Robinhood Review 2020 (Is It Available In Australia?)

Robinhood is one of the most popular commission-free stockbrokers in the United States. It was the first stockbroker to offer commission-free trading—which made it an instant hit!

Today, I'll be reviewing the platform and explaining how it works so you know whether or not to keep an eye on it for the future.

Is Robinhood Available in Australia?

Robinhood is not available in Australia yet. At this stage, Robinhood is only available in the US. We do know that Robinhood is coming to Australia, but we are not sure when, as they have not made any formal announcements about it.

I will be sure to let you know when I do!

Robinhood Review 2020

Robinhood offers commission-free stock, ETF and options trades. Robinhood was the only platform to offer commission-free trading until recently.

Today, large American banks and brokerages such as Bank of America, JP Morgan Chase, and TD Ameritrade are offering commission-free trading. 

Robinhood's barebones trading platform and free cryptocurrency trading continue to help it stand out from the rest.

Robinhood Is Best For:

  • Free trading
  • Easy-to-use platform
  • Mobile users
  • Cryptocurrency
  • Margin accounts

Robinhood Strengths

Commissions: You can't complain about free trading. For years investors have been used to paying fees for every trade they make. Robinhood put a stop to this in April of 2013. 

Americans are now saving money on their stock, options, ETF and cryptocurrency investments. Zero-fee trading ultimately means investors can make higher returns without taking on more risk.

Robinhood does however have a $75 outgoing fee. This basically means you have to pay $75 if you want to transfer your portfolio to another broker. 

Robinhood Gold: Robinhood also has a margin lending service called Robinhood Gold. This gives you the ability to trade on margin (trading with borrowed money). 

This carries a flat fee of $5/month and you'll have to pay 5% interest annually if you borrow more than $1000. You'll pay 5% annually on the amount of money you use above $1000.

Account Minimums: Robinhood doesn't have an account minimum so you can get started now. This is great for young investors who don't have a lot of cash but want to start investing.

Dividend Reinvestment Plan (DRIP): You can automatically reinvest dividend payments back into the stock or ETF that you have purchased. 

Dividend reinvestment is easy to set up with Robinhood. Simply go to Account (the person icon) > Investing > Dividend Reinvestment.

Savings Account: Robinhood has a savings account that pays an interest rate of 0.30%.

Robinhood doesn't actually pay the interest, they move your money into their network of FDIC insured program banks that hold and invest your cash.

These FDIC insured program banks pay interest on deposits, which you receive as part of Robinhood's Cash Management.

Easy-to-use: It's easy to start investing with Robinhood, and you can sign up in only a few minutes. You’ll receive an email within one trading day either confirming your application’s been approved—otherwise they will be asking for a little bit more information.

The signup process will ask you a few basics questions. You'll have to provide your Social Security Number, and bank information (which you can set up later if you want).

You can instantly deposit up to $1,000. Deposits over $1,000 could take up to five business days to process.

Streamlined Interface: This could be either an advantage or disadvantage depending on what you want out of the platform. 

Robinhood doesn't have all the features that many bigger brokers have. Robinhood is basically just a place for you to quickly invest money in stocks without paying fees.

Robinhood Weaknesses

Limited Trade Offerings: Robinhood only offers share trading. You cannot invest in mutual funds or bonds on this platform.

One Account Type: Robinhood only offers a taxable investment account (a fancy term for brokerage account). They do not offer any sort of IRA accounts.

Customer Support: Robinhood does not have phone customer support. They have a vast help centre which is full of information to help you get on your way.

If you look through the help centre and still find yourself stuck you will have to contact them via email.

Should You Consider Robinhood In the Future?

If you want a streamlined trading platform that is easy to use, Robinhood would be a solid choice.

Alternatives to Robinhood 

If you don't want to wait for Robinhood to come to Australia and you want to invest in US stocks now, you have an option. And that is Stake.com.au.

Stake.com.au is a commission-free trading platform that gives Aussies access to over 3500 US stocks and ETFs.