Last Updated on October 26, 2022 by Lily Connel
Robinhood is a zero-fee trading app that has been gaining popularity over the past few years. It allows investors to trade stocks, ETFs, options, and cryptocurrencies without paying commission fees. While Robinhood doesn’t offer all of the assets some investors are looking for.
The Pros And Cons of Robinhood – The Comparison Table
|Serial||Pros of Robinhood||Cons of Robinhood|
|1.||Robinhood is commission free.||There is one big drawback to Robinhood. It doesn’t let you trade with a human broker.|
|2.||Robinhood offers a wide variety of investment tools.||There’s no one to guide you in this big, scary world of investing.|
|3.||The platform is extremely easy to use.||Unlike traditional banks, it does not deliver banking services.|
|4.||It’s free to open an account.||Robinhood does not offer credit cards or loans at this time.|
|5.||An investment portfolio can be flexible.||The app has been glitchy in the past.|
|6.||Trading is free on the app.||Some people have made negative comments about customer service and the withdrawal of money.|
|7.||Beginner investors should take advantage of this tool.|
|8.||This app has been growing in popularity lately.|
Pros of Robinhood
1. The first pro of using Robinhood is that there are no commission fees. This means you can trade stocks, ETFs, options, and cryptocurrencies without paying any commission fees.
2. It offers a wide variety of investment options. You can trade stocks, ETFs, opportunities, and cryptocurrencies on the app, which gives you a lot of flexibility regarding your investment portfolio.
3. It is very user-friendly. The app is easy to use and navigate, making it an excellent option for beginners just starting in the stock market.
4. There is no minimum deposit required to open an account. You can start trading with as little as $0 in your account.
5. You can use the app to trade not just stocks but also options and cryptocurrencies. This gives you a lot of flexibility in building your investment portfolio.
6. The app has a user-friendly interface, making it easy for beginners to use.
7. The app has been gaining in popularity over the past few years, so you know that it is a reliable and trustworthy option.
8. It offers various investment options beyond stocks, such as options and cryptocurrencies. This allows you to be more flexible with your investment portfolio.
9. There are no commission fees associated with trading on the app. This saves you money in the long run and can help you keep more profits from your investments.
10. It is an excellent option for beginner investors. The app is user-friendly and offers a wide variety of investment options, making it an ideal choice for those just starting in the stock market.
Now that we’ve reviewed Robinhood’s pros let’s consider some cons.
Cons of Robinhood
1. One of the biggest cons of using Robinhood is that there are no human brokers. If you have questions about your investments or need help making a trade, you will not be able to speak to a human broker on the phone. Instead, you will need to rely on the customer service team, which can be frustrating if you try to get answers to complex questions.
2. Without human brokers, there is no one to guide or offer advice on investment decisions. This can be a big downside for those who are new to investing and need assistance when it comes to making trades.
3. It does not offer traditional banking services. You must do so through a third-party service if you want to deposit or withdraw money from your account.
4. Robinhood does not offer credit cards or loans, which can be a downside if you are looking for a one-stop shop for your financial needs.
5. There have been some issues with the app in the past. For example, in 2018, there was an issue with how the app displayed pricing data, which caused some users to overpay for trades.
6. Some users have complained about customer service issues and having difficulty withdrawing money from their accounts. While these issues have been resolved in most cases, it is something to be aware of before you decide to use Robinhood.
Overall, Robinhood is an excellent option for those looking for a user-friendly platform with no commission fees. However, there are some downsides to using the app, such as the lack of traditional banking services and the absence of human brokers.
If you are comfortable with these drawbacks, Robinhood may be a good option. However, if you are looking for a more traditional broker or need assistance with your investment decisions, you may want to look elsewhere.
Frequently Asked Questions
Is using Robinhood a good idea?
If you’re starting your investment journey, Robinhood is a great platform, to begin with. The app and website are both user-friendly and ideal for those new to investing. You can quickly learn the basics of trading and operations on this site.
Is it wise to use Robinhood?
Robinhood has a lot going for it. Its low costs and ease of use are sure to attract customers, but investors should be cautious about Robinhood. Robinhood has recently faced regulatory fines, public criticism, and litigation. The Securities and Exchange Commission (SEC) levied a $65 million penalty on Robinhood in 2020 for deceiving consumers.
Can I pull my money out of Robinhood?
You can withdraw money from Robinhood on any business day, up to five times. You’re also allowed to withdraw $50,000 daily without issue, as long as you make sure the withdrawal goes into the correct account.
Why can’t I withdraw my money from Robinhood?
If your account is restricted, you may be unable to withdraw money. Robinhood sometimes determines users’ accounts for various reasons, such as if the user has a negative balance or if fraud is suspected.