3 Reasons Investors Still Love Robinhood
by Brittney Myers | Published on Oct. 7, 2021
Robinhood's road may be rocky, but many users are in for the long haul.
Investment app Robinhood has long been a controversial company. But, this year, they seemed to have ramped up the ruckus. If they aren't being sued for outages, they're being fined by FINRA for regulatory issues. And let's not forget their lackluster IPO.
Indeed, if you just go by the headlines, it's hard to imagine the online broker is anything but floundering. Surprisingly, however, it seems like Robinhood has managed to maintain its popularity through all of it -- and then some.
In 2021 alone, Robinhood has gained millions of new accounts, giving them an estimated active account base of more than 22 million. Considering the broker's tumultuous year, why are so many investors still sticking with Robinhood? We've got three good reasons.
1. Easy-to-use mobile interface
Investing can be complicated. And it isn't made any easier with a busy, data-heavy platform that makes you go through three menus just to make a trade.
With Robinhood, you don't need an economics degree to start trading. The simple, clean interface makes it easy for even beginning investors to figure out how to buy and sell in seconds.
You can browse stocks, ETFs, and crypto, as well as see the trading history, market caps, and recent earnings. You'll also get a basic news feed to help you stay on top of the market.
For traders on the go, the Robinhood mobile app is especially popular, pulling in four stars in both the Android and iOS marketplaces. With the mobile investment app, you can manage your account and make trades from nearly anywhere.
2. Low-cost, low-threshold trading
Robinhood's whole shtick is based on the idea of making stock trading accessible for anyone. And "anyone" doesn't typically have thousands of dollars to start trading. Part of what drives Robinhood's devout fanbase is how affordable it is to open and use their brokerage accounts.
For example, you don't need to meet a five-figure account minimum to open a brokerage account with Robinhood -- because there is no account minimum. You could start trading with just $1 if that's all you have to invest.
You also won't need to pay high commission fees for every trade. In fact, trading U.S. listed securities and eligible exchange-traded funds (ETFs) is entirely commission free.
Another way Robinhood makes trading more accessible is by allowing you to trade fractional shares. Basically, this means you don't need to buy whole shares in a company; instead, you can purchase part of a share based on how much money you want to invest.
For high-value stocks worth hundreds a share -- like Microsoft or Amazon -- fractional shares let you invest without having to fork over a fortune.
3. Trade stocks and crypto in one app
Keeping track of your financial accounts is critical, but it's not easy if your accounts are spread across multiple companies and apps. Robinhood allows users to invest in both stocks and crypto all in one place.
In the Robinhood app, you'll find several different cryptocurrencies, starting with the ever-popular Bitcoin. Additionally, you can purchase Ethereum, Dogecoin, and Litecoin. Investors can purchase crypto with as little as $1 investment, and there aren't any commission fees. So if you buy $100 in crypto, you get $100 in crypto.
While you can only buy and sell crypto currently, Robinhood plans to launch a crypto wallet sometime soon. You can even join the waitlist to ensure you're one of the first to try it out.
A convenient trading package
Sure, Robinhood has had a rocky year -- and the path ahead still has its share of bumps. But that doesn't seem to be negatively affecting the app's user numbers.
All in all, it's easy to see why Robinhood is so popular amongst beginning traders. But even seasoned investors can benefit from what the broker has to offer. From an accessible interface to affordable accounts, Robinhood makes it easy to invest. And the appeal of having all of your investments in one place -- including your crypto -- is sure to be a selling feature to many.
Of course, if you're still on the fence about whether Robinhood is for you, you can explore your options. You can easily find places to buy stocks that are better than Robinhood.
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