Robinhood Free Stock

Robinhood offers a promo to get up to $1,700 in your first year. But how does it work, and is it worth your time?

Robinhood's free stock promotion allows you to test the market with minimal risk. It does this by giving you shares of stock just by opening an account.

Here's everything you need to know about Robinhood's free stock offer. How it works, how to claim it, and a few tips for getting the most out of it.

What Is Robinhood?

Robinhood is a brokerage platform built to simplify investing for everyone, particularly for those just starting. It makes buying and selling stocks, ETFs, options, and cryptocurrencies easy.

The platform is known for its commission-free trades as low as $1 and easy-to-use mobile app. Additionally, it doesn't require a minimum balance, making investing easy for any budget.

Here's a quick overview of the platform:

Robinhood Free Stock

Robinhood offers a free stock promotion where new users can receive up to $1,700 in free stock during their first year. This promotion has been ongoing since Robinhood's early days and currently has no specified end date.

All you need to do is sign up for an account and complete your verification by linking your bank or debit card. From there, Robinhood lets you select from a list of fractional shares in major companies across different sectors.

Most users receive stock worth around $5, though values can go up to $200. Just note that approximately 99% of rewards are at the lower end.^[1]

Additionally, when you refer someone to create an account on Robinhood, you and your referral earn more free stock. You can keep referring people and earn up to $1,700 worth of stock during your first year, then $1,500 for every succeeding year.

To be eligible, you must be a new Robinhood user at least 18. Remember to check Robinhood's terms and conditions for updates, as they reserve the right to change the promotion details at any time.

How Can I Maximize My Free Stock?

Making the most of Robinhood's free stock offer is simple if you know where to focus. Here are a few tips to keep in mind:

• Use multiple referrals
  The referral program allows you to earn free stock whenever you invite a new friend to join Robinhood. This can be a quick way to increase your stock rewards.

• Hold your free stock
  While you can sell your stock after three days, consider waiting if it's from a company with good growth potential. Over time, the stock's value may increase, giving you a greater return than if you had sold it immediately.

• Diversify the value
  You'll likely have shares from multiple companies if you're earning free stocks through referrals. Diversifying can reduce the risk of losses if one company's stock doesn't perform well.

• Stay updated on additional promos
  Sometimes, Robinhood offers limited-time promos that increase the stock value range for new users or referrals. Keep an eye on these offers to earn higher-value rewards.

• Reinvest your earnings
  Consider reinvesting the proceeds into other assets instead of cashing out after selling your free stock. For example, you could buy fractional shares of higher-priced stocks or ETFs you're interested in.

• Use free stock to experiment
  If you're new to investing, use the free stock or referral bonuses to experiment with buying, holding, or selling stocks without risking your money. This helps you understand how the market works and build confidence as an investor.

• Learn from the stock's performance
  Track the performance of your free stocks to understand market trends and learn about different sectors. This helps you make informed decisions when investing your own money in the future.

How Does Robinhood Make Money?

Robinhood's commission-free trading model might seem puzzling, but it generates revenue in a few ways.

First, Robinhood uses a practice called payment for order flow (PFOF), where it receives a small payment for directing trades to specific market makers.

Another revenue stream is Robinhood Gold ($5/month), a subscription service offering features like no interest for the first $1,000 of margin borrowed, larger instant deposits, and advanced market data for a monthly fee.

Lastly, Robinhood charges interest on margin loans, which allow users to borrow funds to trade. The interest is charged on the borrowed amount.

Robinhood Alternatives

If you're exploring other platforms like Robinhood, here are how two popular options—Moomoo and Public—compare.

Moomoo vs. Robinhood
Moomoo offers more advanced research tools than Robinhood, appealing to experienced traders. It includes in-depth stock analysis and customizable charting.

However, Moomoo lacks cryptocurrency trading and retirement account options, which Robinhood provides. Moomoo does offer access to Asian markets, which Robinhood doesn't.

Both platforms have fractional shares and no minimum deposit requirement, making them accessible to all types of investors.

Public vs. Robinhood
Public stands out for its social investing features, allowing users to follow and learn from other investors. It doesn't use PFOF, unlike Robinhood, which some users find more transparent.

Public also supports fractional shares and offers a community-focused approach with features like thematic investing, while Robinhood is more beginner-friendly and has a straightforward, no-frills approach.

Bottom Line

Robinhood's free stock promotion is a straightforward way to begin investing with minimal risk. While the stock value may not be high, using it as a starting point or leveraging referrals can be beneficial.

If you want to explore further, consider alternatives like Moomoo and Public, which offer unique features and promotional opportunities. Whichever platform you choose, Robinhood and its competitors make it easier than ever to start investing.

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