Opening an account and funding it

To invest through Robinhood, you first create an account on their website or mobile app, provide your Social Security number and basic identity information, and link a bank account. Robinhood will verify your identity and your bank connection — this usually takes one to three business days. Once verified, you can transfer money from your bank into your Robinhood account.

The minimum to start is $1. You can transfer as little or as much as you want, though some banks charge fees for frequent transfers. Robinhood itself does not charge account fees or require a minimum balance. Money you transfer sits in your account as cash until you decide to buy stocks, ETFs, options, or cryptocurrency.

You will need a valid government ID, your Social Security number, and a bank account in your name. If you are under 18, you cannot open an account directly — a parent or guardian must open a custodial account on your behalf.

Key Takeaways

  • You can open a Robinhood account with $1 and start buying individual stocks, ETFs, or cryptocurrency the same day your bank transfer clears.
  • Robinhood charges no commission on stock or ETF trades, but you pay the market price at the time you buy or sell.
  • Fractional shares let you buy a portion of an expensive stock instead of waiting to save for a full share.
  • Robinhood Gold is an optional paid subscription that offers margin investing and other features; most new investors do not need it.
  • Your investments are not insured by the FDIC, and the value of stocks and ETFs rises and falls with the market.

Buying your first stock or ETF

Once your cash is in your account, you search for a stock or ETF by its ticker symbol or company name. Robinhood shows you the current price, a chart of recent price movement, and basic company information. You enter how many shares you want to buy, or the dollar amount, and Robinhood calculates the cost. You then confirm the order.

Your order executes at market price during market hours (9:30 a.m. to 4 p.m. Eastern time on weekdays when the market is open). If you place an order after hours or on a weekend, it waits until the market opens. You can also set a limit order, which means you name the price you are willing to pay and Robinhood only buys if the stock falls to that price or lower.

Fractional shares mean you do not have to save up for an entire share of an expensive stock. If a stock costs $500 per share and you have $100, you can buy 0.2 shares. This makes it easier to own a variety of companies without needing thousands of dollars upfront.

Understanding what you actually own and what it costs

When you buy a stock, you own a small piece of that company. The value of your shares changes every trading day based on what other investors are willing to pay. If you buy 10 shares of a company at $50 per share and the price rises to $60, your 10 shares are now worth $600 — a $100 gain. If the price falls to $40, they are worth $400 — a $100 loss.

Robinhood charges no commission on trades, meaning you do not pay a fee to buy or sell. However, you always pay the market price at the moment you trade. If you buy a stock at $100 and sell it at $100, you break even. If you buy at $100 and sell at $110, you keep the $10 gain. Robinhood makes money through other means, such as interest on cash in your account and payment for order flow (selling information about your trades to market makers).

ETFs (exchange-traded funds) work the same way as stocks — you search for them by ticker, buy shares at the current price, and own a piece of the fund. An ETF typically holds dozens or hundreds of stocks or bonds, so buying one ETF gives you instant diversification instead of owning just one company.

Using Robinhood Gold and margin investing

Robinhood Gold is an optional paid subscription that costs $5 per month. It gives you access to margin investing, which means you can borrow money from Robinhood to buy more stocks than your cash allows. For example, if you have $1,000 and Gold is active, you might be able to borrow an additional $1,000 and invest $2,000 total.

Margin investing is risky. If your investments fall in value, you still owe the borrowed money plus interest. Robinhood can force you to sell your stocks to cover the loan if your account value drops too far. Most new investors do not need Gold — it is designed for experienced traders. You can start investing without it and add it later if you decide you want margin access.

Gold also includes other features such as extended-hours trading (before 9:30 a.m. and after 4 p.m.) and access to Level II market data, which shows more detailed information about buy and sell orders. These features are useful only if you trade frequently and want more control over timing and pricing.

Selling stocks and managing your portfolio

To sell a stock or ETF, you search for it in your account, tap or click the position, and select "Sell." You enter how many shares you want to sell (or a dollar amount), and Robinhood shows you the current price and the gain or loss if you sell now. You confirm the order, and it executes at market price during market hours.

Your account shows all your holdings, their current value, and your total gain or loss. You can see how much you paid for each position and what it is worth today. Robinhood also tracks your realized gains and losses — the actual profit or loss when you sell — which you will need for taxes.

When you sell at a profit, you owe taxes on that gain. If you hold the stock for more than one year before selling, the gain is taxed at the long-term capital gains rate, which is usually lower than the short-term rate. Robinhood does not withhold taxes automatically, so you are responsible for reporting and paying them when you file your tax return.

Risks and protections you should know about

Your stocks and ETFs are not insured by the FDIC (Federal Deposit Insurance Corporation). The FDIC only protects cash in bank accounts. If you own $10,000 in stocks and the market crashes, your $10,000 can fall to $5,000 or lower. Robinhood holds your securities in your name, so if Robinhood fails, your stocks are still yours — but Robinhood's failure could make it harder to sell them quickly.

Robinhood is a brokerage, not a bank. Your cash sitting in your Robinhood account is not FDIC-insured, though Robinhood does sweep uninvested cash to partner banks that provide FDIC coverage up to certain limits. Check Robinhood's current policies on cash coverage if you keep large amounts in your account.

The biggest risk is market risk: stock prices fall, sometimes sharply and for long periods. If you invest money you need in the next few years, a market downturn could force you to sell at a loss. Most financial advisors recommend investing only money you can afford to leave invested for at least five to ten years.

Frequently Asked Questions

Can I set up automatic deposits to invest regularly?

Robinhood does not offer automatic recurring transfers from your bank. You can transfer money manually whenever you want, but you have to initiate each transfer yourself. Some investors set a calendar reminder to transfer money on the same day each month.

What happens if I want to withdraw my money?

You can transfer cash out of your Robinhood account back to your bank account at any time. If you own stocks or ETFs, you must sell them first to convert them to cash, then transfer the cash out. Transfers usually take one to three business days to appear in your bank account.

Does Robinhood report my trades to the IRS?

Yes. Robinhood sends a Form 1099 to the IRS and to you at the end of the year if you sold securities or earned dividends. You must report this income on your tax return. Robinhood does not withhold taxes, so you are responsible for paying what you owe.

Can I invest in cryptocurrencies through Robinhood?

Yes, Robinhood offers cryptocurrency trading for Bitcoin, Ethereum, and other coins. The same principles apply — you buy at the current market price and own the cryptocurrency in your Robinhood account. Cryptocurrency is more volatile than stocks, meaning prices swing more dramatically.

What is a limit order and when should I use one?

A limit order lets you name the price you are willing to pay for a stock. If you want to buy a stock trading at $100 but think it might fall, you can set a limit order to buy at $95. Robinhood only buys if the price hits $95 or lower. Limit orders can take days or never execute if the price never reaches your target.