Is HOOD (Robinhood Markets, Inc.) Halal or Haram?

Based on our AAOIFI-standard shariah screening, HOOD is Not Halal (Haram) and is not considered permissible for Muslim investors. It failed 2 of 4 compliance screens. Robinhood Markets, Inc.'s core business activity was found to be non-compliant. Its interest income of 33.85% exceeds the ≤5% limit.

Robinhood Markets, Inc. is a pioneering fintech platform that disrupted the brokerage industry by offering commission-free trading for stocks, ETFs, options, and cryptocurrencies. The app is widely known for its user-friendly interface and educational tools like 'Robinhood Snacks' and 'Learn,' aimed at making financial markets accessible to retail investors. It generates revenue primarily through transaction-based revenues (payment for order flow), net interest income, and subscription fees from its Robinhood Gold service. For Muslim investors using HalalStocks.co.uk, Robinhood is currently classified as Not Halal (Haram). While the act of providing a trading platform is not inherently impermissible, the company fails the financial screening criteria significantly. Specifically, it fails the interest income threshold, which is a critical component of Shariah compliance , meaning a large portion of its earnings is derived from non-permissible sources. From a financial perspective, the major red flag is the Interest Income-to-Revenue ratio, which sits at 33.85%, vastly exceeding the AAOIFI limit of 5%. This high figure is driven by the interest Robinhood earns on users' uninvested cash balances and margin lending to traders. On the positive side, the company maintains a healthy balance sheet with a Debt-to-Market Cap ratio of 22.1% and Cash-to-Market Cap of 11.5%, both passing their respective screens, but this does not outweigh the revenue violation. Investors should note that while you cannot invest in HO OD stock itself, using the Robinhood app to buy other Shariah-compliant stocks is a separate matter and generally permissible, provided you do not utilize their margin lending features. The non-compliance here refers strictly to owning shares in Robinhood Markets, Inc . as a corporation due to its business model's reliance on interest generation. Robinhood Markets, Inc. operates in the Financial Services sector under the Financial - Capital Markets industry and is headquartered in Menlo Park, CA, US. The company is led by CEO Vladimir Tenev and employs approximately 2,300 people.

HOOD was screened using AAOIFI-based shariah compliance criteria. Four tests are applied: (1) Business Activity — the company's core business must not derive primary income from haram (prohibited) activities such as alcohol, gambling, tobacco, or interest-based finance. (2) Debt-to-Market-Cap — total debt must not exceed 33% of market capitalization. (3) Interest Income — interest income must not exceed 5% of total revenue. (4) Cash & Securities — cash and interest-bearing securities must not exceed 33% of market cap. HOOD passed 2 of these 4 screens.

HOOD was last screened on 2026-02-25. Shariah compliance status can change as companies report new financial data, acquire new businesses, or shift revenue streams. We recommend checking back periodically for the most up-to-date screening results.