How to Earn 5% APY with Robinhood Gold

Any active investor knows the name Robinhood — but do you know about Robinhood Gold?

Robinhood Gold is a suite of features and tools that span both non-retirement brokerage accounts and IRAs held within Robinhood. For $5 a month, investors get access to more favorable rates, data from industry experts, and faster access to their cash through Instant Deposits.

Here are three reasons you might want to consider Robinhood Gold for your money:

1. It supercharges the interest rate on your cash

A typical bank pays an average savings rate of 0.45% APY on cash savings. Robinhood, however, pays 1.5% interest on uninvested cash if you opt into a program called cash sweep — and 5.0% for Gold members. That's over 10 times as much earning as your typical bank.

Cash sweep isn't quite the same as putting money in a savings account. It works by "sweeping" any uninvested money, typically that you intend to invest or spend but haven't yet, from your Robinhood account into an account at a partner bank (called a "program bank"). As of November 1, program banks include Goldman Sachs, HSBC, Wells Fargo, Citibank, Bank of Baroda, US Bank, Bank of India, Truist Bank, M&T Bank, First Horizon Bank, EagleBank, and CIBC Bank.

Because the money is stored at a bank, it is FDIC insured up to $250,000 per bank, for insurance on a total balance of $2.25 million. Like any other bank, the APY is subject to change. Until the money is "swept," it is insured by the SIPC (up to $500,000, which includes a $250,000 limit for cash). Once it's swept to a program bank, that money is still accessible to you to withdraw, to spend, or to invest through your Robinhood brokerage account.

Level Up Your Savings

Your money makes money with 5% APY on uninvested cash, FDIC-insured up to $2.25 million at partner banks. Open a Robinhood Gold account today.

2. It triples your eligible IRA match

"Match" is typically a term you only hear in relation to an employer-provided retirement account like a 401(k), in which your employer may offer additional contributions up to a percentage of what you've allocated to your plan.

However, Robinhood provides a match for its IRA, an individual retirement account that anyone with earned income can open. Typically, that match is 1% on new IRA contributions, IRA transfers, and 401(k) rollovers, but Gold subscribers get a 3% match on contributions. It works a little differently from an employer match, though. For one thing, you don't have to work for Robinhood, and for another, the match doesn't count towards the account's annual contribution limits (in 2023, that's $6,500 a year for people under 50, and $7,500 for people ages 50 and over).

Bear in mind that in order to keep that 3%, Gold members must continue their subscription for at least one consecutive year after the first 3% match. To keep the earnings from matching at either rate — 1% or 3% — you must keep your Robinhood IRA for at least five years.

3. You can try it for free

Robinhood Gold costs $5 a month, but the first month is free.

For that $5 a month, you get the supercharged savings rates and retirement match discussed above, plus access to professional research from Morningstar, level II market data from Nasdaq, and access to bigger Instant Deposits, a feature that gives you immediate access to a large amount of any money you transfer from a bank to Robinhood.

Gold also gives approved members access to margin investing at a discounted rate: 8% instead of Robinhood's standard 12%. You don't have to use margin investing if you don't want to, but note that if you do choose to, you will be charged the 8% rate during your free trial month as well as going forward. To use margin investing at Robinhood at either rate, you must apply and be approved.

This article was sponsored by Robinhood.

Disclosures: All investments involve risk and loss of principal is possible.

Robinhood Gold is a subscription offering premium services for a $5 monthly fee.

The brokerage cash sweep program is an added feature to your Robinhood Financial LLC brokerage account. Interest is earned on uninvested cash swept from your brokerage account to partner banks. The cash sweep program and Robinhood Gold are offered through Robinhood Financial LLC. Terms apply. Rate is subject to change. Robinhood is not a bank.

5.0% APY on uninvested cash only applies to brokerage accounts, it does not apply to IRA accounts. IRA transfers and rollovers receive a 1% match. You can keep the additional 2% IRA match by staying with Gold for at least 1 year.

You must have earned (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.

Instant deposits are only available if your instant deposit status is in good standing.

For margin enabled customers, to earn interest through the cash sweep program, a cash balance is needed. If you have a margin balance, there is no cash balance to earn interest. Not all investors will be eligible to trade on Margin. Margin investing involves the risk of greater investment losses.