Opening Your Account and Funding It

To buy stock in Robinhood, you first need to create an account, pass identity verification, and link a bank account to fund your trades. Robinhood is a brokerage app — it holds your money and executes your buy and sell orders on the stock market.

read the Robinhood app or visit robinhood.com, then tap "Sign Up." You'll enter your email, create a password, and provide your legal name, date of birth, and Social Security number. Robinhood uses this information to verify your identity through a third-party service. The process usually takes a few minutes, though sometimes Robinhood asks for additional documents like a photo ID or proof of address.

Once your identity is confirmed, link a bank account by selecting "Add Bank Account" in the app. You can connect a checking or savings account from most U.S. banks. Robinhood will ask you to log into your bank's website or app to authorize the connection — this is called OAuth, and it's the same method most financial apps use. You don't give Robinhood your banking password; your bank confirms the connection directly.

Key Takeaways

  • You need a verified Robinhood account and a linked bank account before you can buy stock.
  • Robinhood offers fractional shares, meaning you can buy a portion of an expensive stock with a small amount of money.
  • Stock orders execute during market hours (9:30 a.m. to 4 p.m. Eastern, Monday through Friday), and orders placed outside those hours execute at the next market open.
  • Robinhood charges no commission on stock trades, but the price you pay includes a small markup called the spread.
  • You can hold stocks indefinitely, but selling them triggers a taxable event that you'll report on your tax return.

Transferring Money Into Your Robinhood Account

After your bank account is linked, you need to transfer money from your bank into Robinhood before you can buy stock. In the app, tap the account icon, then "Transfers," then "Transfer to Robinhood." Enter the amount you want to move and confirm.

Standard transfers (called ACH transfers) take one to three business days to arrive. Robinhood also offers when ready transfers for amounts up to $1,000 per day if you have a Robinhood Gold subscription, which costs $5 per month. Without Gold, you can still trade while a transfer is pending — Robinhood lets you use the money before it officially clears, though if the transfer fails, you'll owe the amount back.

Once the money lands in your Robinhood account, it sits as cash and is ready to use. You can transfer money out the same way — it goes back to your bank in one to three business days.

Finding and Buying a Stock

In the Robinhood app, tap the search icon at the bottom and type the company name or stock ticker symbol. Ticker symbols are one to five letters — Apple is AAPL, Microsoft is MSFT, Tesla is TSLA. Robinhood shows you the current price, a chart of recent price movement, and news about the company.

Tap "Buy" to open the order screen. Enter the number of shares you want, or the dollar amount you want to spend. If you enter $100, Robinhood calculates how many whole shares or fractional shares that buys at the current price. For example, if a stock costs $150 per share, $100 buys you 0.67 shares.

Choose your order type. A market order buys the stock at whatever the current market price is — it executes when ready during market hours. A limit order lets you set a maximum price you're willing to pay; the order only executes if the stock drops to that price or lower. Limit orders can sit unfilled if the stock never reaches your price.

Review the order summary, which shows the number of shares, the estimated cost, and any fees. Tap "Submit Order" to confirm. During market hours (9:30 a.m. to 4 p.m. Eastern, Monday to Friday), your order executes within seconds. Orders placed after hours or on weekends execute at the next market open.

Understanding Robinhood's Pricing and Costs

Robinhood advertises zero-commission stock trading, which is true — you don't pay a per-trade fee like you might at an older brokerage. However, you do pay a cost called the spread, which is the difference between the price Robinhood pays to buy the stock and the price it charges you. The spread is usually small (a few cents per share) but is built into the price you see.

Robinhood also makes money by lending out shares you own to short-sellers and by earning interest on your cash balance. These are standard brokerage practices and don't cost you directly, but they're worth knowing about.

If you hold a stock and it pays a dividend (a cash payment to shareholders), Robinhood deposits that money into your account automatically. You'll see it listed under "Dividends" in your account history. Dividends are taxable income in the year you receive them.

Selling Stock and Withdrawing Your Money

To sell a stock, find it in your "Stocks" tab, tap it, and select "Sell." Choose how many shares to sell (or all of them), pick market or limit order, and confirm. The sale executes during market hours the same way a buy order does.

When you sell, the proceeds land in your Robinhood cash balance. You can then transfer that money back to your bank account, or use it to buy another stock. Selling a stock triggers a taxable event — you'll owe capital gains tax on any profit (or can claim a loss if you sold for less than you paid). Robinhood sends you a tax document called a Form 1099 at the end of the year showing all your trades.

If you sell a stock within 30 days of buying a substantially identical stock, the IRS wash sale rule may explore. This rule prevents you from claiming a loss on the sale. Robinhood tracks this for you and flags wash sales in your account, but the responsibility to report it correctly on your taxes is yours.

Using Robinhood's Research and Watchlist Tools

Before you buy, Robinhood shows you company news, analyst ratings, and a price chart for each stock. Tap the "News" tab to see recent articles, or scroll down to see ratings from Wall Street analysts. These are informational only — they don't predict what a stock will do.

Create a watchlist by tapping the heart icon on any stock. Your watchlist appears on the home screen and lets you track stocks you're considering without owning them yet. You can organize watchlists by category (for example, "Tech Stocks" or "Dividend Stocks") to keep track of different investment ideas.

Robinhood also offers educational content through its "Learn" section, which explains concepts like diversification, market volatility, and how earnings reports affect stock prices. This content is free and doesn't require you to trade.

Account Settings and Security

Once you've bought stock, find your account by enabling two-factor authentication. In the app, go to Account Settings, tap "Security," and choose either text message or an authenticator app like Google Authenticator. Two-factor authentication requires you to enter a code from your phone every time you log in from a new device, which prevents unauthorized access.

You can also set a PIN that Robinhood requires before you can place a trade or transfer money out. This adds another layer of protection if someone gains access to your phone or account.

Robinhood is a member of the Securities Investor Protection Corporation (SIPC), which means if Robinhood fails, your stocks and cash are protected up to $500,000 per account. This is standard protection at all brokerages and covers the value of your holdings, not the performance of your trades.

Frequently Asked Questions

Can I buy stock with less than $1?

Yes. Robinhood's fractional shares feature lets you buy a portion of any stock with any amount of money. If a stock costs $500 per share and you have $50, you can buy 0.1 shares. You own that fraction and receive dividends and voting rights proportional to your ownership.

What happens if I buy a stock and the price drops when ready?

You own the stock at whatever price you paid. If the price drops, the value of your holding drops too, but you haven't lost money unless you sell. If you hold the stock, you have the chance to recover if the price rises again. If you sell at a loss, that loss is final and you can claim it on your taxes.

Can I set up automatic purchases?

Robinhood doesn't offer automatic recurring purchases like some brokerages do. You have to manually buy each time. However, you can set up automatic transfers from your bank to Robinhood, then buy stocks manually whenever you want.

Do I owe taxes on stocks I own but haven't sold?

No. You only owe tax when you sell a stock (capital gains tax) or when it pays a dividend. straightforward owning a stock that goes up in value doesn't trigger a tax until you sell it.

What's the difference between a market order and a limit order?

A market order buys when ready at the current price. A limit order sets a maximum price you'll pay and only executes if the stock reaches that price. Limit orders can sit unfilled if the stock never drops to your target price, but they protect you from buying at a price higher than you want.