Robinhood offers a Roth IRA with no account minimum and commission-free stock and ETF trades, but it lacks mutual funds, robo-advisor services, and phone support
Robinhood's Roth IRA lets you invest in stocks, ETFs, options, and cryptocurrencies without paying per-trade commissions. There is no account minimum to open one. If you want to buy individual stocks or trade frequently without fees eating into your returns, Robinhood can work. But Robinhood does not offer mutual funds, does not have a robo-advisor option, and its customer service is chat and email only — there are no phone representatives or in-person advisors. Whether it is "good" depends on what you plan to invest in and how much support you want along the way.
Most other major brokers — Fidelity, Vanguard, Charles Schwab, E-Trade — now offer commission-free trades too. The real differences lie in what else they provide and how they serve you when you need help.
Key Takeaways
- Robinhood charges no commissions on stock and ETF trades and has no account minimum, making it cheap to start small.
- Robinhood does not offer mutual funds or robo-advisor services, so you must pick individual investments yourself.
- Customer support is chat and email only — there are no phone representatives or in-person advisors.
- Other brokers like Fidelity and Vanguard offer mutual funds, lower-cost index funds, and phone support, which may matter more than zero commissions if you are new to investing.
- The 2024 contribution limit is $7,000 per year for people under 50, regardless of which broker you use.
What Robinhood's Roth IRA actually includes
Robinhood lets you hold stocks, exchange-traded funds (ETFs), options contracts, and cryptocurrencies inside a Roth IRA. You can buy and sell any of these without paying a commission per trade. There is no minimum deposit to open the account, and there are no monthly or annual account fees.
What Robinhood does not offer: mutual funds, index funds managed by Robinhood itself, fractional shares in most cases, or a robo-advisor (an automated service that builds and rebalances a portfolio for you). If you want to own a diversified fund that tracks the S&P 500 or the total stock market, you have to buy an ETF that does that, not a mutual fund. This is a real constraint if you prefer the simplicity of a single fund holding hundreds of stocks.
Robinhood versus other major brokers
Most large brokers — Fidelity, Vanguard, Charles Schwab, E-Trade — also offer commission-free stock and ETF trades now. The real differences are in what else they provide and how they support you.
| Feature | Robinhood | Fidelity | Vanguard | Charles Schwab |
|---|---|---|---|---|
| Commission-free stock trades | Yes | Yes | Yes | Yes |
| Mutual funds available | No | Yes | Yes | Yes |
| Robo-advisor | No | Yes (Fidelity Go) | Yes (Personal Advisor Services) | Yes (Schwab Intelligent Portfolios) |
| Phone support | No | Yes | Yes | Yes |
| Account minimum | $0 | $0 | $0 | $0 |
| Crypto trading in Roth IRA | Yes | No | No | No |
Fidelity and Schwab have phone support and offer mutual funds, which means you can buy a single fund that holds hundreds of stocks instead of picking individual companies. Vanguard is owned by its investors and is known for low-cost index funds. Robinhood's main advantage is that it lets you trade crypto inside a Roth IRA, which the others do not.
Who Robinhood works well for
Robinhood is a reasonable choice if you plan to invest in ETFs or individual stocks and you do not need help building a portfolio. Many people successfully use Robinhood to buy and hold a simple mix of index ETFs — for example, a U.S. stock ETF and an international stock ETF — and never touch the account again. The zero commissions and zero minimum mean you can start with $100 if you want.
Robinhood also works if you want to trade crypto inside a tax-sheltered account. No other major broker offers this in a Roth IRA, so if that is your goal, Robinhood is the only option. You can buy and hold Bitcoin, Ethereum, or other cryptocurrencies and let them grow tax-free until you withdraw them in retirement.
Who should look elsewhere
If you are new to investing and want guidance, Fidelity or Schwab are better choices. Both have robo-advisors that will build a diversified portfolio for you based on your age and risk tolerance, and both have phone support if you get stuck. Fidelity's robo-advisor charges nothing for accounts under $25,000.
If you want to own mutual funds — particularly Vanguard's index funds, which have some of the lowest costs in the industry — you need to open your Roth IRA at Vanguard or another broker that carries them. Robinhood does not offer mutual funds at all. This matters because some investors prefer the simplicity and diversification of a single mutual fund over building a portfolio of individual ETFs.
If you prefer to talk to a person on the phone when you have questions, Robinhood is not for you. Its only support channels are chat and email. This can be frustrating if you need immediate help or prefer a conversation to troubleshoot a problem.
How to move money into and out of a Robinhood Roth IRA
You can transfer money from your bank account into your Robinhood Roth IRA using an electronic bank transfer, which usually takes one to three business days. Robinhood will send you the routing and account numbers you need. You can also set up recurring transfers if you want to contribute a fixed amount each month.
You can also roll over money from another Roth IRA or from a traditional IRA (though rolling a traditional IRA into a Roth IRA has tax consequences — consult a tax professional before doing this). Robinhood will provide the forms and walk you through the process via chat. Withdrawals work the same way as at any other broker: you can withdraw your contributions at any time without penalty, but earnings can only come out after age 59½ without a penalty (with narrow exceptions). The withdrawal goes back to your bank account within a few business days.
The annual contribution limit and other rules
The 2024 contribution limit for a Roth IRA is $7,000 per year if you are under 50, and $8,000 if you are 50 or older. This limit applies no matter which broker you use — it is a federal rule, not a Robinhood rule. You can only contribute money you earned from work (W-2 wages, self-employment income, etc.), not investment returns or gifts.
If your income is above a certain threshold, you cannot contribute to a Roth IRA at all. The income limits change each year and depend on your filing status. For 2024, the limit phases out between $146,000 and $161,000 for single filers, and between $230,000 and $240,000 for married couples filing jointly. Check the IRS website or ask a tax professional if you are close to these numbers.
Frequently Asked Questions
Can I move my Roth IRA from Robinhood to another broker later?
Yes. You can do a direct transfer (the brokers move the money between themselves) or an indirect rollover (you withdraw the money and deposit it elsewhere within 60 days). A direct transfer is simpler and has no tax consequences. Contact the new broker and ask them to initiate the transfer — they will handle most of the paperwork.
Does Robinhood charge fees for holding a Roth IRA?
No. There are no monthly fees, annual fees, or inactivity fees. You only pay commissions on trades, and Robinhood charges zero commissions on stocks and ETFs. Options trades and crypto trades may have spreads (the difference between buy and sell prices), but no explicit fees.
What happens if I sell a stock in my Robinhood Roth IRA and buy another one?
Nothing special. You can buy and sell as many times as you want without paying commissions or triggering taxes. That is the whole point of a Roth IRA — the money grows tax-free inside the account, and you do not owe taxes on gains when you sell.
Is my money safe if Robinhood goes out of business?
Yes. Robinhood is a brokerage, and brokerages are required to hold customer assets separately from their own money. If Robinhood failed, the Securities Investor Protection Corporation (SIPC) would protect your account up to $500,000. Your Roth IRA assets belong to you, not to Robinhood.
Can I use Robinhood if I have a 401(k) at work?
Yes. A Roth IRA is separate from a 401(k). You can have both. However, if your income is high enough that you have access to a 401(k) at work, you may hit the Roth IRA income limits mentioned above. Talk to a tax professional if you earn over $150,000 per year.