[Update May 10, 2022: Following the FED meeting on May 4, many banks and credit unions have begun lifting their savings and CD rates. Robinhood followed suit raising its APY from 0.50% to the current 1.0% APY on idle cash. Read more below.]

The Robinhood Cash Management account is similar to other cash management accounts we’ve covered this year in that it combines the best features of a checking and savings account but is not an actual bank itself.

Instead, Robinhood Cash Management leverages the FDIC insurance of multiple banks by sweeping your funds into partner banks at the end of each day.

To see if this account is right for you, continue reading our review below.

Features and Details

Robinhood Cash Management is a free service that comes with no minimum deposit or balance requirements. That said, you must first open the brokerage account before activating the cash management product, and there may be some fees associated with that such as transfer fees or other account service fees. Robinhood fees are covered further down in this article.

Interest Rate and APY

As with all competitive cash management accounts on the market, Robin Hood Cash Management pays a respectable APY (annual percentage yield) on your idle funds.

When Robinhood first released this product the interest rate was one of the highest around, even beating the top online savings and money market accounts. Today, however, while still competitive the yield is much more modest.

To put this yield in perspective the average APY on a savings account and an interest checking account sit at just 0.06% and 0.03% APY, respectively, according to recent FDIC data.

Robinhood Cash Management VS Competitors

Here’s a quick look at the top cash management accounts on the market when benchmarked against Robinhood Cash Management.

One point that deserves repeating is that you must open a Robinhood brokerage account first before opening the Robinhood cash management. That is not the case with every other cash management account on the list above. All of these except Robinhood can be opened as stand alone accounts.

Benefits, Features and Drawbacks

Robinhood cash management is loaded with perks and benefits combining the best of checking accounts and savings accounts into one tidy package. It does, however, come with some drawbacks and disadvantages that traditional savings and checking accounts may not.

Here’s a complete list of current features:

• An APY that is 6x the national average according to the FDIC
• No minimum deposit or monthly balance requirements
• No monthly service fee
• Free debit card
• No out-of-network ATM fees (ATM owner fees may apply)
• No foreign transaction fees
• No overdraft fees

Perhaps the most notable item on this list is the lack of foreign transaction fees. This is a unique benefit and one that could be of tremendous value if you travel outside the country frequently.

Robinhood uses the Allpoint and MoneyPass ATM network for free usage at over 75,000 access points. Robinhood also never charges for out-of-network ATM usage but the ATM owner may impose a fee for using your Robinhood debit card in their machine(s). Many cash management accounts such as Fidelity and others reimburse these fees worldwide, but Robinhood does not currently.

Here are more drawbacks to consider with Robin Cash Management:

• No out-of-network ATM reimbursement
• You must first open and maintain a brokerage account with Robinhood
• Customer service is limited and receives poor reviews by online users
• Frequent outages reported
• No cash or check deposit options

Robinhood Fee Schedule

Because you’re obligated to open a Robinhood brokerage account in order to take advantage of Robinhood cash management, you may encounter some fees on that side from time to time depending on the account activities you make.

Below is a full list of fees that Robinhood imposes for account services and transfers.

There are also fees associated with the stock trading side of the brokerage account. You can download their full fee schedule here for more information.

How to Open Robinhood Cash Management

After you’ve downloaded the app and opened your standard Robinhood brokerage account, you can now apply for Robinhood Cash Management. Do to this, first:

1. Click on the wallet icon at the bottom of your screen once you’ve logged into the Robinhood brokerage account.
2. Click the “join waitlist” button.
3. Select Debit Card design from four options.
4. Review and approve Robinhood’s terms and conditions, account disclosures and customer agreement forms.
5. Once approved (this took approximately 1 minute for us) then you may fund the account. If you have already funded the brokerage account, then your idle funds will automatically apply to the Robinhood cash management and earn the advertised APY while idle.