Robinhood offers index funds through two routes: fractional shares of individual index ETFs, and mutual funds from a small set of providers
Robinhood does not create its own index funds. Instead, you can buy exchange-traded funds (ETFs) that track indexes — such as VOO (which tracks the S&P 500) or VTI (which tracks the total U.S. stock market) — as fractional shares with no commission. You can also buy a limited selection of index mutual funds from providers like Vanguard and Fidelity, though Robinhood's mutual fund menu is much smaller than what those providers offer directly.
The key difference between the two routes is how you buy them. ETFs trade like stocks during market hours, so you can buy them any time the market is open and see the price change in real time. Mutual funds on Robinhood settle at the end of the trading day, so you place an order but do not see the final price until after 4 p.m. Eastern time. Neither route charges a commission on Robinhood.
If you want the full range of index funds a provider offers — or if you want to set up automatic monthly contributions — you will need to open an account directly with that provider instead. Robinhood's mutual fund selection exists mainly for people who already use Robinhood and want to add index exposure without switching platforms.
Key Takeaways
- Robinhood lets you buy index ETFs as fractional shares with no commission, so you can start with any dollar amount rather than waiting to afford a full share.
- Index ETFs on Robinhood trade during market hours like stocks, while index mutual funds settle after the market closes each day.
- Robinhood carries only a small selection of index mutual funds compared to what Vanguard, Fidelity, or Schwab offer directly.
- You cannot set up automatic recurring investments in index funds through Robinhood the way you can through a traditional brokerage or the fund provider itself.
How to find and buy index ETFs on Robinhood
Search for the ETF ticker symbol in Robinhood's search bar. Common index ETFs include VOO and SPY (both track the S&P 500), VTI and ITOT (both track the total U.S. stock market), and VEA (tracks developed international markets). Once you find the ETF, you can buy any dollar amount — Robinhood will give you a fractional share if you do not have enough for a full share.
The order executes when ready during market hours (9:30 a.m. to 4 p.m. Eastern, Monday through Friday). You will see the exact price you paid right away. Outside market hours, your order will wait in a queue and execute when the market opens the next trading day.
Robinhood does not charge a commission on ETF purchases. However, you will see a small difference between the bid price (what buyers offer) and the ask price (what sellers want) — this is called the spread, and it is built into the market, not a Robinhood fee. For popular index ETFs like VOO, the spread is usually just a few cents.
Index mutual funds available on Robinhood
Robinhood offers index mutual funds from Vanguard, Fidelity, and Schwab. Examples include the Vanguard Total Stock Market Index Fund (VTSAX), the Fidelity Total Market Index Fund (FSKAX), and the Schwab U.S. Broad Market Index Fund (SWBSX). The list is not exhaustive and changes over time, so you will need to search Robinhood's platform to see what is currently available.
When you buy a mutual fund on Robinhood, your order is placed during the trading day but does not execute until after the market closes at 4 p.m. Eastern. You will see the final price the next morning. This delay is standard for all mutual funds, not specific to Robinhood.
Robinhood does not charge a commission on mutual fund purchases either. Some mutual funds have a minimum investment amount (often $1,000 or $3,000), but Robinhood's fractional share feature may let you buy in smaller amounts — check the fund details on the platform to confirm.
ETFs versus mutual funds on Robinhood: which route makes sense
ETFs are usually the better choice on Robinhood because you can buy them when ready during market hours, in any dollar amount, and with no minimum. If you want to invest $50 or $500, an ETF gets you in when ready. Mutual funds require you to wait until the next day to see your price, and some have minimum investments that fractional shares may not override.
Mutual funds can make sense if you already own one through another account and want to consolidate everything in one place, or if you have a strong preference for a specific fund that Robinhood carries. Otherwise, an index ETF will give you the same exposure with more flexibility.
One practical difference: if you want to set up automatic monthly investments, neither Robinhood ETFs nor mutual funds support that feature the way a traditional brokerage does. You would need to manually place an order each month, or open an account directly with the fund provider to set up recurring contributions.
Comparing Robinhood index funds to buying directly from the provider
If you buy an index ETF on Robinhood, you own the same fund as if you bought it anywhere else — the ticker VOO is VOO whether you buy it on Robinhood, Fidelity, or Schwab. The difference is in the features and options available to you.
| Feature | Robinhood | Vanguard / Fidelity / Schwab Direct |
|---|---|---|
| Commission on ETF purchases | None | None |
| Fractional shares | Yes | Varies by provider |
| Automatic monthly investments | No | Yes |
| Full range of mutual funds | Limited selection | Full catalog |
| Minimum investment | $1 for ETFs | Varies; often $1,000 for mutual funds |
Opening an account directly with Vanguard, Fidelity, or Schwab makes sense if you want to set up recurring monthly contributions, need access to a specific fund Robinhood does not carry, or want to explore the full range of options each provider offers. Robinhood is simpler if you want to make one-time purchases and do not need recurring investments.
Tax treatment of index funds on Robinhood
Index funds held in a regular Robinhood account are subject to capital gains tax when you sell them. If you hold the fund for more than one year before selling, you pay long-term capital gains tax (usually lower than short-term rates). If you sell within one year, you pay short-term capital gains tax at your ordinary income rate.
Robinhood also offers a Robinhood IRA (both traditional and Roth versions), which lets you buy index funds in a tax-advantaged retirement account. In a traditional IRA, contributions may be tax-deductible and growth is tax-deferred. In a Roth IRA, contributions are made with after-tax money but growth and withdrawals are tax-free. The annual contribution limit for IRAs is set by the IRS and changes each year — check Robinhood's current limits when you open an account.
If you are choosing between a regular taxable account and an IRA, the IRA is usually the better choice for long-term index fund investing because of the tax advantages. However, IRAs have withdrawal restrictions — you generally cannot take money out before age 59½ without a penalty, though some exceptions exist.
Frequently Asked Questions
Can I set up automatic monthly investments in index funds on Robinhood?
No. Robinhood does not offer automatic recurring investments. You must manually place each order. If automatic monthly contributions are important to you, open an account directly with Vanguard, Fidelity, Schwab, or another provider that supports recurring investments.
What is the difference between VOO and VTI?
VOO tracks the S&P 500, which includes 500 large U.S. companies. VTI tracks the entire U.S. stock market, including large, mid-size, and small companies. VTI is more diversified but includes smaller companies with higher volatility. Both are index ETFs you can buy on Robinhood.
Do I pay taxes on index funds while I hold them on Robinhood?
In a regular taxable account, you pay taxes only when you sell and realize a gain. You do not pay taxes on dividends the fund pays out unless you hold it outside a retirement account. In a Robinhood IRA, you do not pay taxes on gains or dividends while the money is in the account.
Can I buy international index funds on Robinhood?
Yes. Robinhood carries index ETFs that track international markets, such as VEA (developed international markets) and VXUS (total international markets). You can buy them the same way you buy U.S. index ETFs — by searching the ticker and buying fractional shares.
What happens if Robinhood shuts down or goes out of business?
Your index funds are held in your name and protected by the Securities Investor Protection Corporation (SIPC), which covers up to $500,000 per account. If Robinhood closes, your shares would be transferred to another brokerage. Your ownership of the funds themselves does not depend on Robinhood continuing to exist.