Yes, you can buy S&P 500 index funds on Robinhood in two main ways
Robinhood offers two straightforward paths to own S&P 500 exposure. You can buy an exchange-traded fund (ETF) that tracks the S&P 500, or you can buy individual stocks that make up the index. The ETF route is simpler for most people because a single purchase gives you a piece of all 500 companies at once, rather than buying 500 separate stocks.
The most common S&P 500 ETFs on Robinhood are SPY, IVV, and VOO. Each one holds the same 500 large-cap U.S. companies and moves almost identically in price. The differences between them are tiny — mainly the fund company that runs them and expense ratios that range from 0.03% to 0.04% per year. On Robinhood, you pay no commission to buy or sell any of these.
You can also buy individual S&P 500 stocks one at a time if you want to build your own index manually, but this requires much more work and leaves you exposed to the performance of single companies rather than the broad market.
Key Takeaways
- S&P 500 ETFs like SPY, IVV, and VOO are available on Robinhood with no commission and can be bought in fractional shares starting at any dollar amount.
- ETFs are simpler than buying individual stocks because one purchase gives you exposure to all 500 companies in the index.
- Robinhood charges no trading fees, but the ETF itself charges a small annual expense ratio that varies slightly by fund.
- You can set up automatic recurring investments in S&P 500 ETFs through Robinhood's recurring investment feature.
How to buy an S&P 500 ETF on Robinhood
Open the Robinhood app or website and tap the search icon at the bottom. Type the ticker symbol — SPY, IVV, or VOO — and select the fund from the results. You will see the current price, a chart, and a green "Buy" button.
Tap or click "Buy" and enter the dollar amount you want to invest, not the number of shares. Robinhood will show you how many fractional shares that amount buys at the current price. Review the order and tap "Confirm" to complete the purchase. The transaction settles the next business day, and your shares appear in your portfolio when ready.
If you want to invest the same amount every week or month automatically, tap the three-dot menu on the fund's page and select "Set up recurring investment." Choose your frequency and amount, and Robinhood will buy for you on that schedule.
The difference between SPY, IVV, and VOO
All three funds track the S&P 500 and hold the same 500 stocks in nearly the same proportions. The main differences are the company running the fund and the annual cost.
| Fund | Ticker | Run by | Annual expense ratio |
|---|---|---|---|
| SPDR S&P 500 ETF Trust | SPY | State Street | 0.09% |
| iShares Core S&P 500 ETF | IVV | BlackRock | 0.03% |
| Vanguard S&P 500 ETF | VOO | Vanguard | 0.03% |
The expense ratio is the percentage of your investment the fund company charges each year to run the fund. On a $1,000 investment in IVV or VOO, you pay $0.30 per year. On SPY, you pay $0.90 per year. Over decades, the lower-cost funds save you money, but all three are considered low-cost by historical standards.
SPY is the oldest and most heavily traded, which means it has the tightest bid-ask spread (the tiny difference between buy and sell prices). For most Robinhood users, the choice between the three matters far less than the choice to invest consistently.
Fractional shares and minimum investment amounts
Robinhood lets you buy fractional shares, which means you do not need to save up for a full share. If VOO costs $450 per share and you have $50 to invest, Robinhood buys you 0.11 shares. This removes the barrier of waiting until you have enough cash for a whole share.
There is no minimum investment amount on Robinhood. You can buy $1 worth of an S&P 500 ETF if you want, though in practice most people invest at least $10 or $25 at a time. Fractional shares settle and trade just like whole shares — you own them outright and can sell them whenever you choose.
Tax consequences of buying S&P 500 ETFs on Robinhood
When you sell an S&P 500 ETF for more than you paid, you owe capital gains tax. If you held it for less than one year, the gain is taxed as short-term capital gains at your ordinary income tax rate. If you held it for more than one year, it is taxed as long-term capital gains at a lower rate (0%, 15%, or 20% depending on your income).
ETFs also distribute dividends when the companies in the index pay them. Robinhood automatically reinvests these dividends into more shares unless you change that setting. You owe tax on the dividends in the year you receive them, whether or not you reinvest them.
If you hold the S&P 500 ETF in a Robinhood retirement account (like a Roth IRA or Traditional IRA), you do not owe tax on gains or dividends until you withdraw the money. This is one reason many people hold index funds in retirement accounts rather than regular taxable accounts.
Why buy an ETF instead of individual S&P 500 stocks
Buying individual stocks means researching 500 companies, deciding which ones to own, and rebalancing your portfolio when some stocks grow much larger than others. An S&P 500 ETF does all of this for you automatically. The fund company rebalances quarterly to keep the index weights correct.
Individual stocks also expose you to company-specific risk. If you own only Apple, Microsoft, and Tesla, a bad earnings report at one company can hurt your portfolio significantly. An S&P 500 ETF spreads that risk across 500 companies, so no single company can move your portfolio much.
For most people, especially those new to investing, an S&P 500 ETF is simpler, cheaper, and less stressful than picking individual stocks.
Frequently Asked Questions
Can I set up automatic monthly investments in an S&P 500 ETF on Robinhood?
Yes. On the fund's page, tap the three-dot menu and select "Set up recurring investment." Choose monthly, weekly, or biweekly, enter your dollar amount, and Robinhood will buy on that schedule. You can change or stop the recurring investment anytime.
Do I pay any fees to buy or sell S&P 500 ETFs on Robinhood?
Robinhood charges no commission to buy or sell. The only ongoing cost is the ETF's expense ratio, which is deducted automatically from the fund's value each year. You do not see it as a separate charge — it is built into the fund's price.
What happens if I sell my S&P 500 ETF after owning it for six months?
You owe capital gains tax on any profit. Since you held it less than one year, the gain is taxed as short-term capital gains at your ordinary income tax rate. Robinhood reports the sale to the IRS, and you report it on your tax return.
Can I buy S&P 500 ETFs in a Robinhood IRA?
Yes. S&P 500 ETFs are among the most common holdings in retirement accounts. Gains and dividends are not taxed until you withdraw money from the account, which makes long-term index investing especially tax-efficient in an IRA.
Which S&P 500 ETF should I choose if I am just starting out?
VOO and IVV have lower expense ratios and are equally good choices. SPY is also fine if you prefer the oldest and most-traded option. The difference in cost is small enough that consistency matters far more than which fund you pick.