What is Robinhood?
Founded by Vladimir Tenev and Baiju Bhatt in 2013, the Menlo Park, California-based Robinhood, is one of the most popular free-trading apps in the market today. It has established itself as one of the most popular apps among millennial investors for trading cryptocurrency, stocks, exchange-traded funds, and options.
Initially, Robinhood was the only app in the market that offered free trades to brokers. Soon other trading applications followed suite and started offering commission-free trading. Yet, Robinhood was successful in carving a niche for itself. In fact, Robinhood is among the handful of major players offering cryptocurrency trading along with stock trading.
Robinhood Crypto Service
Robinhood’s crypto service began in February 2018, when Robinhood started offering Bitcoin and Ethereum, the two largest cryptocurrencies by market cap, for trading. You will get instant access to up to $1000 of your funds for crypto trading on Robinhood if you are a Robinhood Instant account user. You can also use the funds that you will receive after selling your ETF, options, and Stocks on Robinhood to purchase crypto, but only after three business days.
No Account Minimums
The interesting thing about Robinhood is that it does not have any account minimums for its users. Thus, users can start trading on Robinhood right away if they have enough funds to purchase their desired stock or cryptocurrency. But Robinhood has to comply with Financial Industry Regulatory Authority regulation, and hence, they require a $2,000 minimum portfolio balance from its users to open a margin account.
Types of Robinhood Accounts
There are three types of Robinhood accounts - Robinhood Instant, Robinhood Gold, and Robinhood Cash.
Robinhood Instant Account
A new Robinhood user begins with a Robinhood Instant account. It enables a user to access instant deposits and extended-hours trading. They won't have to wait for their funds after selling their stocks or making a deposit.
Robinhood Gold Account
A user who upgrades to a Robinhood Gold account will benefit from larger instant deposits & more buying power, along with all the features of a Robinhood Instant account.
Robinhood Cash Account
Users with Robinhood cash account can place commission-free trades during the standard and extended-hours trading sessions. But they do not have access to instant deposits or instant settlements. If a Robinhood cash account holder desires, they can downgrade their account to an Instant or Gold account at any time.