Robinhood Securities is the brokerage company behind the Robinhood app

Robinhood Securities is the licensed brokerage firm that holds your money and executes your trades when you use the Robinhood mobile app. It is a separate legal entity from Robinhood Markets, the parent company, and it is regulated by the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC). When you open an account through the Robinhood app, you are opening an account with Robinhood Securities, which means they are responsible for keeping your cash and securities safe and following federal rules about how they handle customer funds.

The app is the interface you see and tap on. Robinhood Securities is the infrastructure behind it — the company that actually holds your money in a brokerage account, processes your buy and sell orders, and keeps records of what you own. You do not interact with Robinhood Securities directly most of the time; you interact with the app. But when something goes wrong, or when you need to understand who is responsible for your account, Robinhood Securities is the legal entity you are dealing with.

Key Takeaways

  • Robinhood Securities is a licensed brokerage firm regulated by FINRA and the SEC, not a bank or investment advisor.
  • Your cash and securities are held by Robinhood Securities, which means they are protected under SIPC insurance up to $500,000 per account type.
  • Robinhood Securities executes your trades and keeps your account records, but the Robinhood app is what you use to place orders.
  • Robinhood Securities charges no commission on stock and options trades, but does earn money through other means like payment for order flow.

How Robinhood Securities holds and protects your money

When you deposit cash into your Robinhood account, that money goes to Robinhood Securities. The firm is required by law to keep customer cash and securities separate from its own money — this is called the customer protection rule. If Robinhood Securities were to fail financially, your account would be protected by the Securities Investor Protection Corporation (SIPC), which insures up to $500,000 per account type (cash accounts and margin accounts are separate).

SIPC insurance covers the value of your securities and cash, but it does not cover losses from bad trades or market declines. It covers losses if the brokerage itself fails and cannot return your assets. Robinhood Securities also carries additional insurance beyond SIPC through private insurers, which extends coverage in some cases, though the details vary.

Your securities — stocks, options, ETFs, and other investments you buy — are held in your name at Robinhood Securities. You own them; the firm is the custodian. If you want to move your account to another brokerage, you can request a transfer, and Robinhood Securities will send your securities to the new firm.

What Robinhood Securities does and does not do

Robinhood Securities executes trades, holds your account, and provides the infrastructure for buying and selling stocks, options, ETFs, and cryptocurrencies. It does not provide investment advice. The Robinhood app shows educational content and market data, but Robinhood Securities itself is not your financial advisor, and nothing in the app should be read as a recommendation to buy or sell.

Robinhood Securities also does not charge commission on stock and options trades — this is a business choice, not a legal requirement. The firm makes money through other channels: payment for order flow (selling information about your orders to market makers), margin interest (if you borrow money to trade), and premium features like Robinhood Gold (a subscription service). These revenue streams mean Robinhood Securities has an incentive to encourage trading, which is worth understanding before you use the platform.

The difference between Robinhood Securities and Robinhood Markets

Robinhood Markets is the parent company that owns Robinhood Securities and the Robinhood app. Robinhood Markets also owns Robinhood Crypto, which is a separate platform for buying and selling cryptocurrencies. When you see "Robinhood" in the news or in app store listings, the article or listing is usually referring to Robinhood Markets as the overall company.

Robinhood Securities is the regulated brokerage — the entity with the FINRA license and the SEC registration. It is the part of the company that actually holds your money and executes your trades. Understanding this distinction matters if you ever need to file a complaint or understand who is legally responsible for your account.

Account types and what Robinhood Securities offers

Robinhood Securities offers several account types: individual cash accounts, individual margin accounts, joint accounts, and retirement accounts (IRAs). Each account type has different rules about what you can trade and how much you can borrow. A cash account means you can only trade with money you have already deposited. A margin account lets you borrow money from Robinhood Securities to trade, but you pay interest and face the risk of a margin call if your account value drops.

Retirement accounts held at Robinhood Securities follow the same tax rules as retirement accounts at any other brokerage — contributions may be tax-deductible, and withdrawals before age 59½ may trigger penalties. Robinhood Securities does not provide tax advice, so you should consult a tax professional about how your trades and account type affect your taxes.

Regulatory oversight and what it means for you

Robinhood Securities is regulated by FINRA, which sets rules about how brokerages must treat customers, what disclosures they must make, and how they must handle disputes. The SEC oversees the securities markets and has authority over Robinhood Securities' compliance with federal securities laws. The Financial Crimes Enforcement Network (FinCEN) and the Consumer Financial Protection Bureau (CFPB) also have oversight roles.

This regulatory structure means Robinhood Securities must follow rules about account security, record-keeping, and customer protection. If you have a dispute with the firm, you can file a complaint with FINRA's arbitration process or with the SEC. You can also file a complaint with your state's securities regulator. These are your formal channels if something goes wrong.

Frequently Asked Questions

Is my money safe at Robinhood Securities?

Your cash and securities are protected by SIPC insurance up to $500,000 per account type, and Robinhood Securities is required to keep customer funds separate from its own money. This does not protect you from market losses or bad trades, only from the brokerage failing. Additional private insurance also covers some scenarios beyond SIPC limits.

Does Robinhood Securities give investment advice?

No. Robinhood Securities is a brokerage, not an investment advisor. The educational content and market data in the app are informational only and should not be read as recommendations. If you want personalized investment advice, you need to work with a registered investment advisor, which is a different type of firm.

Can I transfer my account to another brokerage?

Yes. You can request an account transfer (called an ACAT transfer) to move your securities to another brokerage. Robinhood Securities will send your holdings to the new firm. The process usually takes a few business days, and you may face a transfer fee from either brokerage, though many firms waive this fee.

What happens if Robinhood Securities goes out of business?

SIPC would step in to return your securities and cash up to $500,000 per account type. SIPC does not may provide the value of your investments, only that your assets will be returned. The process can take weeks or months, which is why SIPC insurance exists — to protect you during that time.

How does Robinhood Securities make money if there are no commissions?

Robinhood Securities earns revenue through payment for order flow (selling data about your trades to market makers), margin interest (if you borrow to trade), subscription features like Robinhood Gold, and cryptocurrency trading fees. This means the firm benefits when you trade more frequently, which is worth keeping in mind as you decide how often to buy and sell.