Trading fees on Robinhood
Investing with a Robinhood investing account is commission free. We don’t charge you fees to open or maintain your account.
However, the following regulatory organizations charge Robinhood fees for trading that we do pass on to you to cover our costs:
Regulatory transaction fee
Regulatory transaction fee
FINRA is required to pay this fee to the Securities and Exchange Commission (SEC) by law. To generate the funds necessary to do so, FINRA passes the fee on to its members, and many of these members, including Robinhood, pass the fee on to the customers. The fee is ultimately intended to cover the costs incurred by the government, including the SEC, for supervising and regulating the securities markets and securities professionals. The rate is subject to annual and mid-year adjustments.
As of May 22, 2024, the SEC fee is $27.80 per $1 million of principal (only for sell orders), which is rounded up to the nearest penny. Robinhood doesn’t pass this fee on to you for sales with a notional value of $500 or less.
Keep in mind
Option orders incur both the passthrough SEC fee and the FINRA trading activity fee (TAF) regardless of the sale order value.
FINRA charges this fee to brokerage firms like Robinhood to recover the costs of supervising and regulating these firms. We pass this fee to our customers, except for sales of 50 shares or less.
As of January 1, 2024, the TAF is $0.000166 per share (equity sells) and $0.00279 per contract (options sells). This fee is rounded up to the nearest penny, which will be no greater than $8.30 per trade. Keep in mind, you may be charged more than the $8.30 fee because the fee limit is based on the execution of your order, which can occur with multiple trades.
Note
The SEC fee and the TAF are set by law and regulation that are subject to change without notice. Review our fee schedule before placing trades in your account.
American depositary receipt fee
American depositary receipt fee
American depositary receipts (ADRs) are certificates that represent foreign stocks that you can trade on U.S. stock markets. The banks issuing these certificates may charge custodial fees that typically range from $0.01-$0.03 per share.
Options regulatory and exchange fees
Options regulatory and exchange fees
The Options Clearing Corporation (OCC) collects an Options Regulatory fee (ORF) that the U.S. options exchanges assess their members in connection with options transactions.
The ORF varies by options exchange, where an options trade executes, and whether the broker who’s responsible for the trade is a member of a particular exchange.
The OCC also charges a clearing fee for their central counterparty clearing and settlement services to 16 exchanges.
These fees are industry standard. The purpose of these fees is to recover a portion of the costs related to the OCC’s supervision and regulation of the options markets.
Starting on or after October 23, 2023, we'll start collecting a combined $0.03 fee for each options contract traded to cover our costs for these fees.
Note
Robinhood calculated the combined fee based on an average of what we typically remit to the exchanges. The fee charged by Robinhood may differ from or exceed the actual fee we paid in connection with any transaction. Our fee schedule has more details.
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FAQs
Trading activity fee
This fee is rounded up to the nearest penny, which will be no greater than $8.30 per trade. Keep in mind, you may be charged more than the $8.30 fee because the fee limit is based on the execution of your order, which can occur with multiple trades.
What are the hidden fees on Robinhood? ›
Despite offering zero-commission trades, Robinhood DOES pass on specific regulatory fees to its users. These include the Trading Activity Fee (TAF) and the Regulatory Transaction Fee, which are mandatory fees charged by regulatory bodies like FINRA and the SEC and are not marked up by Robinhood.
Is there a fee for withdrawing money from Robinhood? ›
There's no fee for bank transfers. However, instant withdrawals to a debit card or bank account can incur up to a 1.75% fee.
Is Robinhood good for day trading? ›
Absolutely! As long as you abide by the FINRA regulations for pattern day trading, then you can trade to your heart's content with Robinhood's zero-commission trading policy. Robinhood allows users to day trade stocks, ETFs, stock options contracts, and even cryptocurrencies with no trading fees.
How do I avoid Robinhood fees? ›
This means that for Cash Management, we don't charge:
- Maintenance fees: We don't charge fees to open, close, or maintain an individual investing account.
- In-network ATM fees: As long as you use 1 of the 90,000+ ATMs in the Allpoint or MoneyPass networks, you won't pay any fees.
Inactivity fee $0 No fee for inactivity. Replacement card $0 No fee for replacement card. Your funds will be held at or transferred to JP Morgan Chase Bank, N.A. an FDIC-insured institution.
Is trading on Robinhood actually free? ›
Investing with a Robinhood investing account is commission free. We don't charge you fees to open or maintain your account.
What are the criticism of Robinhood? ›
No mutual funds or bonds: The lack of mutual funds and bonds may make it difficult to build a truly diversified portfolio. Customers can only access bonds via bond ETFs. Limited customer support: Robinhood has made noticeable improvements to its customer service, but it's still not on par with other brokerages.
How does Robinhood make money without fees? ›
Robinhood is an online discount brokerage that offers a commission-free investing and trading platform. In 2023, the company generated the majority of its revenue from its net interest revenues segment due to the favorable interest rate environment. Payment for order flow also contributed largely to revenues.
Is Robinhood good for beginners? ›
Getting started with Robinhood
Don't worry, we've gathered all the essential details to help you make the right decision. The good news is that Robinhood is in fact perfect for beginners. As a Broker Analyst at BrokerChooser, I'm dedicated to providing data-driven insights that simplify the world of investments.
One of the biggest misconceptions about investing is that you need a ton of money. That's not true at all. You can start with a fraction of a share and add to it when you can. Even $500 is more than enough, and it can grow to thousands of dollars if you pick a good investment and give it time.
How much does it cost to cash out stocks on Robinhood? ›
External debit card account: Withdrawals have up to a 1.75% fee based on the amount being transferred out. You'll see the calculated fee when you initiate the withdrawal, so you'll know the amount up front.
Why do you need 25k to day trade? ›
Why Do You Need 25k To Day Trade? The $25k requirement for day trading is a rule set by FINRA. It's designed to protect investors from the risks of day trading. By requiring a minimum equity of $25k, FINRA ensures that investors have enough capital to absorb potential losses.
What happens if I do 4 day trades on Robinhood? ›
Pattern Day Trade (PDT) Protection alerts you as you place your 2nd, 3rd, and 4th day trades in a 5 trading day period in an effort to help you avoid being flagged as a pattern day trader (PDT). On the 2nd and 3rd day trades, you'll be given a few options to help avoid getting flagged.
How to be a day trader without 25k? ›
Day trading on Robinhood without having a minimum account balance of $25,000 is possible by utilizing a cash account, being selective with trades, considering options trading, exploring swing trading strategies, and focusing on education and risk management.
Does Robinhood still give free stock? ›
Robinhood gives free stock to U.S. citizens who link their bank account or debit card. The Robinhood stock price depend on market conditions and is determined by available stocks. You can choose to cash out or keep your free stock. If you decide to keep it, the amount will be reported on your tax return if applicable.
What is better, etrade or Robinhood? ›
E*TRADE is a better option for more active traders, while Robinhood is a satisfying option for new and passive investors.
Why is e-trade charging me a commission? ›
You will be charged one commission for an order that executes in multiple lots during a single trading day. Orders that execute over more than one trading day, or orders that are changed, may be subject to an additional commission.
Why is Fidelity better than Robinhood? ›
Fidelity's fee structure is somewhat different, as this platform offers significantly more products and services than Robinhood. Fidelity doesn't charge trading fees or commissions on stocks and ETFs. However, unlike Robinhood, it does charge $0.65 per contract to trade most options.
