how much does robinhood charge to buy stock

Introduction

If you’re searching for “how much does Robinhood charge to buy stock,” this guide gives a clear, practical answer for beginners and experienced traders alike. You’ll learn which fees are truly charged (and which aren’t), the difference between explicit commissions and implicit execution costs, how regulatory passthroughs work, and simple ways to reduce charges when trading U.S. equities on Robinhood.

As of June 30, 2024, according to Robinhood’s official Trading Fees support page and Fee Schedule, Robinhood advertises commission-free trading for U.S.-listed stocks and ETFs but continues to pass through regulatory and exchange-related fees and offers optional paid services. Independent reviews published around mid-2024 confirm the same fee model while highlighting execution and payment-for-order-flow dynamics.

What this article delivers

• A straightforward explanation of whether buying stocks on Robinhood is really free.
• A breakdown of fee types you may see (regulatory passthroughs, exchange/clearing fees, service fees, margin interest, and more).
• Worked examples showing typical charge scenarios.
• Practical tips to minimize costs.

Read on for a comprehensive, neutral, and actionable breakdown.

Why the question “how much does Robinhood charge to buy stock” matters

Many users search exactly how much does Robinhood charge to buy stock because Robinhood’s marketing emphasizes “commission-free” trading. That headline is correct for base commissions on U.S. stocks and ETFs, but it leaves out small regulatory passthroughs, certain service fees, and implicit costs from execution. Understanding the whole picture helps you compare brokers fairly and avoid surprise charges.

Overview of Robinhood’s pricing model

Robinhood’s core marketing promise is commission-free trades for U.S.-listed stocks and ETFs. That means there is no per-trade commission fee deducted by Robinhood for placing a normal market or limit order on eligible U.S. equities.

How Robinhood monetizes the service

• Payment for order flow (PFOF): Robinhood routes many retail orders to market makers and may receive compensation for that order flow. PFOF is a revenue source that can affect execution quality and price improvement.
• Premium services: Robinhood Gold is a subscription product that offers features (margin buying power, research tools) for a monthly fee.
• Interest and float: Robinhood earns interest on uninvested cash and margin balances.

Explicit commissions vs. implicit costs

• Explicit commissions: Direct per-trade charges shown on your account (Robinhood’s U.S. stock trades typically have no explicit commission).
• Implicit costs: Execution costs such as bid-ask spreads and any missed price improvement. These are not billed as a fee but change the price you receive.

Types of fees that can apply when buying (or selling) stocks

Even when there’s no commission, several fee categories may apply. Below are the main types you should know when asking how much does Robinhood charge to buy stock:

• Regulatory passthrough fees (SEC Section 31, FINRA/T+ fees, CAT fees)
• Trading activity fees (per-share or per-dollar regulatory charges)
• Exchange and clearing fees (sometimes indirectly passed on)
• Implicit execution costs (spreads and price improvement shortfalls)
• Account and service fees (withdrawals, transfers, paper statements)
• Optional product fees (Robinhood Gold subscription, margin interest)

Regulatory passthrough fees (SEC, FINRA, TAF, CAT)

What they are

Regulatory passthrough fees are small charges the platform passes from market regulators or clearing organizations to customers. These include the SEC’s Section 31 fee (charged on sales of certain securities), FINRA transactional fees, and reporting/clearing charges.

Why Robinhood passes them through

Platforms like Robinhood typically do not absorb regulator-imposed fees. Instead, these are collected as passthrough charges because regulators require the cost recovery.

How they’re usually assessed

• Often calculated per share, per contract, or as a tiny fraction of the trade value.
• Amounts are small on each trade but can show up as a few cents or rounded figures on statements.
• Rates change periodically; Robinhood’s fee schedule and the regulator announcements show the current cents-per-dollar or cents-per-share rate.

Trading activity / per-share charges and rounding rules

Many regulatory charges are computed per share and then rounded. Key points:

• If a fee is assessed per share, small orders may round to the nearest cent, which can make a small relative impact on micro trades.
• Partial fills across multiple executions may apply the fee separately to each fill, affecting the total.
• Some platforms apply minimums or caps for display purposes; check the fee schedule for rounding and cap rules.

Order execution, spread, and price improvement

When asking how much does Robinhood charge to buy stock, remember that execution quality changes the effective cost.

