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In today’s ever-changing financial landscape, the pursuit of wealth through investment can be both tantalizing and daunting – especially for beginners. But technological advancements in recent years have ushered in a new area of accessibility, where even novice investors can dip their toes into the vast ocean of stocks, options and cryptocurrencies.
Leading the charge? Robinhood, a pioneering stock trading app whose most recent updates and changes to the platform are helping democratize investing. Since first launching in 2014 by Vlad Tenev and Baiju Bhatt, the financial platform has taught and empowered millions of users how to track and invest in stocks.
Robinhood has been a leading stock trading platform for years, but its newest updates to the platform have made an already-good app even better. One of the headlining features of Robinhood is its commission-free stock trading, in addition to commission-free options trading and crypto trading in selected states.
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But if that isn’t enough to sell you, high-tech features such as the Fractional Sharing feature, which allows you to buy shares of stocks and ETFs in $1 increments.
Below, check out five of the best that Robinhood currently has to offer – and why it’s just as good of an option for beginners as it is experienced investors.
COMMISSION-FREE TRADING
Robinhood revolutionized the industry when it became the first major brokerage platform to completely eliminate commissions on stock and options trading. Commission-free trading has now become the standard industry-wide, meaning you can trade stocks, ETFS, options and crypto without paying a commission. (Additional fees may apply).
RETIREMENT INVESTMENTS
Robinhood provides traditional and Roth IRAs with a one-time recommended portfolio or the option to select your own investments. Every dollar contributed to an IRA receives a 1% match, with Robinhood Gold subscribers receive a 3% match on contributions.
EASY-TO-NAVIGATE APP
Robinhood’s innovative and easy-to-use UI on their app is one of the main reasons that it maintains an edge over competitors, especially when it comes to beginners. Their customer-centric and design-first approach has been a hallmark of Robinhood since their founding more than eight years ago. Unlike other apps, whose designs are often over-complicated, confusing and intimidating, Robinhood focuses on simplicity as a way to eliminate the gatekeeping that can begin as soon as you open an app.
FRACTIONAL SHARES
One of the most exciting new updates to the Robinhood app is a Fractional Shares feature that allows users to buy shares of stocks and ETFs in $1 increments. This can be helpful for stocks that trade at a high share price like Amazon, for example, which normally trades for $1,000 per share.
ROBINHOOD GOLD
For those interested in more perks, Robinhood offers a premium service called Robinhood Gold with a monthly subscription fee. One of best perks of Robinhood Gold is larger instant deposits, meaning when users add money to their Robinhood account, a larger amount becomes available instantaneously. Also with Gold, users receive professional stock market research from Morningstar Reports and Level II Quotation from NASDAQ, often faster, updated quotations, which can be vital for those looking at micro price moves with stocks and ETFs.
Robinhood’s cash management feature is another exciting addition to the platform. It’s a great option for those with unvested cash that don’t necessarily want to invest in the stock market but want to earn some sort of return. Currently, Robinhood is quoting this return at 5.00% APY but this will fluctuate depending on the Federal Funds rate.
With this plan, users will also get access to competitive margin rates – the first $1,000 is interest free. The margin loan can be used to buy additional stocks, although this can be risky so most financial experts recommend only experienced investors take advantage of this feature.
Disclaimers:
All investments involve risks.
The 3% matching on contributions requires a subscription with Robinhood Gold (fees apply), must be subscribed to Gold for 1 year after your contribution to keep the full 3% match. You must have compensation (wage income) in order to contribute to an IRA. The funds that earned the match must be kept in the account for at least 5 years to avoid a potential Early IRA Match Removal Fee. For more information refer to the IRA Match FAQ.
Fractional shares are illiquid outside of Robinhood and are not transferable. Not all securities available through Robinhood are eligible for fractional share orders. For a complete explanation of conditions, restrictions and limitations associated with fractional shares, see the Fractional Shares section of our Customer Agreement.
Robinhood Gold is offered through Robinhood Financial LLC and is a membership offering premium services available for a fee. Not all investors will be eligible to trade on Margin. Margin investing involves the risk of greater investment losses. Additional interest charges may apply depending on the amount of margin used.
Cryptocurrency trading is offered through an account with Robinhood Crypto. Robinhood Crypto is not a member of SIPC or FINRA. Cryptocurrencies are not stocks and your cryptocurrency investments are not protected by either FDIC or SIPC. For more information see the Robinhood Crypto Risk Disclosure.
