Robinhood Fees to Watch Out for (2024) (2024)

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Inthis post webreak down and explain Robinhood’s hidden fees including: Regulatory fees, trading activity fees, options fee, OCC fees and other domestic and international service fees updated asofJuly 22nd, 2024.

Robinhood isanapp that lets you buy and sell stocks (pieces ofcompanies) without paying money each time you make atrade. It’s like adigital shop for investing incompanies, and it’s super popular because itseemsfree.

Even though Robinhood advertises “commission-free trading, ” which means itdoesn’t charge you directly for buying orselling stocks, itstill makes money from various hiddenfees.

Most Robinhood fees are small but can still add upwithout you noticing immediately. Inthis guide, we’ll explain each and every fee Robinhoodcharges. Here isaquick summary:

TL; DR: Robinhood Hidden Fees

1. Spread Fees: $0.000166 per share (equity sells) and $0.00279 per contract (options sells)

   • When you buy orsell stocks, there’s atiny difference between your pay and the marketprice. This difference iscalled the “spread.” Robinhood sometimes makes some money from these spreads, which ishigher than otherplatforms.

2. Regulatory Fees: $8 per $1M ofprincipal

   • These are small fees required bygovernmentregulators. Robinhood charges these tocover itscosts. They include the Trading Activity Fee (TAF) and the SEC fee.

3. Gold Subscription:$50/ year

   • Robinhood Gold isapremium service that costsmoney. Itoffers extra features like professional research reports ormore considerable instantdeposits. Ifyou choose this, it’s aclear fee, but it’s something extra you might not need rightnow.

4. Interest onMargin: 6.75%

   • Ifyou borrow money from Robinhood tobuy more stocks than you can afford with your own money (called “buying onmargin”), they’ll charge youinterest. This can add up, soit’s important tobecareful ifyou usemargin.

   • UPDATE: Robinhood introduced new, lower margin rates that itsaid are the lowest among leadingbrokerages. The rates vary based onthe customer’s total margin balance, ranging from 5.7% to6.75%. (May 21) press release.

5. Withdrawal Fees w/ instant bank: 1.75% It’s free towithdraw via standard bank transfer; however, instant bank withdrawal will cost you 1.75%. More details here.

6. Withdrawal Fees w/ debit card: 1.75% more details here.

7. Withdrawal toanother broker: $100 transfer out fee more details here.

Robinhood doesn’t usually charge for withdrawing money, but ifyou want totransfer your stocks toanother broker, they will charge afee of$100 for that.

Standard bank transfer:Nofee for withdrawals.

External debit card account: Withdrawals have uptoa1.75% fee based onthe amount being transferredout. You’ll see the calculated fee when you initiate thewithdrawal.

Now that you know abit about the fees Robinhood charges, let’s explore each one and explain how itworks.

Ready? Let’s roll!

Overview ofRobinhood’sFee Structure

Robinhood isknown for its zero-commission trading model onstocks, ETFs, options, and cryptocurrencies, which ishighly beneficial for all transaction sizes.

Commission-Free Trading

Robinhood iswell-known for its commission-free trading model, which applies tostocks, ETFs, options, and cryptocurrencytrading. This approach has been asignificant draw for users, especially those new toinvesting.

This allows customers totrade without worrying about the cost per trade like those typically seen onother brokerage platforms​​.

Hidden and Regulatory Fees

Despite offering zero-commission trades, RobinhoodDOESpass onspecific regulatory fees toits users.

These include the Trading Activity Fee (TAF) and the Regulatory Transaction Fee, which are mandatory fees charged byregulatory bodies like FINRA and the SEC and are not marked upbyRobinhood​​.

Robinhood passes this fee totheir customers, except for sales of50 shares orless. AsofJanuary 1, 2024, the TAF is$0.000166 per share (equity sells) and $0.00279 per contract (options sells).

** This fee isrounded uptothe nearest penny, which will benogreater than $8.30 pertrade.

Users are also subject tofees for paper statement deliveries, overnight check deliveries and outbound asset transfers​​. Get anuncapped 1% bonus when you transfer your brokerage account intoRobinhood. Initiate atransfer byJune 28th, 2024.

AsofMay 22, 2024, the SEC fee is$27.80 per $1 million ofprincipal (only for sell orders), which isrounded uptothe nearestpenny. Robinhood doesn’t pass this fee ontoyou for sales with anotional value of$500 orless.

Staking Fees

Robinhood Crypto customers can now earn a10% bonus ontheir net buys over their first 30 days onthe platformstake their solana (SOL) holdings directly through the app inEuropean markets.

Revenue Generation Beyond Commissions

Robinhood compensates for its zero-commission model through several other revenue streams.

Market Maker Rebates

Robinhood earns aportion ofits revenue through rebates from market makers and trading venues.

This practice, known as“payment for order flow,”allows Robinhood toreceive compensation for directing orders toparticular market makers for execution​​.

Robinhood ATM Fees

When you make awithdrawal from anATM, Robinhood charges a$2.50 fee.

