Robinhood Is a Dead-Simple Investing App That Anyone Can Use


Buying stock used to be a real pain.

Before the internet, you had to call your broker or investment, tell them what stock you wanted to buy and how much of it you wanted to own. If you didn’t have enough money in your brokerage account and didn’t have the option of buying on margin (on loan), you just didn’t buy stock that day and waited until you gave them more money.

Investing got a whole lot easier thanks to the internet. Like most online services, you don’t actually need to talk to a human being anymore to invest money. You can simply use an online brokerage or the website of your investment firm, transfer money to them directly, choose which stock you want to buy, and own that stock. Yet despite the lack of a middleman, online investing portals still take commissions and tack on fees for nearly every transaction.

That’s where Robinhood comes in. Instead of paying commissions for each trade and dealing with big online brokerages, Robinhood buys shares of stock without charging you a single dime extra. There are no fees, no commissions, and no minimum amounts you must purchase or keep in your account. That’s why it’s the best investing app I’ve ever used.

Robinhood lets you buy stock in public companies and exchange-traded funds from your smartphone.

They don’t have a website, unfortunately, but your purchases are secure and insured by up to $500,000.

Robinhood is incredibly simple to use. You just search for the company you want to buy.robinhood-2

Next, you set the number of shares you want to buy and buy them. That’s it.

If you don’t have enough money in your Robinhood account to complete the transaction, Robinhood can withdraw money directly from your bank account. While that money will take a few business days to transfer, Robinhood will still float you up to $1,000 immediately. You can use that $1,000 in a trade (or trades) before it’s fully available in your account.

You can also buy things on limit on Robinhood.

For instance, if Apple stock goes down to $117.00 or less during today’s trading day, Robinhood can automatically purchase the stock at the lowest possible price. If the stock doesn’t go to that level or below, Robinhood won’t buy anything.

Robinhood does not charge any fees or commission for purchases or sales of stock.

robinhood-6If you’re buying a share of stock for $117.11, your total transaction cost will be $117.11. With other brokerages, it would cost you $117.16 plus a commission and any other fees you may incur.

There are no monthly fees for using Robinhood and no minimum balances or set amounts you must purchase.robinhood-5

If a company is selling $1 shares of stock, it might not be a great investment. But if you want to buy a single share for $1, you could still totally do that. Plus, Robinhood also shows you how much you’ve bought over time and how much you’ve made on your original investments in a very clear, easy-to-read list.

If you want to sell your stock, you just sell it. That’s it.

Robinhood takes no money from the transaction, and you can transfer whatever you make to your bank account without paying a fee. If you make any gains, though, you’ll have to pay taxes on them, but that’s a story for another day.

Robinhood makes no money on commissions or fees since there are none. Whatever money you put into the service is your money, and you only lose money when your stocks go down. There are no catches, no gimmicks, and no way to get screwed over by random charges. It just works.

Note: Robinhood and StockTwits share investors and have an ongoing partnership between their services. That said, I’ve been using Robinhood for over two years now — well before I started at StockTwits — and have recommended the app to pretty much everyone since I opened an account. – Scott

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