Robinhood Minimum Deposit To Open and Minimum Account Balance

2021 Robinhood minimum investment to open stock trading brokerage account or ROTH IRA. Robinhood minimum balance and initial deposit amount requirement.

Robinhood Minimum Deposit Amount

Robinhood minimum investment to open brokerage account $0
Robinhood minimum amount to open brokerage margin account $2,000 in cash and/or securities
Robinhood minimum initial deposit to open ROTH IRA, Traditional IRA, Simple IRA, or SEP IRA IRA accounts are not offered at Robinhood
Robinhood minimum balance requirement for brokerage account none

Robinhood vs Competitors

Can I Open IRA Account With Robinhood?

No, unfortunately right now Robinhood does not offer IRA accounts.

Robinhood trading review

The Cons of Using Robinhood

Robinhood Financial does have some drawbacks that bear mentioning. They can only trade “over 5,000 securities on Robinhood, including most U.S. equities and exchange trade funds (ETFs) listed on major U.S. exchanges.” as well as options and a few cryptocurrencies which is a bit limiting to many investors.

Investors cannot use Robinhood to trade:

  • Mutual Funds
  • Bonds
  • Fixed Income
  • Foreign Currencies (FOREX)
  • Preferred stocks
  • Tracking Stocks
  • OTC Equities
  • Foreign domiciled securities under $5 in value

If an investment strategy utilizes any of the above securities Robinhood will not be able to provide a single platform for the investor. Having to manage two separate accounts on two separate platforms is inconvenient.

One major limitation to note is that trading is mostly done using the app. They have trading on website but it's very limited. Investors can trade by phone with brokers only for “urgent trade support”. If a phone or tablet battery dies the investor may have to wait on hold to place trades which may not be ideal timing for active or day traders. This issue should be considered before moving all trading capital to Robinhood.

While Robinhood offers some charts, news, and details of each stock they do not have the robust research capabilities of other brokerage houses and their websites. You will have to utilize an outside source to do in depth fundamental or technical analysis on the securities you want to trade. For those wanting an all-in-one interface Robinhood may not be the ideal choice.

Robinhood currently does not offer dividend reinvestment (DRIP) options. All dividends go into the account as cash. Investors utilizing a dividend reinvestment strategy will not be able to do so using the Robinhood platform. This means they have to manually reinvest dividends as they are deposited to the account.

Robinhood only offers individual taxable trading accounts. They do not offer business, custodial, trust, nor retirement accounts as of this writing. This limits their low transaction fee advantages to only taxable trading accounts. This can be a pitfall to the tax conscious investor. Their website says they “hope” to offer joint, custodial, trust, and IRA accounts in the future.

Account transfers from other brokerage houses are not available. This can be less than ideal for many investment strategies. If it is not the ideal time to sell a certain security before moving to Robinhood it will have to wait. This means managing 2 trading accounts until the sale is complete and settled.

Robinhood Markets offers a very attractive pricing structure but it does have many limitations. This makes the platform only useful to common stock and exchange traded fund investors in the USA. Investors who need deep research, dividend reinvestment, or other investment securities not offered by Robinhood will need to utilize another brokerage house.