If you haven’t heard of Robinhood, now is an excellent time to join the team. Starting this week, the commission-free investment company has grown from its roots in portfolio development and day trading to becoming a solid cash management option. As of October 8th, you can open your own brokerage checking/savings account with Robinhood and start earning over 2% APY.
This may not be the first you’ve heard of this as last year, the company announced their intentions to unveil the Robinhood Cash Management product with a 3% APY; a notably competitive rate for the industry. As it stands, the actual introductory APY sits at 2.05% which isn’t bad, but it isn’t 3%. As with any percentage yield, though, it varies with the market and the market has dropped since the initial announcement. Currently, Robinhood is accepting additions to the waitlist for the product, and once you elect to participate in Robinhood Cash Management, all previously uninvested funds will be swept into participating program banks that will pay the 2.05% APY.
Additionally, Robinhood Cash Management comes with FDIC insurance on up to $1.25 million, or $250,000 per program bank. The linked Robinhood card itself is issued by Sutton Bank and will be accepted anywhere MasterCard is accepted.
If your cash is currently sitting in an account that earns less than 2.05% APY and/or is not FDIC insured, it might be a good idea to transfer that cash into the Robinhood Cash Management network. To transfer money to Robinhood, you’ll need to link your bank account to the app and complete the transfer there. Cash Management members also have the option to deposit their paycheck directly into their brokerage account.
The aforementioned debit card that accompanies the Robinhood Cash Management account will have an extensive collection of zero-fee ATMs in the Allpoint and MoneyPass networks. Currently, Robinhood is linked to over 75,000 ATMs in the US and abroad. The app has a pretty handy “Find ATMs” function but you can alternatively head to 7-11, Walgreens, Costco, or Target to find a participating cash point.
Robinhood began as one of the only commission-free investment options of its time, but considering the increase of fee-free investment opportunities since then, the company has lost a bit of its initial competitive edge. With the new Cash Management product coming in strong with a decent APY, FDIC insurance and great ATM access, Robinhood continues to hold its own in the industry.
Looking forward to joining Cash Management? Put your name on the waiting list here.
Thanks Caroline. I just signed up. #389,219 on the list! Ha.
I’m pretty far down on the list still too. Signed up the first day and am 120,000-ish :P
Robinhood won’t be around much longer in its current form. Nothing special about the rate. Give the backlog, go somewhere else.