The Robinhood Cash Management account is similar to other cash management accounts we’ve covered this year in that it combines features of both checking and savings accounts, but the accounts are offered from brokerages rather than banks, and are designed to be a convenient place to park uninvested cash.
Like other cash management accounts, the Robinhood Cash Management account leverages the FDIC insurance of multiple banks by sweeping your funds into these partner banks at the end of each day to accrue interest and be protected by federal deposit insurance.
Currently Robinhood has two options available for consumers:
- Instant account which applies 1.50% APY (annual percentage yield) on all uninvested cash.
- Robinhood Gold which applies 4.00% APY to idle cash + additional features but comes with a $5.00/month fee.
To see if either of these accounts are right for you, continue reading our review below.
Instant Account 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.
|Institution/Account||FDIC insurance||Debit Card||APY|
|SoFi Money||$1.5 million||Yes||1.25%|
|Wealthfront Cash Account||$1 million||No||0.85%|
|Betterment Everyday Cash Reserve||$1 million+||Yes||0.35%|
|Aspiration Spend & Save||$2 million||Yes||3.0% – 5.0%|
|Fidelity Cash Management||$1.25 million||Yes||0.01%|
|Robinhood Cash Management||$1.25 million||Yes||1.50%|
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.
|Debit Balance Transfers||$0|
|Returned Check, ACH, Wire & Recall/Stop Payments||$0|
|Domestic Wire Transfer||$0|
|International Wire Transfer||$0|
|Domestic Overnight Check Delivery||$20|
|Electronic Statements & Confirms||$0|
|Domestic Overnight Mail||$20|
|International Overnight Mail||$50|
|Paper Form CRS||$0|
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 Upgrade to Gold
You can upgrade to Gold at any time from your computer or mobile app.
Robinhood also provides members with a free 30 day trial to see if the features are right for you. After the 30 day trial a $5 per month fee will be charged to your account at the beginning of each billing cycle.
What you get with Gold
Here are the added benefits you get with a Robinhood Gold account.
- 4.00% APY on all idle and uninvested cash
- Larger Instant Deposits for all Gold members whose Instant Deposit status is in good standing.
- Professional research provided by MorningStar
- Level 2 market data from Nasdaq
- Access to margin investing at 7%. Margin investing costs 11% without gold.
We should note that if you have a margin balance that is uninvested this sum will not earn interest.
The 7% margin interest is an annual rate applied to borrowed sums of $1,000 or greater.