However, ifyou have $300 ormore indirect deposits over the last 34 days, Robinhood will reimburse your Robinhood ATM fees following the settlement ofthe ATM transaction (typically 1 to2 business days).

Keep inmind, out-of-network ATM providers may also charge athird-party fee, and wewon’t reimburse that fee.

NOTE: Your ATM transaction may bedeclined ifyou don’t have sufficient remaining funds inyour spending account tocover the ATM fees, including refundablefees. For more details, review the fee schedule intheSpending Account Agreement.

In-network ATM fees

• Aslong asyou use 1 ofRobinhood’s 90,000+ ATMs inthe Allpoint orMoneyPass networks, you won’t pay any fees.

• Ifyou use anout-of-network ATM, the ATM provider may charge you afee, and Robinhood may not reimburse you for thatfee.

InMarch, 2024— Robinhood and Arbitrum announced acollaboration that simplifies the path toLayer 2s (L2s) bygiving Robinhood Wallet users access toArbitrum swaps through decentralized exchanges— tocut down ongasfees.

Robinhood Gold

Robinhood Gold isapremium service offers additional features such asincreased instant deposit limits and access tomargin trading.

With Gold, you get the following premium features for non-retirement, individual investing accounts:

• 5% interest onyour uninvested brokerage cash with cash sweep (1.5% without Gold)*

• Bigger instant deposits*

• Professional research from Morningstar

• Level IImarket data from Nasdaq

• Access tomargin investing at8%

Robinhood charges amonthly fee for Gold subscriptions, including additional interest onmargin used above acertain threshold​​. AsaGold subscriber, you can get a3%IRA matchoneligibleIRA contributionstoyour Robinhood IRA.**

Here are some ofthe key features and aspects ofRobinhood Gold:

1. Enhanced Trading Capabilities: Robinhood Gold subscribers can accessbiggerinstant deposit limits, which means they can use deposited funds instantly without waiting for the funds tosettle.

2. Margin Trading: Robinhood Gold allows users totrade onmargin, giving them access toborrowed funds topurchasestocks. This can increase both the potential gains andrisks.

3. Additional Market Data: Subscribers get access toin-depth research and Level IImarket data from NASDAQ, which provides more detailed information about buy and sell orders inthe market than isavailable through standard Robinhoodaccounts.

4. Interest onMargin: Robinhood Gold offers acompetitive annual interest rate for money borrowed over $1,000. AsaGold member, you enjoy alowerrate.

5. Monthly Fee: The service costs $5 per month, including the first $1,000margin. Beyond $1,000, additional interest fees apply based onthe amount ofmarginused.

6. Other Benefits: Robinhood Gold members also benefit from priority customer support, which can becrucial for resolving issuesquickly.

Robinhood Gold issuitable for traders who need more than the basic features offered inthe free Robinhood account, especially those looking toutilize margin trading and who can benefit from faster access todeposited funds and more comprehensive financial data.

What Customers Dislike About Robinhood Fees

Hidden Charges

InMarch of2024, aReddit user noticed Gold fees would soon beraised.

The user included the below screenshot ofthe 'terms ofservice' change.

Another use noted the following surprise option fees.

NOTE: It’simportanttocarefully read ALL the fine print, terms ofservice and consider the risks associated with margin trading, asitcan significantly increase potentiallosses. For detailed information and the most current features, it’s best tovisit Robinhood’s official site orcontact their supportdirectly.

Another Reddit user wrote:

• “Idon’t remember Robinhood charging any fees last year onoptions today Iplaced myoption order and ithas a0.03 regulatory fee percontract. Not sure when this change was implemented but Iamvery disappointed inrobinsbood for charging acommission, Ithought they were commission free.”

Robinhood Fees Trustpilot

Trustpilot Rating: 1.2 / 5 from 3,680 ratings

Interest onUninvested Cash

Interest isearned oneligible uninvested cash swept from your individual investment account toprogrambanks. Program banks pay interest onyour swept cash minus any fees paid toRobinhood.

The Annual Percentage Yield (APY)*— 1.5% asofAugust 11, 2022, or5% for Robinhood Gold members asofNovember 15, 2023.

Margin Fees

For users who choose totrade onmargin (borrowing money totrade), Robinhood charges aninterest rate onthe borrowedfunds. This rate varies depending onwhether the user isaRobinhood Gold member.

Gold members typically receive alower rate than non-Gold members​.

Through this multifaceted approach torevenue generation, Robinhood maintains alow-cost trading environment for its users while still operatingprofitably.

NOTE:OnMay 6th, 2024, the U.S. Securities and Exchange Commission (SEC)issued Robinhooda'Wells Notice, ' indicating that the SEC isseriously considering legal action against the retail cryptoexchange.

Robinhood Response

Overview ofSwan’s Fee Structure

Swan primarily targets users interested inpurchasing Bitcoin regularly through a'recurring buys' model. Fees are directly related tothe amount and frequency ofpurchases.

Swan Bitcoin’s model makes itanespecially appealing option for recurring low-time preferenceinvestors. Swan combines low fees with additional savings for frequent purchases and successful referrals.

