating with the BBB. Of note, the BBB reports that it has closed 916 complaints against Robinhood in the past three years, and 669 complaints in the past 12 months.
Robinhood Pros & Cons
Here are some of the key pros and cons for Robinhood you should consider:
- Low Cost. There are no commissions on the trades you make on Robinhood, no minimum balance required, and you can buy fractional shares, all of which allow users to begin investing without having a ton of money to start with.
- Free Stock. The platform provides users the gift of a free stock when they create an account.
- Crypto Option. You can buy and sell several popular types of cryptocurrency on the Robinhood platform.
- Bad Reviews and Existing Complaints. Robinhood has accumulated an alarming number of bad ratings and reviews with reputable organizations, including Trustpilot and the BBB.
- No Mutual Funds You cannot use Robinhood to invest in mutual funds.
If the idea of micro-investing interests you but you have concerns about Robinhood’s low ratings, don’t worry, you have other options. Here are some other mobile investing platforms that are definitely worth a look.
Robinhood Review: Parting Thoughts
When it comes to investing small amounts of money, you should definitely take a look at Robinhood. Its prices and free stock promotion are hard to beat.
However, you should definitely be wary of the high amount of poor reviews the platform has received over the past several years as well. If the site begins to honestly and transparently address some of the issues that have been raised, it could definitely become one of the best micro-investing platforms out there.
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Commission free fees with Robinhood
Thanks for reading our Robinhood review.
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