Robinhood's Core Fees

Robinhood does not charge commissions on stock trades, options trades, or cryptocurrency transactions. You can buy and sell individual stocks, exchange-traded funds (ETFs), and options contracts without paying a per-trade fee. This is the main reason many people opened Robinhood accounts when the platform launched — traditional brokers charged $5 to $10 per trade, and Robinhood eliminated that cost entirely.

However, Robinhood does make money from you in other ways. The company earns revenue from payment for order flow, which means it receives small payments from market makers when it routes your trades to them. Robinhood also charges for premium features and account types that go beyond basic stock and options trading.

Key Takeaways

  • Robinhood charges zero commissions on stocks, ETFs, and options, but makes money through payment for order flow and premium subscriptions.
  • Robinhood Gold (the premium subscription) costs $5 per month and gives you margin buying power and extended-hours trading.
  • Margin interest rates on Robinhood Gold accounts vary based on how much you borrow, starting around 2.5% annually for small balances.
  • Wire transfers out of your account cost $5 per outgoing wire, though incoming wires are free.
  • Robinhood does not charge account maintenance fees, inactivity fees, or minimum balance requirements.

Robinhood Gold Subscription and Margin Interest

Robinhood Gold is a paid subscription tier that costs $5 per month. When you subscribe, you gain access to margin — the ability to borrow money from Robinhood to buy stocks and options. On a standard Robinhood account, you can only spend the cash you have deposited. With Gold, you can borrow up to a certain amount based on your account balance.

If you use margin (borrow money), Robinhood charges interest on the borrowed amount. The interest rate depends on how much you borrow. For balances under $25,000, the rate is typically around 2.5% per year. For larger borrowed amounts, the rate can be lower. Robinhood publishes its current margin rates on its website, and they can change. You only pay interest on the money you actually borrow, not on your entire account balance.

Robinhood Gold also includes other features: extended-hours trading (trading before 9:30 a.m. and after 4 p.m. Eastern time on weekdays), Level II market data (showing more detailed order information), and professional research reports. These features come bundled with the $5 monthly subscription.

Wire Transfer Fees

If you want to move money out of your Robinhood account to another bank account, you can request a wire transfer. Robinhood charges $5 for each outgoing wire transfer. Incoming wire transfers — money you send into Robinhood from another bank — are free.

You can also move money using ACH transfers (electronic transfers that take one to three business days), and these are free in both directions. If you need money quickly, the wire transfer fee is the cost of that speed.

What Robinhood Does Not Charge

Robinhood does not charge an account maintenance fee, meaning you do not pay anything just to keep an account open. There is no inactivity fee if you stop trading for a period of time. There is no minimum balance requirement — you can open an account with any amount of money, even $1.

Robinhood also does not charge fees for depositing money into your account via ACH transfer or for most other standard account activities. If you close your account, there is no closing fee.

Dividend Reinvestment and Fractional Shares

Robinhood allows you to reinvest dividends automatically at no charge. When a stock you own pays a dividend, Robinhood can use that money to buy more shares of the same stock. This feature is free and happens automatically if you turn it on in your account settings.

Robinhood also lets you buy fractional shares — meaning you can own 0.5 shares of a $200 stock instead of having to buy a whole share. There is no extra fee for fractional share purchases; you pay the same commission-free rate as whole shares.

Cryptocurrency Trading Fees

Robinhood offers cryptocurrency trading through its Crypto app. Like stock trading, there are no commissions on crypto trades. However, Robinhood makes money on crypto through the spread — the difference between the price you see and the actual market price. This spread is built into the price you pay, so you do not see a separate fee, but you are paying slightly more than the true market rate.

Crypto transfers (moving cryptocurrency out of your Robinhood account to another wallet or exchange) are free, though the blockchain network itself may charge a fee depending on the cryptocurrency and current network conditions.

How Robinhood Makes Money Without Commissions

Robinhood's business model relies on several revenue sources beyond commissions. The largest is payment for order flow: when you place a trade, Robinhood routes it to a market maker (a firm that buys and sells securities), and that market maker pays Robinhood a small fee for the order. This happens behind the scenes and does not appear on your statement.

Robinhood also earns money from Robinhood Gold subscriptions, margin interest, and the spread on cryptocurrency trades. The company also earns interest on the cash sitting in customer accounts before it is invested.

Frequently Asked Questions

Does Robinhood charge for closing my account?

No. Closing your Robinhood account is free. If you have cash in the account, you can withdraw it via ACH transfer (free) or wire transfer ($5 fee). If you have open positions, you will need to sell them before closing the account.

What happens if I don't have enough cash to cover a trade?

On a standard Robinhood account, you cannot place a trade if you do not have enough cash. On Robinhood Gold, you can borrow money through margin, but you will pay interest on the borrowed amount. The trade will go through, but you will owe interest until you pay back the borrowed money.

Are there any hidden fees I should know about?

Robinhood's main fees are the $5 monthly subscription for Gold and the $5 wire transfer fee. There are no hidden account maintenance fees, inactivity fees, or surprise charges. The spread on cryptocurrency trades is not a separate fee but is built into the price you see.

Do I pay taxes through Robinhood?

No. Robinhood does not collect taxes on your behalf. You are responsible for reporting your gains and losses to the IRS. Robinhood provides tax documents (Form 1099) at the end of the year showing your trading activity, which you use to file your own taxes.

Can I avoid the $5 wire transfer fee?

Yes. Use an ACH transfer instead, which is free and takes one to three business days. Wire transfers are faster (usually same-day or next-day) but cost $5. If you are not in a hurry, ACH is the cheaper option.