Why Does Robinhood Need My Social Security Number? (Is It Safe to Give?)

Why Does Robinhood Need My Social Security Number? (Is It Safe to Give?)

*This post may contain affiliate links. As an Amazon Associate we earn from qualifying purchases.

Robinhood takes many of the complexities out of investing, but some of the required personal information might make you a bit scared. Afterall your SSN is important to you and no one wants their identity stolen. 

Rest assured, all stock investment companies have to ask for your social security number (SSN), not just Robinhood. There are many reasons they request so many details for all customer accounts.

Robinhood needs your social security number to ensure you’re paying taxes, to verify your identity, and to ensure you’re making the income you claim. It’s safe to give your SSN to Robinhood because they’re a secure company and you have to give that info to any brokerage when you open an account. 

As with any brokerage, all of your details are protected.

In this post, I will cover why it’s safe to give your SSN to Robinhood, whether or not your information is protected, and why all stock brokerages require a social security number (among other personal information).

Is It Safe To Give My SSN To Robinhood?

Personal information can be scary to give out online especially if you have never used a company before. So if this is the first time you’ve ever heard of Robinhood you will likely be apprehensive about giving them your SSN. 

Is it safe to give that info to Robinhood? 

It’s safe to give your SSN to Robinhood as all of your private data is only used to verify your identity and make sure that they report any gains or losses to the IRS. They do that reporting using your SSN which is why they (and all brokers) require that information to set up an account. 

Robinhood is a large company that has millions of accounts on it so it is absolutely safe to give them the required info to open an account. 

Robinhood Follows SEC Protection Regulations

Not only does Robinhood follow all of the rules they need to protect your money, but they’re also a part of the Securities Investor Protection Corporation (SIPC). This corporation protects your bank account information, SSN, money transfers, and more. 

You won’t have to stress about losing your SSN or dealing with hackers.

Robinhood Has Millions of Protected Users

If you need proof that Robinhood is just as trustworthy as any other brokerage, you’re in the right place. Robinhood has over 10,000,000 active users that have been protected for many years. 

Investing through the company is just as safe and effective as going through the most high-end brokerage brand in the world.

They Verify Banking Information

Part of the reason they need your SSN is to connect with your bank account. If they didn’t verify your SSN, they wouldn’t know if you’re truly the person behind the profile. However, once your information is verified through your bank, they don’t need any more details. 

There’s no need to have them sift through your checking and savings accounts when you’re done with the first steps.

We now know why it’s safe to give your social security number to Robinhood, but what about the rest of your personal information? Let’s dive into the details in the following section.

Is Your Personal Information Protected By Robinhood?

Your personal information is protected by Robinhood through SIPC, SEC, and a private protection service. This three-layer safeguard is designed to stop hackers from trying to steal your personal details. It also provides much-needed peace of mind, limiting most of the issues to simple user mixups that can be solved quickly.

Here are things you should know about safety concerns with Robinhood:

  1. Risks are often limited to user error, so make sure you double-check your information. The previously mentioned protections are excellent, but they don’t stop you from typing the wrong information or accidentally deleting crucial parts of your profile. Always take caution when analyzing or changing your details.
  1. Personal details are safeguarded by Robinhood. Everything from your birthday to your name and phone number won’t leave the platform. They don’t want to risk a lawsuit. Believe it or not, Robinhood doesn’t want your info to leak just as much as you don’t since you could cause a court case.
  1. Robinhood doesn’t sell your information, but they can provide it to the IRS if needed. Every brokerage company is required to work with the IRS for tax purposes. If the government needs to check if you’ve paid your taxes, Robinhood must comply with their demands.

Are you trying to work around providing a social security number while using Robinhood or another stock investment app? You might be out of luck. 

In the next section, I will explain why these companies need an SSN before letting you create an account.

Do You Have to Give Your SSN for Stocks?

You have to give your SSN for stocks, regardless of the brokerage company that you are opening an account with. Stock investments require these personal details to check if you are who you say you are, but it also lets them deal with tax information, income levels, and more. 

You won’t find a single stock trading company that doesn’t demand this information prior to investing.

Review these quick points regarding why stocks require an SSN:

  • Stock investment companies need your SSN to verify who you are. According to Investing Simple, any company that deals with your bank account information or income level for investments needs to verify your identity. Social security numbers are often the only true form of identification, but there are a couple of other reasons they’re useful. 
  • Robinhood requires a social security number to check your income. Your income includes the money you make from your job, but Robinhood explains your investment profits are subject to income filing. Whether you’re earning dividends, day trading, or making a few bucks a month, it all affects your income bracket.
  • Adding your SSN and other personal details allows stock companies to ensure you pay your taxes. You have to file taxes on the investments that you’ve sold, even if you didn’t make a profit. Losses can be filed, and some can be written off, but everything you sell on the stock market has to be reported to the IRS.

Every reason is justified by income reporting, taxes, and personal protection. While providing your SSN to Robinhood might seem scary, it’s actually much safer than if you had the option not to do so.

Final Thoughts

Now that you know why Robinhood needs your social security number, you can proceed with creating your account without feeling worried. Nobody wants to provide their SSN to random companies, but Robinhood is well-known, trusted, and follows all of the stock market’s regulations. 

It’s more than safe to invest through their app or website.

Recent Posts