Robinhood lets you buy stocks, ETFs, options, and crypto from your phone or computer with no trading commissions. Getting from download to your first investment takes about 10 minutes of setup, plus one to three business days for your bank transfer to clear. Here’s how the whole process works.
Opening Your Account
You can sign up through the Robinhood app (iOS or Android) or on the website. To be eligible, you need to be at least 18 years old, have a valid Social Security Number, and hold a legal U.S. residential address within the 50 states, Puerto Rico, or the U.S. Virgin Islands. You must also be a U.S. citizen, permanent resident, or hold a valid U.S. visa. Active military personnel stationed abroad may qualify as an exception to the address requirement.
During signup, Robinhood will ask for your full name, date of birth, Social Security Number, and address. It uses this information to verify your identity electronically, so most people won’t need to upload documents. You’ll also answer a few questions about your employment status and investing experience, which is standard for any brokerage account due to financial regulations.
Once your identity is verified, you’ll link a bank account to fund your trades. You can connect through your bank login credentials or by entering your routing and account numbers. Robinhood typically offers instant access to a portion of your deposit (up to $1,000 for standard accounts) so you can start trading before the full bank transfer settles, which takes one to three business days.
What You Can Invest In
Robinhood supports U.S. exchange-listed stocks, ETFs, and closed-end funds. You can also trade American Depositary Receipts (ADRs), which are shares of foreign companies like Alibaba that are listed on U.S. exchanges. Options contracts are available for stocks and ETFs, and you can trade certain cryptocurrency through a separate Robinhood Crypto account. Futures trading is also available through a dedicated futures account.
One feature worth knowing about is fractional shares. Instead of needing hundreds of dollars to buy a single share of an expensive stock, you can invest as little as $1 in most major stocks and ETFs. This makes it practical to build a diversified portfolio even with a small starting balance.
Robinhood does not support mutual funds, bonds, foreign-domiciled stocks that trade on overseas exchanges, or fixed-income trading. If those are important to your investing plan, you’ll need a different brokerage for that portion of your portfolio.
Placing Your First Trade
To buy a stock or ETF in the app, search for the company or fund by name or ticker symbol. Tap the result to open its detail page, then tap “Trade” and select “Buy.” You’ll enter either the number of shares you want or a dollar amount (for fractional shares), review the estimated cost, and swipe to confirm.
By default, Robinhood uses a market order, which buys at whatever the current price is when your order executes. This is fine for large, heavily traded stocks where the price doesn’t jump around much between the time you tap “buy” and the order fills. For less liquid stocks or when you want price control, you can switch to a different order type before confirming.
Robinhood supports five order types for stocks and ETFs:
- Market order: Executes immediately at the best available price.
- Limit order: Only executes at a price you specify or better. If you set a limit of $50, you won’t pay more than $50 per share.
- Stop order: Triggers a market order once the stock hits a price you set. Often used to sell automatically if a stock drops to a certain level.
- Stop limit order: Like a stop order, but once triggered it becomes a limit order instead of a market order, giving you more price control.
- Trailing stop order: Sets a stop price that automatically adjusts as the stock moves in your favor, locking in gains while protecting against reversals.
To change the order type in the app, tap “Buy” or “Sell” on the stock’s trade screen, then select the order type option before confirming. On the web, you’ll see an “Order type” dropdown on the order form.
Building a Portfolio Over Time
Buying a single stock is straightforward, but building a portfolio that actually serves your goals takes a bit more thought. ETFs are the simplest way to get broad diversification in one purchase. A single S&P 500 ETF, for example, gives you exposure to 500 large U.S. companies. You can combine a few ETFs covering different asset classes (U.S. stocks, international stocks, bonds through a different broker if needed) to create a balanced portfolio without researching individual companies.
Robinhood also lets you set up recurring investments. You pick a stock or ETF, choose a dollar amount, and select a schedule (weekly, biweekly, monthly, or quarterly). The app will automatically buy fractional shares on that schedule. This approach, sometimes called dollar-cost averaging, means you buy more shares when prices are low and fewer when prices are high, smoothing out the impact of market swings over time.
For retirement savings, Robinhood offers individual retirement accounts (IRAs), both traditional and Roth. Robinhood Gold subscribers get a 3% match on IRA contributions, which functions like free money added to your retirement balance. Even without Gold, the IRA option lets you invest in a tax-advantaged account directly through the same app.
Costs and Robinhood Gold
Standard Robinhood accounts charge no commissions on stock, ETF, or options trades. There are no account minimums and no maintenance fees. Robinhood makes money through payment for order flow (routing your trades to market makers who pay for that flow), interest on uninvested cash, and its Gold subscription.
Robinhood Gold costs $5 per month, or $50 if you pay annually. The main perks include a higher interest rate on uninvested cash sitting in your account (currently 5% APY compared to a lower rate for free accounts), the 3% IRA contribution match mentioned above, larger instant deposit limits, and access to professional research reports from Morningstar. Whether Gold is worth it depends mostly on how much cash you keep in the account. If you regularly hold $1,200 or more in uninvested cash, the higher APY alone covers the monthly fee.
How Your Investments Are Protected
Robinhood is a member of the Securities Investor Protection Corporation (SIPC), which protects your account if the brokerage itself fails financially. SIPC coverage is up to $500,000 per customer, including a $250,000 limit for cash. This protection kicks in if Robinhood were to go bankrupt and your assets went missing. It does not protect you against losing money because a stock you bought went down in value, and it doesn’t cover bad investment decisions.
Cash in your brokerage account that you haven’t invested yet is held for the purpose of buying securities, so it falls under SIPC protection rather than FDIC insurance. This is an important distinction: FDIC insurance at a bank covers deposits regardless of what happens in the market, while SIPC only covers the scenario where the brokerage firm itself collapses. Your stocks and ETFs held at Robinhood are registered in your name, so even without SIPC, they would typically be transferred to another brokerage if Robinhood shut down.
Selling and Withdrawing Money
Selling works the same way as buying. Go to the stock’s detail page, tap “Trade,” select “Sell,” and choose the number of shares or dollar amount. You can use the same order types available for buying. After you sell, the proceeds from stock and ETF sales take two business days to settle (this is an industry-wide rule, not a Robinhood policy). Once settled, you can withdraw the cash to your linked bank account, which typically takes one to three additional business days.
Keep in mind that selling investments can create a taxable event. If you sell a stock for more than you paid, the profit is a capital gain. Investments held for more than one year qualify for lower long-term capital gains tax rates. Investments held for one year or less are taxed as short-term capital gains, which means they’re taxed at your ordinary income rate. Robinhood provides tax documents (a 1099 form) each year summarizing your trading activity, which you’ll need when filing your return.