Robinhood IRA Review 2024: Features, Fees, and More

Fees

Robinhood offers fee-free trading (i.e., they don’t charge an exchange commission) on stocks and ETFs. They also don’t charge account maintenance fees or account opening fees, and they have a $0 account minimum.

However, if you partake in options trading, make an outgoing wire transfer, or other actions, Some fees may apply. You can check out their entire fee schedule online.

Along with its free service, you can also choose to upgrade to Robinhood Gold, the platform’s premium subscription product. Robinhood Gold offers users a cash management account (similar to a high-yield savings account and covered by FDIC insurance up to $2.25 million through partner banks) as well as unlocking the higher 3% IRA match opportunity. The first month of Gold is free, but it costs $5 per month thereafter.

What You Can Invest In

Robinhood allows users to invest in individual stocks as well as a wide selection of ETFs. This allows users to create their own customized portfolios with investment options of their choosing.

Robinhood also offers users the ability to get a professionally recommended portfolio. These portfolios include 6-9 exchange-traded funds (ETFs) that are constructed by Robinhood’s investment strategy team, using a combination of an algorithm and research. The recommendation matches you to a portfolio that makes sense for you, based on your profile.

Along with these, Robinhood also provides options trading and crypto, with a wide range of coins and currencies available including Bitcoin, Ethereum, Dogecoin, and more.

Limitations

Account Minimums

Robinhood doesn’t specify an account minimum for any of its users—even gold members can have $0 in their account, so long as they pay the $5 monthly fee. (Although, of course, having nothing in your account means you have nowhere to grow.)

Customer Support

While Robinhood offers a well-populated help center with articles that can help investors troubleshoot issues on their own, customer support can be a little harder to get ahold of. Rather than publishing a customer support line directly, the platform requires users to request a phone call through the app or its browser interface. An online chat feature is also available.

Robinhood does not offer access to live financial advisory services, even if you upgrade to Robinhood Gold.

Account Types

Along with brokerage accounts, Robinhood offers the two most common types of individual retirement accounts: the traditional IRA and a Roth IRA account option. Let’s take a closer look.

Traditional IRA

Traditional IRAs are seeded with pre-tax money. That means that in the year you make the contributions, they money you put into your IRA account (up to the IRA contribution limit) will not count toward your taxable income. Of course, once you take the money back out again in retirement, plus its earnings, you’ll pay income taxes on the withdrawals just like regular income.

Roth IRA

With a Roth IRA, taxes are paid on contributions. So while you won’t get a tax break upfront, you will get access to tax-free retirement income down the line. Additionally, Roth IRAs aren’t subject to required minimum distributions, so funds can sit in the account for the original account holder’s entire lifetime and grow.

However, along with the regular IRA contribution limits, Roth IRAs are also subject to income eligibility requirements that may limit whether or not you can contribute directly to a Roth. Still have questions? We’ve got you covered.

Other Features

Robinhood’s 1% match can help you boost your retirement savings. Since the match isn’t counted towards your annual contribution limits and is applicable for 401(k) rollovers and IRA transfers, there’s no limit on the match amount you can earn.

There is, however, an important caveat. While the match should hit your account as soon as your contribution settles, you’ll need to keep at least as much money as that contribution in your account for five years in order to withdraw the match without paying an Early Match Removal Fee. The amount of the fee depends on how much you withdraw and when, but in many cases, the Early Match Removal Fee renders the original match almost negligible. (This fee may also apply to required minimum distributions or RMDs).

Along with its typical investment accounts, Robinhood also offers its Cash Card, a debit card that helps you invest as you spend on everyday purchases. The debit card is linked to a cash account that is covered by FDIC insurance for up to $250,000 per depositor. You can also set it up so that a portion of each paycheck is automatically invested in stocks or crypto.

Considering a Robinhood IRA?

Robinhood has been a pioneer in the investing space for years and continues the trend with the introduction of Robinhood retirement accounts. Their IRA product is a strong fit for many types of investors, whether you want to pick your own investments or get a custom-recommended portfolio. Robinhood is the only IRA on the market right now that offers an annual matching contribution, which, although limited by the annual contribution limit, can help users get ahead with their retirement savings.

Robinhood is transparent with its fee structure, and most of its fees are low or nonexistent, such as its $0 commission fees on ETFs and stocks. Robinhood also offers very intuitive interfaces on both mobile and web, which is useful for managing your investments no matter where you are. However, you won’t be able to interact with a live advisor, and its customer service team can be a little hard to reach.

If you’re looking to fund your new Robinhood IRA with a 401(k) rollover, Capitalize can help. We’ve made it our mission to make this process easier for everyone. We can handle the entire process for you. Most of the process can be done online and our rollover experts will guide you through any of the manual parts. Get started with your 401(k) to IRA rollover in just a few minutes.