How to open a Robinhood account and fund it

To start investing through Robinhood, you need to download the app or visit the website, create an account with your email address, and complete identity verification. Robinhood will ask for your Social Security number, date of birth, and address — this is standard for any brokerage and required by federal law. The verification process usually takes a few minutes.

Once your account is verified, you link a bank account to fund it. You can transfer money from your checking or savings account, and the transfer typically takes one to three business days to appear in your Robinhood account. Robinhood does not charge a fee to open an account or to make transfers.

You do not need a minimum deposit to open the account, though you will need at least enough money to buy your first investment. Stock prices vary widely — some trade for under $10 per share, while others cost hundreds of dollars. Fractional shares, which let you buy a portion of a stock rather than a whole share, mean you can invest with smaller amounts of money.

Key Takeaways

  • You can open a Robinhood account in minutes with just an email address and identity verification, with no account minimum or opening fee.
  • Money transfers from your bank account take one to three business days, and you can only trade once the funds have settled.
  • Fractional shares let you buy partial ownership of expensive stocks, so you are not locked out by high share prices.
  • Robinhood charges no commission on stock or ETF trades, but you still pay the bid-ask spread — the difference between what buyers and sellers are willing to pay.
  • You can place trades during market hours (9:30 a.m. to 4 p.m. Eastern time on weekdays) or use extended hours trading for early morning and evening trades.

Understanding the difference between stocks and ETFs on Robinhood

Stocks are shares of ownership in a single company. When you buy Apple stock, you own a tiny piece of Apple. The price moves based on how the market values that one company. Stocks can be volatile — they can jump or drop sharply in a single day — and picking individual winners requires research or luck.

ETFs (exchange-traded funds) are baskets of many stocks bundled together. An S&P 500 ETF, for example, holds pieces of 500 large companies at once. Because you own many companies instead of one, an ETF is less risky than a single stock — if one company has a bad day, the others may offset it. ETFs also require less research because you are betting on a broad market trend rather than picking individual companies.

Most new investors find ETFs less stressful than individual stocks because the diversification does some of the work for you. Robinhood offers hundreds of both, so you can mix them in whatever way matches your comfort level and goals.

How to place your first trade

Once your account is funded, tap or click the search icon in the Robinhood app, type the stock ticker or company name, and select the security you want to buy. A ticker is a short code — AAPL for Apple, MSFT for Microsoft, SPY for an S&P 500 ETF. The app will show you the current price and a chart of recent price movement.

Tap "Buy," choose how many shares you want (or use the dollar amount if you prefer fractional shares), and review the order. Robinhood will show you the estimated cost and ask you to confirm. Once you confirm, the order goes to the market. During market hours (9:30 a.m. to 4 p.m. Eastern, Monday through Friday), most orders fill within seconds. Outside those hours, your order waits until the market opens.

After the trade completes, the shares appear in your account and you own them. You can hold them forever, sell them whenever you want, or add to the position by buying more. There is no penalty for selling — Robinhood charges no commission — though you may owe taxes on any profit when you sell.

What fees and costs actually exist on Robinhood

Robinhood advertises commission-free trading, and that is true — you do not pay a fee per trade. However, you still pay a real cost called the bid-ask spread. This is the gap between what buyers are willing to pay and what sellers are asking. When you buy a stock, you pay the higher ask price; when you sell, you receive the lower bid price. That gap is your cost, and it goes to market makers, not to Robinhood.

For popular stocks and ETFs, the spread is tiny — often just a penny or two per share. For less-traded securities, the spread can be wider and cost you more. Robinhood also offers optional features like margin (borrowing money to invest) and options trading, which carry their own risks and costs.

If you hold stocks in a taxable account (not a retirement account), you will owe capital gains tax on profits when you sell. Robinhood does not charge this — it is a tax you owe to the government. Robinhood does provide tax documents at year-end to help you report these gains.

Using market hours and extended hours trading

The stock market officially opens at 9:30 a.m. Eastern time and closes at 4 p.m. Eastern, Monday through Friday. This is when the vast majority of trading happens and when you will see the tightest bid-ask spreads. If you place an order during these hours, it almost always fills immediately at the price shown.

Robinhood also offers extended hours trading, which lets you trade from 4 a.m. to 9:30 a.m. (pre-market) and from 4 p.m. to 8 p.m. (after-hours). These sessions have much lower volume — fewer buyers and sellers — so spreads are wider and prices can move unpredictably. Orders may not fill at all, or may fill at a price very different from what you expected. Most investors avoid extended hours unless they have a specific reason to trade outside regular market hours.

Building a simple starter portfolio

If you are new to investing, a common starting approach is to pick one or two broad ETFs and add to them regularly. For example, you might buy an S&P 500 ETF (like SPY or VOO) and a total bond market ETF (like BND), split your money between them based on your age and risk tolerance, and then add money each month. This approach requires minimal research and lets you benefit from long-term market growth without trying to pick winning stocks.

Another option is to start with a small amount in individual stocks you understand — companies whose products you use — while keeping most of your money in ETFs. This lets you learn how stocks behave without risking your entire portfolio on a few bets. Many investors find this mix less stressful than going all-in on individual stocks right away.

Whatever you choose, start small, keep costs low by sticking to commission-free trades and low-spread securities, and avoid the temptation to trade constantly. The people who make money on Robinhood are usually the ones who buy and hold for years, not the ones who chase daily price movements.

Frequently Asked Questions

Can I lose more money than I put in on Robinhood?

With regular stock and ETF investing, no — your loss is limited to what you invested. If you buy $1,000 of a stock and it goes to zero, you lose $1,000. However, if you use margin (borrowing money) or trade options, you can lose more than your initial investment. Most beginners should avoid both until they understand the risks.

Do I have to pay taxes on stocks I hold but don't sell?

No. You only owe capital gains tax when you sell and realize a profit. Stocks you hold indefinitely are not taxed until you sell them. Dividends paid by stocks or ETFs are taxed in the year you receive them, even if you reinvest them.

What happens if Robinhood goes out of business?

Your stocks and ETFs are held in your name, not Robinhood's, so they are protected even if the company fails. Robinhood is also covered by SIPC (Securities Investor Protection Corporation), which protects customer accounts up to $500,000 if a brokerage fails. Your investments themselves are not at risk from Robinhood's financial health.

Can I set up automatic investments on Robinhood?

Robinhood does not offer automatic recurring investments like some other brokerages do. You can set up a recurring bank transfer to fund your account, but you have to manually place trades. Some investors set phone reminders to buy on a schedule, or simply transfer money monthly and buy when they log in.

What is the difference between a regular account and a retirement account on Robinhood?

Robinhood offers IRAs (Individual Retirement Accounts) in addition to regular taxable accounts. With an IRA, you get tax advantages — contributions may be deductible, and growth is tax-deferred until you withdraw in retirement. Regular accounts have no contribution limits and let you withdraw anytime, but you pay taxes on gains each year. Most people use both: an IRA for long-term retirement savings and a regular account for shorter-term goals.