Yes, you can invest in the S&P 500 on Robinhood through index funds and ETFs

Robinhood lets you buy funds that track the S&P 500 without picking individual stocks. The most common way is to buy an exchange-traded fund (ETF) — a single investment that holds all 500 companies in the index. You search for the ticker symbol (like SPY, VOO, or IVV), enter the dollar amount you want to invest, and Robinhood executes the trade during market hours.

You can also buy mutual funds that track the S&P 500, though Robinhood's mutual fund selection is smaller than its ETF selection. The mechanics are the same: search, choose your amount, and buy. Both ETFs and mutual funds give you the same result — ownership of a piece of all 500 companies — but they work slightly differently in terms of fees and trading times.

Robinhood does not charge commissions on any of these purchases, which is one reason people use the platform for index investing. You pay only the fund's internal expense ratio, which is the annual fee the fund company charges to manage the investment.

Key Takeaways

  • ETFs like SPY, VOO, and IVV track the S&P 500 and can be bought on Robinhood with no commission.
  • You can also buy S&P 500 mutual funds through Robinhood, though the selection is more limited than ETFs.
  • Both ETFs and mutual funds charge an annual expense ratio, but this fee is typically very small for index funds.
  • You need a funded Robinhood account and must place your order during market hours (9:30 a.m. to 4 p.m. Eastern Time on weekdays).

The difference between ETFs and mutual funds on Robinhood

An ETF trades like a stock — you can buy it any time the market is open, and the price changes throughout the day. When you buy SPY, VOO, or IVV (the three most popular S&P 500 ETFs), you own shares of that fund, and those shares can be sold whenever you want. The price you pay depends on what the market is willing to pay at that exact moment.

A mutual fund is priced once per day, after the market closes at 4 p.m. Eastern Time. If you place an order to buy an S&P 500 mutual fund at 2 p.m., you will not know the exact price until after 4 p.m. Mutual funds are also harder to sell quickly — some have holding periods or redemption fees if you sell within a certain timeframe.

For most people starting out, an ETF is simpler. You can see the price before you buy, you can sell whenever you want, and Robinhood makes them straightforward to search for. The three largest S&P 500 ETFs are SPY (SPDR S&P 500 ETF Trust), VOO (Vanguard S&P 500 ETF), and IVV (iShares Core S&P 500 ETF). All three track the same index and have very low expense ratios — usually between 0.03% and 0.09% per year.

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 of the fund you want — SPY, VOO, or IVV are the most common choices. The fund's page will appear with the current price, a chart, and a green "Buy" button.

Tap or click "Buy" and enter the dollar amount you want to invest. You can choose to buy a specific dollar amount (like $100) or a specific number of shares. Robinhood will show you how many shares that amount will buy at the current price. Review the order and tap "Buy [Fund Name]" to confirm.

The order goes through when ready if you place it during market hours (9:30 a.m. to 4 p.m. Eastern Time, Monday through Friday). If you place an order after hours or on a weekend, it will execute at the next market open. You will see the purchase in your portfolio right away, and you will own that piece of the S&P 500.

Costs and fees to know about

Robinhood charges no commission to buy or sell ETFs or mutual funds. That means you pay nothing to Robinhood itself for the transaction. However, you do pay the fund's expense ratio — an annual fee that comes out of the fund's value automatically.

For the three major S&P 500 ETFs, the expense ratio is tiny. SPY charges 0.09% per year, VOO charges 0.03% per year, and IVV charges 0.03% per year. On a $1,000 investment, that works out to less than $1 per year for VOO or IVV, and less than $1 per year for SPY. These fees are deducted from the fund's value, so you do not write a check — they just reduce your returns slightly.

If you buy and sell the same fund multiple times in a short period, Robinhood may flag your account for pattern day trading if your account balance is under $25,000. This rule comes from the Securities and Exchange Commission (SEC), not from Robinhood. If you are flagged, you will be restricted from buying and selling the same security on the same day for 90 days. For long-term index investing, this is rarely a problem.

Setting up automatic investments in the S&P 500

Robinhood lets you set up recurring investments so you do not have to remember to buy every month. Tap your profile icon, go to "Investing," and look for the "Recurring Investments" or "Auto Invest" section (the exact name varies by app version). Choose the fund you want to invest in, set the dollar amount, and choose how often you want to invest — weekly, biweekly, or monthly.

Robinhood will automatically buy that fund on your chosen schedule using cash in your account. This is a straightforward way to build an S&P 500 position over time without thinking about it. The order goes through at the market open on your chosen day, so the price will vary slightly each time.

You can pause or cancel recurring investments at any time. If you do not have enough cash in your account on the scheduled day, the order will not go through, so make sure you keep your account funded.

Tax considerations for S&P 500 investing on Robinhood

When you sell an S&P 500 ETF or mutual fund for more than you paid for it, you owe capital gains tax on the profit. If you hold the investment for more than one year before selling, it is taxed as a long-term capital gain, which usually has a lower tax rate than short-term gains. If you sell within one year, it is taxed as ordinary income at your regular tax rate.

Robinhood sends you a tax form (Form 1099-B) at the end of the year that shows all your sales and the gains or losses. You will also receive a 1099-DIV if your fund paid dividends. Keep records of when you bought and sold so you can calculate your gains correctly.

If you want to avoid thinking about taxes, consider holding your S&P 500 investment for the long term. The longer you hold, the more your money can grow, and you will owe taxes only when you eventually sell.

Frequently Asked Questions

What is the minimum amount I need to invest in an S&P 500 fund on Robinhood?

There is no minimum. You can buy as little as one share of an ETF, which might cost $300 to $500 depending on the fund's current price. Some ETFs allow fractional shares, so you could invest $10 or $50 if you want. Check the fund's details on Robinhood to see if fractional shares are available.

Can I buy S&P 500 index funds on Robinhood with a retirement account?

Robinhood offers IRAs (Individual Retirement Accounts) where you can buy S&P 500 ETFs and mutual funds. The process is the same, but the account has tax advantages — you do not owe taxes on gains until you withdraw the money in retirement. You can open a Robinhood IRA through the app.

What happens if I sell my S&P 500 fund before the market closes?

Your order goes through at the current market price, which changes throughout the day. If you sell during market hours, you get the price at that moment. If you sell after hours, your order waits until the next market open. For ETFs, you can sell anytime the market is open.

Do I get dividends from S&P 500 ETFs on Robinhood?

Yes. The companies in the S&P 500 pay dividends, and those dividends flow through to the ETF. Robinhood deposits the dividend cash into your account, and you can reinvest it or leave it as cash. Some funds offer automatic dividend reinvestment, which buys more shares with the dividend money.

Is it better to buy one large S&P 500 ETF or split my money between multiple ones?

For most people, buying one is simpler and just as effective. SPY, VOO, and IVV all track the same index and hold the same 500 companies, so the results are nearly identical. Pick the one with the lowest expense ratio (currently VOO or IVV at 0.03%) and stick with it. Splitting your money between multiple S&P 500 funds does not add any benefit.