2020 Robinhood App Review

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2020 Robinhood App Review

I’ll admit it off the bat: until the last few years I didn’t know a whole hell of a lot about investing. Despite the technical analysis seminars I’d tag along to with my father, my past experience with apps like Acorns, and even keeping a decent eye on the stock market in general, I’d never directly purchased a stock of my own. But that has finally changed. After years of reading about it, I finally decided to download and sign up for Robinhood. Now, after several years of using the app, I’ve really become a big fan overall.

If you’re not familiar, Robinhood is an app that allows users to buy and sell stocks without any fees or commissions. As the app has grown, they’ve also added some new features — including introducing the ability to buy cryptocurrencies and trade options (more on those later). If you’ve come to the realization that you should be doing more with your extra funds, let’s take a look at how Robinhood can help you start investing your money.

Signing Up for Robinhood and Funding Your Account

While most of the finance apps I review involve a bit of a sign-up process, joining Robinhood was by far the most extensive experience I’ve had so far. Of course this is completely understandable as the app must adhere to various regulations and needs to ensure that shareholders are properly documented. Because of this, it took me a few days from my first attempt at signing up until I was ready to trade.

To be fair, part of the problem with my sign-up process and the delay I experienced may have been my fault. For example, while the app allows you to upload a photo of your government-issued I.D. easily, the photo I took was apparently not readable. There was also a problem with my Social Security number not matching, which probably means I typed it wrong and didn’t catch my error until it was too late. In any case, I was eventually able to send a photo of my SS card in order to move forward with the approval process.

Another issue I encountered during the application process was that I had forgotten to unfreeze my credit file. Like many people, I elected to freeze my credit reports after the Equifax hack a while back and had completely forgotten that Robinhood would need to access my information. This must be something the app runs into fairly often as the team at Robinhood made it really easy to proceed. Once I put a temporary lift on my credit account, all I had to do was respond to their e-mail to let them know. In both cases (the unfreezing request and the social security card issue), the folks at Robinhood were very quick to respond and push my application through. So while it took a few extra steps along the way, within a few days I was ready to fund my account.

Speaking of funding your account, I found this part of the process to be much easier. For select banks, connecting your account is as simple as logging into your bank’s online service (via the popular Plaid service) as you would from their app or website. Alternatively you can manually enter your account and routing numbers in order to link them to Robinhood. I ended trying both options as my Wells Fargo was available to link, while my Discover Bank account had to be added manually.

One great thing about Robinhood is that, once you initiate a transfer from your bank, it allows you to access your funds right away (up to $1,000, that is). You also have the option to set up recurring transfers so that you’re automatically adding to your investment funds. While I haven’t tried out that automation just yet, I’ve definitely been impressed with the speed in which money is transferred, allowing me to snag a good price on a stock instead of waiting around for funds to clear.

Finally, I should also mention that Robinhood has a unique referral program that incentivizes users to share with their friends. When you invite people to join Robinhood using your special link, you’ll both earn a free stock when their application is approved. The type of stock you earn is random but 1 in 150 people can earn a premium stock, including Apple, Facebook, or Berkshire Hathaway (sidenote: while they don’t say as much, it’s probably safe to assume they mean $BRK-B and not $BRK-A as the latter trades for around $306,000 a share…). Meanwhile 1 in 80 people will receive either GE, Ford, or Kinder Morgan, with the everyone else receiving some other stock. In other words, feel free to use my link.

Get a Free Share of Stock

Not a Robinhood user? If you haven’t signed up yet just click the button to create an account and get a free share of stock just for signing up.w account with this Dyer News link.

Buying Stocks on Robinhood

When it comes to buying stocks on Robinhood’s platform, I’m really not sure it could be any easier — even for a newbie like me. All you need to do is enter how many shares you’d like to purchase, review the order, and submit. Moreover, if you don’t have the funds available to make the trade, it will prompt you to make a transfer for the difference.

As a long-time Disney fan, I knew what stock I wanted to buy before I even downloaded Robinhood. At the same time, I didn’t necessarily just want to pay the going rate to own a small piece of the Mouse House. That’s why I decided to give Robinhood’s limit order option a try.

Simply put, placing a limit order allows you to state what price you’re willing to buy a stock at and have the app execute your order should it become available. You can elect to have these orders expire the next day or keep them open indefinitely. In my case I entered a limit order for a couple dollars below the current market price, set it to expire only when canceled, and was surprised to find I had become a Disney shareholder the next day. Incidentally I set a second order to buy if $DIS fell below $100 a share and so I now own two shares of the Walt Disney Company.

Robinhood also offers the ability to set Stop Loss and Stop Limit orders, allowing users to set buy prices above the current trading price. Likewise you can also set similar triggers to have the app sell your stock positions when the price reaches certain lows or highs. I won’t pretend to understand all the intricacy and exceptions to these tools but they’ve worked pretty well for me (note: I haven’t actually sold any stock yet so I haven’t tried those options).

Voting rights for your stocks

After buying stocks through Robinhood, you’ll be afforded the same treatment as any other shareholder. This not only means you receive dividend payments but also entitles you to vote in various matters. According to their website, Robinhood utilizes both ProxyVote and Mediant in addition to their own system to allow customers to cast their ballots. Interestingly, while previous ballots sent to me had been via ProxyVote, a later Walt Disney Company proxy utilized Mediant’s ProxyPush.com. Personally I have to say I preferred the experience of the latter a tad more but both platforms are easy to use and navigate.

