Introduction on Robinhood Account
Robinhood Account is an online investing platform offering commission-free trading on several US-listed investment types, with high-yield cash management offerings, margin trading, and access to initial public offering (IPO) investments.
Robinhood was founded in 2013 by two former Stanford roommates, Vlad Tenev and Baiju Bhatt. It was launched with a desire to expand access to the market by reducing barriers to entry, the platform quickly found a home with young, tech-friendly traders thanks to a simple design and intuitive trading experience.
It’s clear that Robinhood’s brand has struck a chord, with more than 11.4 million monthly active users and $62 billion in assets under custody as of December 31, 2022.
No-fee and no-minimum trading makes it easy for beginners to get started with investing, and the ability to trade fractional shares gives users access to a greater range of assets than they might otherwise be able to afford.
The platform provides a simple menu of assets such as stocks, ETFs, and direct cryptocurrency trading, further streamlining the app and trading experience.
Originally, the company’s biggest differentiator was fee-free trading; however, many competitors have since lowered their fees in response.
Robinhood is not a bank, so it doesn’t offer FDIC insurance itself. As with most cash management accounts, The Cash Management deposits are insured well beyond traditional FDIC limits through a deposit sweep program.
As customers deposit funds, the funds are swept to partner banks where the money is insured up to $250,000 per bank (including deposits already held in the bank), for a maximum of $1.25 million. Robinhood’s partner banks include:
- Goldman Sachs Bank USA
- HSBC Bank USA, N.A.
- Wells Fargo Bank, N.A.
- Citibank, N.A.
- Bank of Baroda
- S. Bank, N.A.
Who is Eligible for a Robinhood Account
- Be 18 years or older to have an Robinhood Account.
- Have a valid Social Security Number (not a Taxpayer Identification Number).
- Bank information to fund the account.
- Have a legal U.S. residential address within the 50 states or Puerto Rico (exceptions may apply for active U.S. military personnel stationed abroad).
- Be a U.S. citizen, U.S. permanent resident, or have a valid U.S. visa.
How to set-up a Robinhood Account
- Set-up an account: You will have to create a account for yourself on Robinhood. A username and a password will be needed for creating an account.
- Enter your contact information: You will be given a place to put some of your personal information needed for you to set-up an account. Like your home mailing address and phone number. You’ll also be asked whether you, or a member of your immediate family, are employed by a member firm of a stock exchange or the Financial Industry Regulatory Authority (FINRA).
- Verify your identity: This is the point you will have to verify all the information you must have said to make sure it’s all correct. Then Robinhood will ask for your Social Security number.
All broker dealers are required by law to collect Social Security numbers, and Robinhood says, “This information is used to prevent known money launderers and terrorists from gaining access to the stock market.”
- Fund your account: You can choose to fund the account from a list of financial institutions. If you don’t see your bank on the page (or if you want to fund the account later), you can click the “What if I don’t see my bank on this list” link on the right-hand side of the page and then select the “click here” link.
- Summit the application: Then you can take a review on the application before you can summit it.
- Download the App: Once you must have summit the application, you will then be asked to download the app so you can start investing. The company will notify you via email once your application is approved.
- Log in to the app: Once you have downloaded the app to your device, then you can log in using the exact account information you created.
Can you have Multiple Robinhood Accounts?
Some individuals always ask to know if they can have a multiple account on Robinhood, but the answer is this:
It is generally not allowed to have multiple Robinhood accounts. The brokerage firm has policies in place to prevent individuals from opening more than one account in their own name.
For example, if you have multiple accounts with different legal names (e.g., due to marriage, divorce, or a legal name change), you may be able to open additional accounts with Robinhood.
Additionally, it is possible to open a joint account with another person, which would be a separate account from any individual accounts that you or the other person may have.
It is important to note that attempting to open multiple accounts under different names or using false information is considered fraud and could result in legal consequences. If you are unsure about whether you are eligible to open an additional account with Robinhood, it is advised to contact the brokerage firm directly for guidance.