• Spread: The difference between bid and ask is an implicit cost. Buying at the ask and selling at the bid immediately incurs the spread.
• Price improvement: Market makers can provide price improvement (execute inside the NBBO), which reduces the effective cost.
• PFOF dynamics: Payment for order flow relationships influence where orders are routed. Good order routing can produce price improvement; poor routing can increase implicit costs.

Exchange, clearing, and options-related fees (if applicable)

• Options trades incur per-contract fees and clearing fees in addition to any platform charges.
• Some exotic or foreign instruments carry separate custody or ADR fees.
• For standard U.S. equities purchases, exchange fees are often embedded and not shown as a separate per-trade commission, but regulatory passthroughs can still appear.

Service and account fees that can affect purchase cost

Non-trade fees can change your effective cost of using the platform. Common items include:

• Deposits and withdrawals: Standard ACH transfers are usually free; instant deposits or debit-card-based instant transfers may incur fees.
• Outgoing account transfers: ACATS fees for full or partial transfers off-platform can apply.
• Wire fees: Incoming wires are often free; outgoing wires may have a small fee.
• Paper statements and paper trade confirmations: Fees may apply if you request paper mail.
• ADR custody fees: Some foreign ADS/ADRs carry custodial or conversion fees.

Deposits and withdrawals (standard vs. instant)

• Standard ACH transfers: Typically free and take a few business days to clear.
• Instant deposits: Robinhood offers instant buying power for small deposit amounts; if you use instant card-based withdrawals or instant transfers there may be a fee, usually a small percentage or a flat fee depending on the method.
• Fee visibility: Robinhood displays fees during the transfer or withdrawal flow — verify before confirming.

Account transfers and moving assets off-platform

• Full-account ACATS transfer-out: Brokers often charge a flat fee for transferring your entire account to another broker.
• Partial transfers: Some brokers charge per-position or per-asset fees for partial transfers.
• Considerations: If you plan to move positions, check Robinhood’s transfer policy and any fees in the fee schedule before initiating the move.

Margin trading and Robinhood Gold

• Robinhood Gold: A monthly subscription offering features such as professional research and increased margin buying power. There is a fixed monthly fee for Gold.
• Margin interest: If you buy stocks on margin, you pay interest on the borrowed amount. Margin interest accrues daily and is billed according to the terms in the margin agreement.
• Effect on cost: Buying on margin increases your effective cost because of interest expense and potential maintenance requirements if your positions decline.

Special cases affecting fees when buying stock

Fractional shares

• Fractional shares allow buying part of a share when you don’t have enough cash for a full share.
• Fee implications: Regulatory passthroughs and rounding rules may apply; fractional trades can result in different execution handling and potential rounding impacts.

ADRs and foreign-listed securities

• ADR custody fees and foreign exchange costs may apply for non-U.S. securities or ADRs.
• If an ADR charges passthrough custody or conversion fees, those may be listed separately.

OTC securities

• Over-the-counter securities often have different liquidity and wider spreads, increasing implicit costs even if explicit commissions are zero.

Pre-market and after-hours trading

• Extended-hours trades can have wider spreads and lower liquidity. While the commission may still be zero, execution price can be less favorable.

Partial fills and multiple executions

• Large orders that execute in multiple pieces may face separate regulatory fee calculations on each fill, potentially increasing summed passthrough charges.

Typical examples and worked calculations

Below are illustrative scenarios to show how small fees and execution can affect your effective cost. Numbers are illustrative; always confirm current rates on Robinhood’s published fee schedule.

Example A — Small buy using standard ACH (typical retail trade)

• Action: Buy $100 worth of a U.S.-listed ETF with standard ACH funding.
• Explicit commission: $0 (commission-free).
• Regulatory passthroughs: Might be zero at time of buy (many regulatory fees apply on sales) or a few cents depending on trade size and current rates.
• Spread/implicit cost: If the ETF has a 0.05% effective spread, that’s $0.05 on $100.
• Effective total cost: $0.05–$0.10 (approx.), excluding any later sale fees.

Example B — Sell that may incur regulatory passthroughs

• Action: Sell the $100 position described above.
• Explicit commission: $0.
• SEC/FINRA passthroughs: Small charge assessed on the sale leg (could be several cents depending on regulator rates and trade size).
• Effective proceeds: Sale proceeds less a few cents of regulatory fees and any spread.

Example C — Instant withdrawal fee example

• Action: Use instant debit-card withdrawal to move proceeds to your bank instantly.
• Fee: A small percentage or flat fee may apply (Robinhood displays the fee in the withdrawal flow).
• Impact: If the fee is 0.5% and you withdraw $1,000, the fee would be $5; standard ACH would usually be free but slower.

