Robinhood has introduced a new Robinhood Gold benefit that enables members to earn 3.75% interest on their brokerage cash–up from 1.5% for non-Gold members. With the new interest rate, Gold customers can now earn even more income on their uninvested cash while they plan their next move and collect 23 times more in interest when compared to the national average savings rate (as of October 19, 2022, based on data from Bankrate). The added benefit comes on the heels of the Fed rate hike earlier last week.
Since launching the revamped brokerage cash sweep program in May Robinhood has seen strong adoption from their Gold users, who currently have about $750 million enrolled in cash sweeps. Effective immediately, all of these cash sweep balances are now earning 3.75% interest with the interest compounding daily.
Interest is then paid out monthly by the program banks, and customers can keep track of how much they’ve earned directly within the app.
Customers who wish to enroll in cash sweep can search for ‘Cash Sweep’ directly within the app, can find it via the ‘Discover more’ carousel, or they can tap the ‘Account’ icon in the bottom right corner, navigate to the ‘Investing’ tab in the top left menu, and select ‘Enable cash sweep.’
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The recent interest rate increase is a new offering for Gold customers, who already receive access to a suite of benefits including:
Larger Instant Deposits. With Gold, customers can get even larger Instant Deposit*—up to $50,000 depending on their brokerage account balance and status.
Professional research from Morningstar. Gold members get unlimited access to Morningstar’s premium, in-depth stock research reports. These reports are available for approximately 1,700 stocks and are updated frequently to reflect important company events.
Level II market data from Nasdaq. Level II market data shows multiple bid and ask prices from Nasdaq for any given security so investors can better determine the availability or desire for a security at a certain price.
Access to margin investing at 6.5% interest. Eligible customers can borrow money from Robinhood and leverage their holdings to purchase securities. For Gold customers, the first $1,000 of margin is included, and then Gold customers pay 6.5% yearly interest beyond that. Non-Gold customers who are eligible have access to a margin interest rate of 10.5%.
All eligible customers who opt in to brokerage cash sweep have their uninvested brokerage account cash automatically “swept,” or moved, into deposit accounts at a network of six program banks. Cash deposited to these banks will be covered by FDIC insurance up to a total maximum of $1.5 million (up to $250,000 per program bank, inclusive of deposits customers may already hold at the bank in the same ownership capacity). These banks will pay interest on the swept cash.
Customers can upgrade to Robinhood Gold for just $5 a month and new customers will receive a free 30-day trial. Those not enrolled in Robinhood Gold can still earn 1.5% interest for all uninvested brokerage cash once enrolled in cash sweep.