Should I Keep My Account at Robinhood?
Why accounts default to Robinhood and when it makes sense to rollover to another institution.
When you file Form 4547, your child's account is automatically opened at Robinhood with the money invested in an S&P 500 index fund. This is the default, but you can change it.
Why Robinhood Is the Default
The government chose Robinhood as the default custodian because of their commission-free trading and low account minimums. It makes the program accessible to everyone, regardless of wealth.
Reasons to Stay with Robinhood
- Simple and easy to use
- No account minimums or maintenance fees
- Good mobile app for monitoring
- The default fund (S&P 500) is a solid choice
Reasons to Consider a Rollover
- Lower expense ratios: Fidelity and Vanguard offer funds with even lower fees
- More fund options: You might want total market or international exposure
- Consolidation: Keep all family investments in one place
- Customer service: Traditional brokerages often have better support
How to Rollover
You can initiate a rollover to another eligible institution (Fidelity, Vanguard, Schwab, etc.) by contacting the new institution and filling out their transfer paperwork. The process typically takes 1-2 weeks.
Our Take
For most families, staying with Robinhood is perfectly fine. The difference in expense ratios is small (we're talking about a few dollars per year on a $1,000 account). Only rollover if you have a specific reason or want to consolidate accounts.
Ready to get started?
Check your child's eligibility for a $1,000 Trump Account.