The regular Robinhood investment app and web platform doesn't require a subscription to use. There are no account fees, no account minimums and trades are commission-free (though other fees could apply).
However, investors can unlock even more from their accounts by subscribing to Robinhood Gold for $5 a month. In exchange, users can receive hundreds of dollars in benefits.
#1 – Competitive yields on uninvested cash
Robinhood Gold users can earn interest on their uninvested cash. In comparison, the national average savings rate at banks is just 0.6%*, so Robinhood Gold is roughly eight times higher. It allows investors to earn a high yield on their cash while they sleep.
Someone who keeps $1,200 in uninvested cash in their account would earn $60 a year in interest, enough to pay off the Robinhood Gold annual fee (assuming that the interest rate and account balance don't change for that full year).
Even though Robinhood is not a bank, users still receive FDIC insurance on cash deposits up to $2.25 million. Each bank only offers FDIC insurance up to $250,000 per depositor. Robinhood can provide more because it stores the money at a network of program banks.
#2 – Retirement plan matching contributions
An Individual Retirement Account (IRA) allows investors to save and invest for retirement with the same tax advantages as a workplace retirement plan, like a 401(k). One drawback to an IRA is that it doesn’t include matching contributions from an employer.
Robinhood helps make up this difference by offering IRA matching contributions. Robinhood Gold users receive an extra 3% for every dollar they put into a Robinhood IRA. If someone contributes $8,000 in 2024, the maximum allowed for someone over 50, they’d receive another $240 from Robinhood.
Users without Robinhood Gold also receive a match, but only 1% of every dollar contributed. Once someone contributes to an IRA, Robinhood can help them design a portfolio for their retirement savings, or they can build their own portfolio.
#3 – Bigger instant deposits
When the market creates an investment opportunity, it doesn’t last forever. Investors can’t wait days for a bank transfer to clear before making their move. That’s why Robinhood offers instant deposits. Once a user makes a deposit, Robinhood allows them to use some of the money instantly.
Non-Gold Robinhood users receive instant deposits of up to $1,000. Robinhood Gold users are eligible to receive instant deposits of up to $50,000. Investors can use these deposits to react immediately to market news and act on those golden opportunities if they arise.
#4 – Enhanced research
Robinhood provides more investment research to its Robinhood Gold users. They receive Nasdaq Level II data, which provides more in-depth information about pricing, momentum and liquidity for stocks and other investments.
Robinhood Gold users also gain access to professional research from Morningstar, a leading independent investment research firm. Robinhood Gold users receive detailed reports and market insights from Morningstar experts. A Morningstar subscription outside of Robinhood normally costs $34.95 per month or $249 a year.
#5 - Lower margin rates
Margin investing allows investors to borrow money from their broker to make trades. It’s a way to access extra cash for an investment opportunity. Investors could also use this leverage to potentially earn higher returns on trades, though risks of losses are higher, too.
Brokers, like Robinhood, charge interest on margin loans until the investor pays the money back. Robinhood recently launched the lowest margin rates among leading brokerages. Rates will vary based on a customer's margin balance, ranging from 5.7% to 6.75%. Robinhood Gold users get their first $1k of margin interest-free.
Trying Robinhood Gold at no charge
Robinhood offers a 30-day free trial of Robinhood Gold. Users can switch to Robinhood Gold through the app and test the benefits. Only after 30 days will they be charged the $5 monthly fee.
Investors interested in unlocking Robinhood Gold's investment and account benefits can sign up and get started here.
Disclaimer
*As of 6/4/24 based on data from Bankrate.
All investments involve risk and loss of principal is possible. Not a recommendation of a security or investment strategy.
Robinhood Gold is a financial technology company and not a bank. Robinhood Gold is a subscription offering premium services for a fee. All investments involve risk and diversification does not ensure a profit or guarantee against a loss.
With the brokerage cash sweep program, the uninvested cash in your individual investing account (cash intended for investing but that you have not yet invested or spent) is swept to program banks, where it becomes eligible for FDIC insurance up to $2.25 million or $250,000 per program bank, inclusive of any other deposits you may already hold at the bank in the same ownership capacity. Keep in mind that until funds are swept to a program bank, they’re held in your individual investing account which is protected by SIPC. Once funds are swept to a program bank, they’re no longer held in your brokerage account and aren’t protected by SIPC. However, these funds are eligible for FDIC insurance through the Program Banks subject to FDIC insurance coverage limits. The IND Disclosures has more information.
Terms apply. As of November 15. 2023, the APY you will receive as a Gold member is 5% APY. The APY might change at any time at the program banks' discretion. Additionally, any fees Robinhood receives may vary and is subject to change. Neither Robinhood Financial LLC nor any of its affiliates are banks. Interest does not apply to IRAs.
Margin investing involves the risk of greater investment losses. Before using margin, customers must determine whether this type of strategy is right for them given their investment objectives and risk tolerance.
Lowest margin rates among leading brokerages is based on published rates as of 4/24/24. Schwab, IKBR, Lite, and E*Trade (Morgan Stanley) were selected based on publicly disclosed margin balances with commission-free trading. Firms that aren't publicly traded, without data available to the public were not included. Rates correspond to the minimum margin balance tier offered by each competitor and are subject to change at any time.
Bigger instant deposits are only available if your instant deposit status is in good standing.
Robinhood Financial LLC (member SIPC), is a registered broker dealer. Robinhood Securities, LLC (member SIPC), is a registered broker dealer and provides brokerage clearing services. All are subsidiaries of Robinhood Markets, Inc. (‘Robinhood’).
The 3% matching on contributions requires a subscription with Robinhood Gold (fees apply), must be subscribed to Gold for 1 year after your contribution to keep the full 3% match.
You must have compensation (wage income) in order to contribute to an IRA. The funds that earned the match must be kept in the account for at least five years to avoid a potential Early IRA Match Removal Fee. For more information, see the IRA Match FAQ.
Funds being contributed into or distributed from retirement accounts may entail tax consequences. Contributions are limited and withdrawals before age 59 1/2 may be subject to a penalty tax. Robinhood does not provide tax advice; please consult with a tax adviser if you have questions.
The Robinhood IRA is available to any U.S. customer with a Robinhood brokerage account in good standing.
This content was provided by Robinhood. Kiplinger is not affiliated with and does not endorse the company or products mentioned above.
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