Other Robinhood Features — Robinhood Crypto, Options, and More

Robinhood Crypto

A few years ago Robinhood first introduced support for buying and selling major cryptocurrencies such as Bitcoin and Ethereum. Since then Robinhood has also added support for trading Litecoin, Bitcoin Cash, Bitcoin SV, Ethereum Classic, and Dogecoin. As someone who’s had a passing interest in crypto but not enough to dive in further, I was delighted to gain access to Robinhood Crypto soon after the beta began.

Although it sports some fun 80s Tron-esque backgrounds, Robinhood’s crypto trading platform is very similar to their stock trading platform. Just like with stocks, you can either buy coins at market price or set limit orders (the same goes for selling). You can also monitor your position and see how much your crypto is currently worth. As of this writing, the $4 I bought in Bitcoin has worked its way up to a whole $4.79! Meawhile I also had a limit order to buy $5 worth of Ethereum if the price falls to $400 or less at one time. Sadly, with the asset now trading south of $270, that’s clearly a loser. But hey — I’ll be all set for the next big pop, right?

One thing to note about Robinhood Crypto is that, at this time, they don’t allow you to remove your coins from the platform — although that is apparently something they’re working on (but they also have been for quite a while). This isn’t to say that you can’t cash out your funds, it just means that you’ll need to sell your coin and withdraw in U.S. Dollars. In other words those on team #HODL that want complete control over their crypto might not be too impressed with Robinhood’s offering at the stage, but it seems perfect for dabblers like myself.

Robinhood Options Trading

Not long after unveiling Robinhood Crypto, the app also introduced support for options trading. This includes the ability to buy and sell puts and calls. To access these features, simply tap “Trade” when viewing any stock and the “Trade Options” button will appear above “Sell” and “Buy.”

To the app’s credit, Robinhood’s options trading platform does a commendable job at explaining the concept of options for beginners. For example, it will first ask you if you want to bet that a stock is going up or down. Selecting the former will display various calls you can buy while selecting the latter will show puts. From there it will also offer a few special options for purchase, noting both term length and risk level for each listing. Meanwhile, more experienced traders can access a far more expansive list of puts and calls by selecting an expiration date at the top and toggling between puts and calls as well as selecting whether they want to buy or sell.

Despite the awesome job the app does at making options accessible, I have yet to trade any for myself. Still, I do definitely appreciate the option (see what I did there?) should I choose to enter that world in the future.

Robinhood’s Cash Management 

After months of anticipation, Robinhood recently began rolling out its Cash Management accounts to those on the waitlist. Offering 1.8% APY (accurate as of February 20th, 2020), a sleek-looking debit card, and access to more than 75,000 fee-free ATMs, this account acts as a great place to stash your cash while waiting to put it into the market. Alternatively, dividend investors can access their earnings with greater speed and fewer steps.

Although the Cash Management account was originally to be called “Checking & Savings” it doesn’t have all of the features that a normal bank account would. While funds are swept into partner banks (making them FDIC insured) and direct deposit is available, there’s currently no option for depositing paper checks. Still, as an extension of your Robinhood brokerage account, it’s a worthwhile product — especially since it’s free.

By the way for more on the Robinhood Cash Management account, you can read my full review.

Fractional shares

With the long-awaited Cash Management account now finally reaching users, Robinhood is already working on introducing another new feature: fractional shares. Soon users will be able to purchase stakes in select companies by dollar amount instead of number of shares. So, for example, you could buy $10 worth of Apple stock at a time as you work your way up to a full share.

To be clear, this concept didn’t originate with Robinhood. In fact I’m honestly a bit surprised it took them this long to bring these capabilities to their app. Nevertheless I look forward to fractional shares making their way to Robinhood, making it even easier for newbies to start investing. 

Final Thoughts on Robinhood

For the longest time, I’ve known I should start investing but wasn’t sure where to start. On that note, Robinhood has proven to be an extremely easy way to start buying stocks without having to pay commissions or fees. Furthermore, as I do start to learn the ropes and am ready to take my portfolio to the next level, it’s nice to know that Robinhood continues to expand their offerings. Plus, with the addition of fractional shares, the app will soon also appeal to those who want to invest but can’t afford to spend hundreds of dollars.

Compared to other beginner-friendly investing apps like Acorns, I think I actually prefer Robinhood as it allows me to buy specific stocks instead of a bundle of investments. At the same time it’s important to note that this means it’s on you to diversify your own investments — although that’s where purchasing ETFs on Robinhood may come in handy.

In any case I’m excited to have purchased my first stocks via Robinhood and continue to look forward to learning more about the world of investing. If you are too then use this link to sign up and get started by getting a free share of stock today!


Kyle Burbank

Kyle is a freelance writer and author whose first book, "The E-Ticket Life" is now available on Amazon. In addition to his weekly "Money at 30" column on Dyer News, he is also the editorial director and a writer for the Disney fan site LaughingPlace.com and has recently starting publsihing his own personal finance blog at https://moneyat30.com/

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Interesting. it can be a good start for those who wants to invest in stocks but doesn’t know how.

Heard about robinhood and been thinking to try investing with it. This is investing made easy. thanks for the review.

Robinhood is free, simple to use and very convenient, this is an excellent way to start and learn investing with stocks.

Glad I’ve tried it. Been using it for a while now. Its easy and hassle free investing. .

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