The Ultimate Guide to Trading Fees on Robinhood and the Best Low-Fee Brokerages

When it comes to stock trading, understanding brokerage fees is essential. Many investors look for platforms with the lowest fees to maximize their returns. Robinhood has gained immense popularity due to its commission-free trading, making it a go-to choice for many traders, especially beginners. However, other brokerage firms also offer competitive rates. In this guide, we will cover trading fees on Robinhood, brokerage firms with the lowest fees, Robinhood day trading, and how to get free Robinhood stocks.

Understanding Trading Fees on Robinhood

Robinhood revolutionized the investing world by introducing commission-free trading, which significantly lowered the barriers to entry for new investors. However, even though Robinhood does not charge commissions, there are still some fees associated with trading on the platform.

Key Trading Fees on Robinhood

1. Commission Fees – Robinhood does not charge commission fees for trading stocks, ETFs, and options.
2. Regulatory Fees – The SEC and FINRA impose small fees on sales of stocks and options, which Robinhood passes on to users.
3. Margin Fees – Robinhood Gold users can trade on margin, but there is a fee of $5 per month, plus interest on borrowed funds over $1,000.
4. Options Trading Fees – While there is no commission for options trading, regulatory fees still apply.
5. ACH and Wire Transfer Fees – Bank transfers via ACH are free, but wire transfers cost $25 for withdrawals and $50 for international wires.

Robinhood remains one of the best platforms for commission-free trading, but it’s important to be aware of these additional costs.

Brokerage Firms with the Lowest Fees

Although Robinhood is well-known for its zero-commission trading, several other brokerage firms also offer low or no fees, making them attractive for cost-conscious investors.

Top Low-Fee Brokerages

1. Fidelity – Offers commission-free stock and ETF trades, with no account minimums.
2. Charles Schwab – Provides $0 commissions on stocks and ETFs, along with access to extensive research tools.
3. TD Ameritrade – Features commission-free stock and ETF trading, plus a powerful trading platform for active investors.
4. Webull – Another commission-free platform with advanced charting tools.
5. E*TRADE – Offers free stock and ETF trades with a user-friendly interface.
6. Merrill Edge – Provides $0 commission trades and integration with Bank of America accounts.

Each of these brokerage firms has different strengths, such as research tools, customer support, and trading platforms. Choosing the right one depends on your investment strategy.

Robinhood Day Trading

Day trading involves buying and selling stocks within the same trading day to capitalize on short-term price movements. While Robinhood is a convenient platform for day trading, there are important rules and restrictions to consider.

Pattern Day Trading (PDT) Rule

Robinhood follows the Pattern Day Trading (PDT) rule, which states that if you make more than three-day trades within five business days in a margin account (with less than $25,000), you will be flagged as a pattern day trader and restricted from trading.

Tips for Day Trading on Robinhood

1. Use a Cash Account – A cash account avoids the PDT rule but requires full settlement of funds before making new trades.
2. Monitor Market Trends – Stay updated with news and technical analysis to make informed trades.
3. Manage Risk – Use stop-loss orders to protect against significant losses.
4. Leverage Robinhood Gold – If you have $2,000+ in your account, you can use margin trading with Robinhood Gold.

Although Robinhood is great for commission-free trading, active day traders might prefer platforms with more advanced charting and execution tools, such as TD Ameritrade’s ThinkorSwim.

Brokerage with the Lowest Fees

If your goal is to minimize trading costs, consider brokerage firms that offer low or no fees. Some of the best options include:

• M1 Finance – Zero commission on stocks and ETFs, ideal for passive investors.
• Firstrade – No commissions on stocks, ETFs, and options, plus free mutual fund trades.
• SoFi Invest – Offers free stock and ETF trades, with fractional share investing.

These platforms allow you to keep more of your profits by minimizing trading fees.

Free Robinhood Stocks: How to Get Them

Robinhood offers a referral program that allows users to earn free stocks when they invite friends to join the platform.

Steps to Get Free Robinhood Stocks

1. Sign Up – Create a Robinhood account.
2. Refer a Friend – Share your referral link with friends and family.
3. Claim Your Free Stock – Once your friend signs up and links their bank account, you both receive a free stock.

The stocks you receive are randomly selected and could range from small-cap stocks to well-known companies like Apple or Tesla.

Other Ways to Get Free Stocks

• Webull Promotions – Webull offers free stocks when you sign up and deposit funds.
• Fidelity and Schwab Bonuses – These brokerages occasionally offer cash bonuses for new accounts.

Taking advantage of these promotions can help you grow your portfolio without investing your own money.

Conclusion

Choosing the right brokerage is essential for maximizing your investment returns. Robinhood offers commission-free trading, but it’s important to be aware of regulatory and margin fees. If you’re looking for the brokerage with the lowest fees, platforms like Fidelity, Webull, and TD Ameritrade are great alternatives. Day traders should consider the PDT rule when trading on Robinhood. Finally, Robinhood’s referral program is an easy way to earn free stocks.

By understanding trading fees on Robinhood and exploring other low-fee brokerages, you can make  smarter investment decisions and keep more of your profits. Happy investing!