A Robinhood account is a brokerage account that lets you buy and sell stocks, options, cryptocurrencies, and other securities through a mobile app or website

Robinhood is a financial services company that operates a brokerage — meaning it holds your money and executes trades on your behalf. When you open an account, you deposit cash, and that cash sits in your account until you use it to buy investments. Robinhood makes money by collecting small fees from certain trades, lending out your cash when you're not using it, and offering a paid subscription tier called Robinhood Gold.

The account itself is not a savings account or a bank account. It's a brokerage account, which means the money inside is invested in securities (stocks, options, cryptocurrencies) rather than held as cash earning interest. You control what you buy and sell, and you can withdraw your cash at any time, though selling investments first may take a day or two to settle.

Key Takeaways

  • A Robinhood account holds your cash and executes trades you place through their app or website, but Robinhood does not manage your investments for you.
  • You can buy stocks, options, cryptocurrencies, and exchange-traded funds (ETFs) with no account minimum and no commission on stock trades.
  • Your account is protected by the Securities Investor Protection Corporation (SIPC) up to $500,000 if Robinhood fails, though this does not protect you from investment losses.
  • Robinhood Gold is an optional paid subscription that offers margin trading (borrowing money to invest) and other features; a basic account is free.
  • You must be at least 18 years old and a U.S. resident to open an account, and you'll need to provide your Social Security number and proof of identity.

How money moves in and out of your account

When you open a Robinhood account, you link a bank account. You can transfer money from your bank into Robinhood, and that money sits in your account as cash until you buy something. If you sell an investment, the proceeds land back in your account as cash. You can then transfer that cash back to your bank account, which usually takes one to three business days.

Robinhood also offers a debit card (available to Robinhood Gold members) that lets you spend directly from your account balance. This is not the same as a bank debit card — you're spending money that's in your brokerage account, not a checking account.

What you can buy and sell

Robinhood lets you trade stocks (individual company shares), options (contracts that give you the right to buy or sell a stock at a set price), cryptocurrencies (Bitcoin, Ethereum, and others), and ETFs (funds that hold many stocks or bonds). You can also buy fractional shares — meaning you can own a piece of an expensive stock without buying a whole share.

You cannot use a Robinhood account to buy bonds, mutual funds, or Treasury securities directly. You also cannot set up automatic recurring investments, though you can manually buy the same investment as often as you want.

Account types and minimum deposits

Robinhood offers two main account types: a standard individual account and an IRA (Individual Retirement Account). The standard account has no minimum deposit and no monthly fee. An IRA is a retirement account with tax advantages, and Robinhood offers both traditional and Roth IRAs.

If you want to trade options or use margin (borrowing money to invest), you'll need to request those permissions within your account settings. Robinhood will ask about your investment experience and income to decide whether to grant them. Margin trading requires a Robinhood Gold subscription, which costs $5 per month.

How Robinhood makes money and what it costs you

Robinhood does not charge commissions on stock, ETF, or options trades. This was unusual when Robinhood launched in 2015, but most brokerages now offer commission-free trading. Robinhood makes money in other ways: it collects interest on cash sitting in your account, it lends out your securities to short-sellers and collects a fee, and it sells information about your trades to market makers (large financial firms that buy and sell in bulk).

If you use margin (borrowed money), you pay interest on the borrowed amount. If you trade options or cryptocurrencies, Robinhood may charge small spreads — meaning the price you pay to buy is slightly higher than the price you'd receive to sell. Robinhood Gold costs $5 per month and includes margin trading, extended trading hours, and other features.

Protection and insurance

Your Robinhood account is protected by the Securities Investor Protection Corporation (SIPC), which insures up to $500,000 per account if Robinhood fails or goes out of business. This protection covers the cash and securities in your account, but it does not cover losses from bad investment decisions or market downturns. If you lose money because a stock price fell, SIPC does not reimburse you.

Robinhood is also regulated by the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC). These agencies set rules about how Robinhood must operate and what disclosures it must make to customers.

How trading actually works on the platform

When you place a trade on Robinhood, you're sending an order to buy or sell a security. For stocks and ETFs, your order usually executes within seconds during market hours (9:30 a.m. to 4 p.m. Eastern time on weekdays). Robinhood also offers extended-hours trading (4 a.m. to 8 p.m. Eastern) if you have Robinhood Gold, though prices are less stable and spreads are wider during those times.

For options and cryptocurrencies, the mechanics are different. Options trades execute during market hours, and the price depends on what other traders are willing to pay. Cryptocurrencies trade 24/7, so you can buy or sell Bitcoin at any time, though Robinhood's prices include a spread that's wider than you'd find on a dedicated crypto exchange.

Frequently Asked Questions

Is my money safe in a Robinhood account?

Your account is insured by SIPC up to $500,000 if Robinhood fails, but this does not protect you from investment losses. If a stock price falls, you lose money — that's not Robinhood's fault, and SIPC doesn't cover it. Robinhood is also regulated by the SEC and FINRA, which set rules about how the company must operate.

Can I lose more money than I deposit?

With a standard account, no — you can only lose what you've invested. If you use margin (borrowed money), you can lose more than your deposit because you're trading with borrowed funds. Margin trading requires Robinhood Gold and approval from Robinhood based on your experience and income.

What happens if I don't use my account for a long time?

Robinhood does not charge inactivity fees, so your account will remain open even if you don't trade for months or years. Your cash will sit in your account earning a small amount of interest. If you want to close the account, you can withdraw all your money and request account closure through the app.

Can I trade on weekends or after market hours?

Standard Robinhood accounts can only trade during regular market hours (9:30 a.m. to 4 p.m. Eastern, Monday through Friday). Robinhood Gold members can trade during extended hours (4 a.m. to 8 p.m. Eastern), though prices are less stable and spreads are wider. Cryptocurrencies trade 24/7 on Robinhood.

What's the difference between a Robinhood account and a bank account?

A bank account holds cash and may earn interest; a Robinhood account holds cash and investments. Money in a bank account is insured by the FDIC up to $250,000. Money in a Robinhood account is insured by SIPC up to $500,000, but only against Robinhood's failure — not against investment losses. A Robinhood account is for buying and selling securities, not for everyday spending.