Trading Fees

Right now, Swan customer have ZERO fees for their first ornext $10,000 inBitcoin purchases.

Swan Bitcoinhas low commissions (0.99%) for all purchases and sales whether made instantly, via wire transfer, direct deposit, oraspart ofarecurring transferplan. Depending onyour purchasing size, your fees can beupto80% cheaper atSwan than ifyou buy Bitcoin through another platform.

Additional Discounts and Programs

Swan Force

Referral Incentive Program (Receivea$10 Bitcoin Bonus)

Swan ishighly confident inthe appeal oftheir service and has thus initiated the Swan Force ReferralInitiative. This program isopen toall who wish tobecomeaffiliates.

Enrolling inSwan Force isabreeze!

Once you’re in, you’ll begiven aunique URL that you can easily share withothers. Ifthey decide tojoinSwan using your link, they’ll get a$10 bonus inBitcoin.You’ll also earn 25% oftheir Bitcoin transaction fees for their first year’s purchases.

Swan Force FAQ

We’ve set upadedicated referral dashboard for you tokeep track ofyour referrals and earnings.

Comparing Transaction Fees: Swan Bitcoinvs. Robinhood Fees

When comparing fee structures, it’s essential tounderstand how each platform charges for transactions and how these fees impact both small and large transactions.

• For small transactions: The absence ofcommission fees makes Robinhood anattractive option for small transactions.

• Small traders benefit from not paying aflat fee per trade, which can disproportionately affect smaller trade amounts.

• However, they still face small regulatory fees like the 'Trading Activity Fee, ' which is$0.000166 per share for equity sales​​.

• AsofJanuary 1, 2024, the TAF is$0.000166 per share(equity sells) and$0.00279 per contract(options sells) onRobinhood. This fee isrounded uptothe nearest penny, which will benogreater than $8.30 per trade. Keep inmind, you may becharged more than the $8.30 fee because the fee limit isbased onthe execution ofyour order, which can occur with multipletrades.

• For large transactions: While the lack oftrading fees benefitslargertransactions, Robinhood users must consider the impact ofregulatoryfees, which can accumulate based onthe transaction size.

• However, these fees are relatively minor compared totypical commission charges onotherplatforms.

Membership and Subscription Fees

When considering the membership and subscription fees between Swan and Robinhood, each platform offers different approaches catering tospecific investors andservices.

• Swan Bitcoin Membership Fees: Swan Bitcoin focuses primarily onBitcoin and does not charge general membership oraccountfees.

• Robinhood Membership Fees: Robinhood offers amore traditional membership model through its Goldservice.

Robinhood Gold costs $5 per month and includes additional perks like earning higher interest onuninvestedcash. This service provides value tomore active traders orthose looking for deeper financial insights and quicker access tofunds.

BothSwan and Robinhood have distinct fee structures beyond basic trading fees, including withdrawal, inactivity, and transferfees. Understanding these can help users gauge the overall cost ofusing eachplatform.

Robinhood Fees

• Withdrawal Fee: Robinhood does not charge fees for ACH withdrawals but has wire transferfees. Domestic wires are free, but internationalwirefees must bechecked for hidden forex charges​​.

• Inactivity Fee:$0 Nofee forinactivity. Replacement card $0 Nofee for replacementcard. Your funds will beheld atortransferred toJPMorgan Chase Bank, N.A. anFDIC-insured institution.

• Transfer Fee: Robinhood charges a$75 fee for outbound transfers (ACATS), asignificant cost ifauser moves their portfolio toanotherbrokerage. However, depositing funds via ACH and withdrawing funds from abank account​isfree.

Swan Bitcoin Fees

• ZERO Fees: Nofees onyour first $10k! Enjoy zero fees onyour first $10,000 ofBitcoin buys (oryour next $10,000 for existing clients). Notime limit, applies tosingle buys, recurring buys, and IRA buys. Learn more.

• Withdrawal Fee: Swan Bitcoin does NOT charge any fees for withdrawing Bitcoin toanexternal wallet, which isasignificant benefit for users looking tomove their Bitcoin topersonal wallets orother exchanges​.

• NoInactivity Fee: Swan promotes regular purchasing but does NOT penalize users with inactivity fees, making itcost-effective for long-term holding without regular transactions.

• Transfer Fee: There are NO fees for transferring funds infiat.

Which Platform isMore Cost-Effective for Different Types ofInvestors

Robinhood

Robinhood offers abroad approach tocryptocurrency trading with nocommission fees, which might suit those looking totrade various cryptocurrencies without incurring high costs.

However, the depth offeatures specific tocryptocurrency trading might not beasrobust asdedicated competitor crypto platforms​​.

Swan Bitcoin

Swan ismore cost-effective for those focused explicitly onfrequent Bitcoin smash buys and those planning regular and substantial purchases.

Remember: Swan isBitcoin-only.

Now, you are ready totake control ofyour Bitcoin and crypto investments with competitivefees! Don’t settle for fake Bitcoin withRobinhood. Start securing your financial future with Swan with the hardest money ever known toman.

Sign upfor Swan today!

For more information, please visitswan.com.