Robinhood Review 2025
The app that made trading free. 3% IRA match, $0 options, dead-simple interface. But also PFOF controversies and SEC fines. Here's the full picture.
Recent Regulatory Issues
In September 2024, Robinhood paid $45 million to settle SEC charges related to order execution, record-keeping, and other violations. While these don't affect account safety (SIPC insured), they reflect ongoing regulatory scrutiny.
The Bottom Line
Robinhood revolutionized retail trading by making it free and accessible. Their 3% IRA match is genuinely industry-leading, and the app experience is unmatched for simplicity.
But the controversies are real: heavy reliance on payment for order flow, multiple SEC fines, and the GameStop trading restrictions left a bad taste. Robinhood is a fine broker for casual investors—just understand the trade-offs.
What Robinhood Does Best
3% IRA Match (Gold)
With Robinhood Gold ($5/month), you get 3% matching on IRA contributions. On the $7,000 annual limit, that's $210 in free money. This is genuinely disruptive—traditional brokers offer nothing.
Simplest Interface
Robinhood's app is beautiful and intuitive. No clutter, no confusing menus. For someone who just wants to buy stocks without a learning curve, nothing beats it.
Free Options Trading
Most brokers charge $0.50-$0.65 per options contract. Robinhood is $0. For active options traders, this adds up to real savings.
Crypto + Stocks in One App
Trade 30+ cryptocurrencies alongside stocks without switching apps. Robinhood Wallet even lets you transfer crypto out (unlike some competitors).
5.75% Margin Rate (Gold)
Better than Fidelity (10.575%) or Schwab (10%). Not the lowest (Public is 4.9%), but competitive for a mainstream broker.
Where Robinhood Falls Short
Payment for Order Flow
Robinhood made ~$943 million from PFOF in 2024. This represents about 70% of their transaction revenue. Your orders go to Citadel and other market makers—not exchanges. The execution quality trade-off is real, if small for casual investors.
SEC Fines & Regulatory Issues
The $45 million SEC settlement in 2024 wasn't the first. Previous issues include:
- $70 million FINRA fine (2021) for outages and misleading customers
- $65 million SEC settlement (2020) for misleading customers about revenue sources
- GameStop trading restrictions (2021) that sparked Congressional hearings
No other major broker has this regulatory track record.
Minimal Customer Service
There's no phone number. Support is chat-only, often with long waits. If something goes wrong, getting help is frustrating.
Basic Research & Tools
Robinhood offers basic charts and news. Compare this to Fidelity's 20+ research providers or Schwab's thinkorswim platform—Robinhood is not for serious analysis.
Fees & Pricing
| Fee Type | Cost |
|---|---|
| Stock/ETF Trades | $0 |
| Options | $0 |
| Margin Rate (Gold) | 5.75% |
| Cash APY (Gold) | 3.25% |
| IRA Match (Gold) | 3% |
| Gold Subscription | $5/month |
| Outgoing Transfer | $100 |
Robinhood Gold: Worth It?
At $5/month ($60/year), Gold pays for itself if you:
- Contribute to an IRA (3% match = $210/year on max contribution)
- Keep $2,000+ cash (3.25% vs standard rates)
- Use margin ($1,000 included free)
For most users opening an IRA, Gold is a no-brainer. The match alone is worth 3x the annual cost.
Who Should Use Robinhood
- Young investors opening their first IRA (3% match)
- Mobile-first traders who want simplicity
- Options traders who want zero fees
- Crypto enthusiasts who want stocks + crypto together
- Anyone who values simplicity over advanced features
Who Should Look Elsewhere
- Large account holders: Fidelity's service and execution are better
- Research-driven investors: Robinhood's tools are too basic
- Anyone who needs phone support: It doesn't exist
- Those concerned about PFOF: Fidelity or Public don't sell orders
The Verdict
Robinhood is a solid broker with real advantages (3% IRA match, free options, great app) and real concerns (PFOF reliance, regulatory issues, no phone support).
For a Roth IRA where you want the match, Robinhood is compelling. For your main taxable brokerage account, especially with significant assets, you might be better served by Fidelity's execution quality and service.