Note: The above examples are illustrative only. As of June 30, 2024, Robinhood’s fee schedule and support pages remain the authoritative source for current rates.

How Robinhood compares to other brokerages on buy costs

High-level comparison points (neutral):

• Commission-free baseline: Many mainstream retail brokers now offer commission-free trading for U.S. stocks and ETFs.
• Regulatory passthroughs: Most brokers pass through small regulator fees; the presence of these fees is common across platforms.
• Margin and premium services: Brokers differentiate on margin interest rates and premium product pricing — compare if you plan to borrow.
• Execution quality: Differences in price improvement and execution statistics matter; independent execution quality reports can help compare providers.

When comparing, look beyond “commission-free” and consider regulatory fees, execution quality, margin rates, and platform features.

How to minimize fees when buying stocks on Robinhood

Practical tips:

• Use standard ACH deposits when possible to avoid instant-deposit fees.
• Consolidate small orders into fewer larger trades to reduce the impact of per-trade rounding on regulatory passthroughs.
• Avoid frequent small withdrawals that trigger instant transfer fees; use standard bank transfers.
• Be cautious with margin: only use margin if you understand interest cost and risks.
• For fractional shares: be aware that multiple small fractional buys may accumulate rounding and regulatory effects.
• Check the fee schedule for ADR or foreign custody fees before buying international instruments.

Transparency, regulation, and where to check current rates

Regulatory fees are set externally and can change. Robinhood publishes a fee schedule and support articles that describe current passthrough charges, rounding rules, and any account maintenance fees.

As of June 30, 2024, the best sources for up-to-date numbers are Robinhood’s official Trading Fees support page and the Robinhood Fee Schedule PDF. Always check those pages before trading for the latest figures.

Frequently asked questions (FAQ)

Q: Is buying stock on Robinhood really free? A: For U.S.-listed stocks and ETFs, Robinhood does not charge a per-trade commission. However, small regulatory passthroughs, exchange/clearing fees, and implicit execution costs (spreads) may still affect your trade’s net cost.

Q: Do I pay anything when I sell? A: Sales can incur regulatory passthroughs (e.g., certain SEC fees charged on sales) and you will also experience spread-based execution costs. There is no base commission on typical U.S. equity sells.

Q: What is the instant deposit or instant withdrawal fee? A: Instant deposit/withdrawal fees depend on the method (debit card instant transfer versus standard ACH). Robinhood shows the fee in the transfer flow; rates vary and are displayed before confirmation.

Q: Can Robinhood add commissions in the future? A: Broker pricing evolves. Currently, U.S. stock and ETF trades are commission-free, with regulatory passthroughs applied. Check Robinhood’s published Fee Schedule regularly for changes.

References and further reading

• Robinhood Trading Fees support page and Fee Schedule (official documents).
• Independent reviews and explainers (summaries from broker comparison sites and trading education sites published in 2023–2024).

As of June 30, 2024, according to Robinhood’s Trading Fees support page and its Fee Schedule PDF, the company maintains commission-free trading for U.S. stocks and ETFs but continues to pass regulatory fees and offers paid services for margin and premium features. Independent reviewers in mid-2024 corroborate this model and emphasize execution dynamics and PFOF as factors that influence effective cost.

Notes and caveats to readers

Robinhood advertises commission-free trading for U.S. stocks and ETFs, but regulatory passthroughs, service fees, execution costs (spreads), and optional product fees can create charges. Fee amounts, rounding rules, and regulatory rates change over time. Always consult Robinhood’s current fee schedule and support pages before placing trades.

Prefer a platform aligned with Web3 or crypto services? Explore Bitget for integrated trading and wallet options — Bitget offers an alternative suite of exchange and wallet services for traders and investors exploring centralized and decentralized products. For more on trading fees and platform tools, check Bitget’s product pages and educational resources.

Further exploration and next steps

• Check Robinhood’s official Trading Fees page and latest Fee Schedule before any trade.
• If you plan to trade frequently or use margin, compare margin rates and execution statistics across brokers.
• Practice cost-minimizing behaviors: consolidate trades, use standard ACH, and avoid unnecessary instant transfers.

If you’d like, I can:

• Expand any section into a printable quick-reference sheet, or
• Produce worked numerical examples using present-day regulatory rates pulled from the current fee schedule you provide.