When the average person thinks about investing, stocks and bonds is usually the first thought. Trading on the stock exchange used to be a costly endeavor which scared most people from even jumping in. A few years ago, Robinhood became a platform that allowed you to trade stocks and ETFs with no trading fees which kind of changed the game for a lot of people. Since its release, they have expanded the features on the app.
Commission-Free: Commission-free trading is pretty awesome. What this means is that when you buy or sell stocks, you don’t have to pay extra fees just for making the trade. With other platforms, you may spend up to $14.99/trade which can take away all of your profits. After being on a waitlist, you can also trade options and cryptocurrencies commission-free.
Robinhood Gold: This paid option allows you to have increased buying power, extended trading hours, and have bigger instant deposits. It is a monthly subscription based option for people who want more advanced trading options.
Free Stocks: Not sure how long this promotion will last, but if you invite your friends to Robinhood then both of you will receive one free share of a stock. Speaking of which, sign up for Robinhood here 🙂
No DRIP: In some cases, no DRIP would be a sign of health, but here DRIP stands for dividend reinvestment plan. If you own stock that pays dividends, then under DRIP, you can automatically reinvest those dividends into more stock. For some people, this really wouldn’t matter, but not having this means that any dividends you receive are essentially just going into your cash balance which is a non-interest bearing account.
Can’t Buy Partial Shares: This is a big one for a lot of people. Since you can only buy whole shares, pricier stocks will be too expensive for some people to jump into. This also plays into the fact that you can’t reinvest your money into dividends. Maybe they will change this in the future.
Simple User Interface: Might sound like a pro to some, but if you are really trying to invest in stocks then it is better to have advance charting methods as with some of the other paid platforms. Many people will chart trends on other platforms and then come to Robinhood to do the trade for free.