What is Robinhood? – Is Robinhood Free? – How does Robinhood Make Money?
What is Robinhood?
Robinhood is a mobile friendly app that allow users trade stocks for free. There’s also no minimum deposit required. Until Robinhood, it was difficult, if not impossible, to trade stocks on the internet without broker fees. Self-directed traders had to pay to purchase and sell stocks. The least expensive fees ranged from $8.95 to $3.95 per trade, depending on the broker and its loyalty program. A few stock brokers charge extra commission fees for stocks under $2.
How does Robinhood make money?
Altruism is never absolute, so behind the scenes, Robinhood makes money when users pay a monthly fee to unlock certain services like after-hours trading, margin accounts, etc. Plus, the profit acquired from trade using cash from customers’ unused deposits. Which is one of the ways banks make money from savings and CD accounts. This ‘free’ package is meant to draw-in as many self-directed traders as possible.
Why is Robinhood better?
There’s a reason Robinhood is growing at the rate that it is. One of them is low complexity. The user interface is very simple and easy for the average self-directed investor to maneuver. Plus there are no broker fees, and it’s quite easy to transfer funds to, and from your bank accounts.
This App is compatible with the two (2) major mobile operating systems, iOS and Android. The recently launched desktop friendly interface allows users to trade on an actual desktop or laptop computer.
The only drawback at the moment, as of May 29, 2018, is the lack of phone support. They are available by email and chat messaging. According to Robinhood, minimal business expenditure will help them maintain its free and low-priced features.
Robinhood App Review: One of the Best Investing Apps for Beginners?
- Video by Immersive Tech TV