Robinhood has become one of the most well-known online brokers, offering commission-free trading and a clean, beginner-friendly interface. Whether you’re new to investing or simply want to explore a simpler way to trade, this step-by-step guide will walk you through how to use Robinhood effectively. We’ll cover account creation, funding, buying and selling, and using advanced tools like the Robinhood Legend platform.
How To Open a Brokerage Account
Before you can trade, you’ll need to open a brokerage account. Here’s how:
- Visit Robinhood’s Website
Go to Robinhood and click Sign Up at the top right. You’ll be asked to enter your:- Full name
- Email address
- Password
- Phone Verification and Identity
Enter your phone number, then verify it using a six-digit code.
Next, enter your:- Address
- Social Security Number
- Date of birth
- Citizenship status
- Investment Experience and Options
Robinhood will ask about your investing experience. Pick the answer that best reflects your background. Then, you’ll be asked whether you want to enable options trading. If you’re new, it’s best to skip this for now. - Employment and Disclosures
Provide information about your employment and answer standard brokerage disclosure questions. Once completed, read and accept the terms and conditions. - Robinhood Legend Prompt
You’ll get a prompt to try Robinhood Legend (more on that later). You can skip it for now.
Funding Your Robinhood Account
After setting up your account, the next step is to fund it.
- Link a Bank Account Using Plaid
Robinhood uses Plaid, a secure service that connects your bank to your account. Click Continue, enter your phone number, and select your bank. Tip: If you’re concerned about security, use a secondary bank account solely for investing purposes. - Authorize and Transfer Funds
After logging into your bank via Plaid and giving access, select the account to fund from. Review the details and confirm the transfer. You can start with as little as $1. In this example, we deposit $30.
Making Your First Investment
Once your account is funded, you’re ready to trade. Here’s how to use Robinhood to make your first investment:
- Search for a Stock or ETF
Use the search bar to look up your desired stock or ETF. For example, let’s use SCHD (Schwab U.S. Dividend Equity ETF). - Select and Buy
Click on the stock or ETF. Robinhood allows fractional share investing, so you can start with as little as $1.- Enter the amount or number of shares you want.
- Click Review Order
- Confirm by clicking Buy
Congratulations! You’ve just made your first investment.
Navigating the Platform
After making a purchase, explore the platform to understand what you own and what tools are available.
Investment Overview
- On your Investing tab, you’ll see:
- Portfolio value
- Holdings (e.g., SCHD)
- Cash balance and asset allocation
- Options to add funds, enable margin, check reports, and view history
Selling a Stock or ETF
To sell:
- Click on the stock/ETF in your portfolio.
- Choose Sell.
- Enter the amount or shares to sell.
- Click Review Order, then Sell.
Note: We are not selling SCHD in this example to keep it in the portfolio.
Robinhood Gold: Is It Worth It?
Robinhood Gold is a $5/month subscription offering advanced features. Let’s explore what you get:
1. 4.9% APY on Uninvested Cash
If you keep $1,500+ in cash, the interest can more than cover the subscription fee.
2. 3% IRA Match
Robinhood offers a 3% match on IRA contributions for 5 years. Depending on your age and max contributions, this could yield $150–$1,200 over that period.
3. Morningstar Research Access
Gold subscribers get free access to premium Morningstar reports, which typically cost $250/year separately.
4. Increased Instant Deposits and Margin Access
Gold allows instant deposits up to $5,000 and provides access to margin investing—use with caution.
If you plan to use any of these features regularly, Robinhood Gold is well worth the $5/month.
Exploring Robinhood Legend
Robinhood Legend is their advanced trading platform designed for more serious traders.
How to Access It
- Click the Try Robinhood Legend banner.
- Agree to the terms and enter the platform.
- You’ll be prompted to Start from a Template—select Stock Trading or Options Trading depending on your preference.
Interface and Layout
The Legend interface is more customizable and includes:
- Watchlists
- Price charts
- Market data
- Order history
- Customizable dashboards
For those who trade actively or want a deeper dive, Legend offers tools more in line with traditional platforms like Fidelity or E*TRADE.
Researching Investments on Robinhood
Let’s revisit SCHD and see what research information is available:
- Sectors invested in
- Top 10 holdings (e.g., Pfizer, Coca-Cola)
- Dividend yield, expense ratio, and historical highs/lows
While helpful, Robinhood’s research tools are basic compared to more advanced brokers. They provide a good overview but lack detailed historical data and dividend analysis.
Final Thoughts
Now that you know how to use Robinhood, you can open an account, fund it, buy and sell securities, and explore both standard and advanced platforms. Whether you’re investing for retirement, dividends, or day trading, Robinhood provides:
- An intuitive and simple interface
- Fractional share investing
- IRA accounts with a 3% match
- Margin and options trading
- Premium features with Robinhood Gold
- A growing platform in Robinhood Legend
For new investors, Robinhood’s simplicity is its biggest strength. If you’re looking to understand how to use Robinhood effectively, start small, avoid complex trades like options at first, and build confidence over time.
Once you’re comfortable, Robinhood offers enough features to grow with you. Whether you’re in it for long-term investing or want to try your hand at trading, this platform makes it accessible and easy.
By following this step-by-step tutorial, you now know exactly how to use Robinhood—from account creation to placing your first trade and exploring more advanced features.
