If you’ve been trying to enter the world of stock trading, retirement investing, or cryptocurrency, chances are you’ve heard of Robinhood. If you already have a Robinhood account, then you might be considering subscribing to Robinhood Gold, Robinhood’s premier, paid, account level. If you’ve never used Robinhood before, or if you’ve never traded stocks, it can seem intimidating to compare all the trading options available to you. That’s why we’ve done the research so you don’t have to!
So, what do you get with Robinhood Gold, and is it as good as the marketing says? More importantly, is it worth the subscription fee? We dove into the details of Robinhood Gold for you so you can make an informed decision for you and your money.
What is Robinhood?
Robinhood is a California-based financial company that allows its users to make commission-free trades of cryptocurrencies, exchange-traded funds and stocks, and investments in individual retirement accounts (Read about Robinhood’s IRAs here). It is a digital-first mobile app company founded in 2013 and officially launched its app in 2015. It quickly found success with younger, less-experienced traders who wanted an easy and affordable way to start trading stocks.
While a number of controversies have caused the value of the company to plummet in recent years, consumers continue to flock to Robinhood for its free trades, simple and clean interface, and ease of use.
This commission-free model was so successful, in fact, that large brokerages including TD Ameritrade, Charles Schwab, and E-Trade all announced that they would eliminate trading fees in 2019. They all said Robinhood was the reason for this change.
As of August 2023, Robinhood had over 23 million funded accounts. It had almost 16 million active users every month in 2022, and in 2023 that number dropped to 10.6 million every month. It is planning to launch a version in the United Kingdom in 2024.
What is Included in the Free Version?
A basic Robinhood account allows you to buy and sell stocks and cryptocurrency, trade options, invest in a Roth or traditional IRA, and use a Robinhood Cash Card. The app is primarily targeted to those who are not experienced traders. Don’t have a lot of money to invest? Don’t worry! The average account size on Robinhood in 2023 was just $3,826.
Trading stock on Robinhood is similar to any other online trading service, except you don’t have to pay a commission for trading or a fee for having cash in your account. It is the only U.S. retail broker that allows users to trade stock 24 hours a day. Trading and investment options include ETFs, options, and margin trading. Robinhood also offers partial stocks, so you can purchase the amount that fits your budget if you can’t afford a particular stock you like. You can start trading with Robinhood for just $1. Robinhood also gives new traders their first stock for free.
If you’re looking to get into crypto, Robinhood offers all the most popular and valuable digital cryptocurrencies and is among the cheapest trading platforms available. Once you make a purchase, you can transfer it to your digital wallet right from the app. Robinhood doesn’t lend purchased currency or leverage against the investments made by its users. All purchases are insured against theft and cybercrime.
For options trading and margin trading, Robinhood offers professional tools including advanced charts, strategy-building tools and planners, watchlists, and more. There are no contracts and no fees required beyond those required by federal regulators for trades, which every institution has to pay.
Robinhood does not charge account fees, trading fees for regular trading, or balance fees. If you trade regularly or only a few times a year, you will not pay any fees or charges. The free account also includes 24/7 customer support and customizable alerts for the stocks and trades you want to keep your eye on. All uninvested cash in your account earns 1.5% interest.
To sign up for a free account, all you need is a smartphone, a valid Social Security number, a government ID proving you are at least 18 years old, and $1 to begin investing. You also need to live within the United States (for now).
What Do You Get With Robinhood Gold?
Robinhood Gold was launched in September of 2016. Robinhood’s Gold account enhances some of the features available with the free account and adds additional perks.
First, Gold accounts earn 5% interest on their uninvested non-retirement brokerage cash compared to the 1.5% for free accounts. This requires you to opt into Robinhood’s brokerage cash sweep program. Second, Gold accounts qualify for a 3% match for every dollar deposited into a Robinhood IRA account instead of just 1% for free accounts.
Additionally, professional and high-frequency traders can find a lot of value in professional market research and financial analysis provided by Morningstar, level 2 real-time market data from Nasdaq, and larger instant deposits into their accounts. Normally, investment firms require customers to wait five business days for funds from their bank to settle in their investment account. Free accounts at Robinhood can access $1,000 in instant cash transfers as soon as they initiate a transfer from their bank. Gold accounts, on the other hand, can access $5,000 in instant cash transfers, and that amount increases as their account value increases (up to $50,000 in instant cash transfers). Morningstar is a large market and investment research company that usually only provides its services to well-paying customers.
Finally, Gold accounts can access margin trading at 8% instead of the usual 12%. This means that customers can afford to borrow more money for their large-margin investments, or simply invest at a cheaper rate.
Robinhood Gold costs $5 per month after an initial 30-day free period.
Robinhood Gold: The Verdict
Judging by the numbers alone, Robinhood Gold is a great deal for those investing in an IRA or brokerage account.
For example, if you maximize your annual contributions to your Robinhood IRA ($7,000 beginning in 2024 for those under 50), you can earn a 3% match with a Gold account totaling $210 every year. A year subscription of Gold (without including the first free month) comes to $60. After just a few months, Robinhood Gold already begins to pay for itself.
You are leaving money on the table by not investing in an IRA with Robinhood Gold.
If you are an experienced trader, you can find value in market analysis and financial reports worth much more than the $5 subscription cost.
On the other hand, if you only enjoy the occasional trade, or don’t have an IRA account with Robinhood, you won’t find much added benefit from a Gold account.
The good thing is, that you can always cancel your Gold subscription if you don’t need it anymore without worrying about your existing funds and stocks. There is no account transfer or special platform for Gold users, so switching between a free account and a Gold account is easy and fast.
For both the free and Gold accounts, Robinhood offers a generous referral program. Currently, it offers up to $200 in stock for every referral to its app. These stocks are guaranteed and are automatically deposited into your account when your referral signs up and links their bank account. According to Robinhood, 99% of all stock rewards are worth $5, but there are chances for users to earn up to $200 for each referral, with a limit of $1,500 per year. So, if you have a lot of friends who don’t invest with Robinhood yet, there is money to be made!
In the end, Robinhood is a fantastic alternative to traditional trading platforms. With no fees or commissions for regular trades, casual and experienced traders alike are saving money and time by using just free Robinhood accounts. If you choose to consolidate your retirement savings with Robinhood, explore the world of margin trading, or trade with significantly more money, we can’t recommend Robinhood Gold enough. It’s a bargain at the price and the benefits included are actually useful and valuable.
If you’re curious about any other part of the Robinhood process, check out this page: a regularly updated list of all our Robinhood guides, news coverage, and lists of benefits.
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