Yes, you can buy index funds on Robinhood, but only through exchange-traded funds (ETFs)
Robinhood does not offer mutual funds, which is the traditional way most people own index funds. Instead, you can own an index through an exchange-traded fund (ETF) — a fund that tracks an index and trades like a stock. You buy and sell ETFs the same way you buy individual stocks on Robinhood: search the ticker, enter the number of shares, and place the order.
The most common index ETFs available on Robinhood track the S&P 500, the total U.S. stock market, or the total bond market. Examples include SPY, VOO, and VTI for stock indexes, and BND or AGG for bond indexes. Robinhood charges no commission on ETF trades, and you can buy fractional shares — meaning you can invest $50 and own a piece of an ETF rather than waiting to afford a full share.
The main trade-off is that ETFs trade during market hours only (9:30 a.m. to 4 p.m. Eastern time on weekdays), whereas mutual funds settle at the end of the day. If you place an order after market close, it will not execute until the next trading day.
Key Takeaways
- Robinhood offers index funds only as exchange-traded funds (ETFs), not as mutual funds.
- You search for an ETF by its ticker symbol, enter the number of shares you want, and buy it like a stock with no commission.
- Fractional shares let you invest any dollar amount, even $1, rather than waiting to afford a full share.
- ETF orders execute only during market hours (9:30 a.m. to 4 p.m. Eastern, weekdays), so after-hours orders wait until the next day.
- Popular index ETFs on Robinhood include SPY and VOO for the S&P 500, VTI for the total U.S. market, and BND for bonds.
How to find and buy an index ETF on Robinhood
Open the Robinhood app or website and tap the search icon at the bottom. Type the ticker symbol of the index ETF you want — for example, "VOO" for the Vanguard S&P 500 ETF. The fund will appear in the results. Tap it to open the fund's page, which shows the current price, a chart, and details about what the fund holds.
Tap the "Buy" button. Enter the number of shares you want to buy, or enter a dollar amount if you want to use fractional shares. Review the order — Robinhood will show you the total cost and any fees (usually zero). Tap "Review Order" and then "Confirm" to place the trade. The order executes immediately if you are trading during market hours. If you place the order after 4 p.m. or before 9:30 a.m., it will queue and execute at the next market open.
Once the order fills, the ETF shares appear in your portfolio. You own them outright and can sell them at any time during market hours. Robinhood will also show you the current value of your position and your gain or loss since you bought.
The difference between index ETFs and index mutual funds
An index mutual fund is a fund managed by a company like Vanguard or Fidelity that pools investor money and buys all the stocks in an index. You own shares of the fund, not the individual stocks. Mutual funds are priced once per day at market close, so if you place an order at 2 p.m., you get the price at 4 p.m., not the 2 p.m. price.
An index ETF is similar — it holds all the stocks in an index — but it trades on an exchange like a stock. The price changes throughout the day, and you buy or sell at the current market price, just like buying Apple or Tesla. Both track the same index and have similar long-term returns, but ETFs offer more flexibility and lower minimum investments.
Robinhood chose to offer ETFs because they trade like stocks, which fits Robinhood's design. If you want to own an index mutual fund, you would need to open an account at Vanguard, Fidelity, or another brokerage that offers them. Many people find ETFs simpler for this reason — one platform, one way to buy.
Popular index ETFs you can buy on Robinhood
| ETF Ticker | What It Tracks | Expense Ratio |
|---|---|---|
| VOO | S&P 500 (500 largest U.S. companies) | 0.03% |
| SPY | S&P 500 | 0.09% |
| VTI | Total U.S. stock market (3,500+ companies) | 0.03% |
| VTSAX | Total U.S. stock market (mutual fund version) | 0.04% |
| BND | Total U.S. bond market | 0.03% |
| AGG | Total U.S. bond market | 0.03% |
| QQQ | Nasdaq-100 (100 largest tech and growth stocks) | 0.20% |
The expense ratio is the annual cost to own the fund, expressed as a percentage of your investment. A 0.03% ratio means you pay $3 per year for every $10,000 invested. These costs are deducted automatically and do not appear as a separate charge.
VOO and VTI are popular choices for long-term investors because they have low costs and broad diversification. SPY is similar to VOO but slightly more expensive. BND and AGG are bond funds, useful if you want to balance stocks with bonds. QQQ is more aggressive — it focuses on technology and growth companies, so it swings more than the broader market.
Fractional shares and minimum investment
Robinhood lets you buy fractional shares of any ETF. This means you do not have to wait until you have enough money for a full share. If VOO costs $400 per share and you have $50, you can buy 0.125 shares for $50. Your ownership stake is smaller, but you still own a piece of the fund and benefit from its growth.
Fractional shares make it possible to start investing with any amount — $1, $10, $100, or more. This is useful if you are building a habit of regular small investments or if you want to diversify across multiple funds without needing thousands of dollars upfront.
When you sell fractional shares, Robinhood sells them at the current market price and deposits the cash into your account. You can then withdraw it or use it to buy something else.
Taxes and dividends on index ETFs
Most index ETFs pay dividends — small cash payments from the companies in the index. On Robinhood, you can choose to receive dividends as cash or reinvest them automatically to buy more shares. Reinvestment is usually the better choice for long-term investors because it compounds your growth, but you can change this setting anytime in your account preferences.
Dividends are taxable income in the year you receive them, even if you reinvest them. When you sell an ETF at a profit, you owe capital gains tax on the difference between what you paid and what you sold it for. Robinhood does not handle taxes — you report them on your tax return. If you hold the ETF for more than one year before selling, you may have access to for long-term capital gains rates, which are usually lower than short-term rates.
Keep records of when you bought and sold, and how many shares. Robinhood provides a tax document (Form 1099) at the end of the year, but you are responsible for reporting accurately.
Frequently Asked Questions
Can I set up automatic monthly investments in an index ETF on Robinhood?
Robinhood does not offer automatic recurring investments. You must place each buy order manually. However, you can set a calendar reminder to invest on the same day each month, or use a different brokerage like Vanguard or Fidelity if automatic investing is important to you.
What happens if I buy an ETF after 4 p.m.?
Your order will not execute until the market opens the next trading day at 9:30 a.m. Eastern time. You will see the order in your queue, and it will fill at the opening price, not the price you saw when you placed it. If you want to control the exact price, place your order during market hours.
Do I pay commission to buy or sell index ETFs on Robinhood?
No. Robinhood charges zero commission on all stock and ETF trades. You pay only the spread — the tiny difference between the buy and sell price — which is usually a few cents on larger ETFs.
Is an index ETF safer than buying individual stocks?
Index ETFs are less risky than individual stocks because they hold dozens or hundreds of companies. If one company fails, it is a small part of your investment. Individual stocks can lose all their value. However, index ETFs still rise and fall with the market, so they are not risk-free.
Can I hold an index ETF in a retirement account on Robinhood?
Yes. Robinhood offers individual retirement accounts (IRAs) where you can buy index ETFs with tax advantages. Contributions to a traditional IRA may be tax-deductible, and a Roth IRA grows tax-free. You can transfer an existing IRA from another brokerage to Robinhood if you want to consolidate.