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Robinhood Rolls Out 1.80% APY Cash Management Account to First Customers
Chanelle Bessette is a personal finance writer at NerdWallet covering banking. She previously worked at Fortune, Forbes and the Reno Gazette-Journal. She is also a spokesperson for the banking team, and her expertise has appeared in The New York Times, Vox and Apartment Therapy.
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A year after its first attempt to launch a bank-style account, brokerage app Robinhood announced today that it has begun to roll out its new cash management feature — which offers 1.80% APY on uninvested cash — to the first set of customers who were on the Robinhood Cash Management waitlist.
Cash management accounts, which have risen in prominence over the past year, are typically offered by nonbank financial institutions, like investment firms and robo-advisors. They allow customers to spend and save money in one account, often earning a higher interest rate than accounts at traditional brick-and-mortar banks. Customers typically also have the benefit of connecting a brokerage account, which allows them to keep multiple accounts under the same roof.
A savings account is a place where you can store money securely while earning interest.
A savings account is a place where you can store money securely while earning interest.
4.60%SoFi members with Direct Deposit or $5,000 or more in Qualifying Deposits during the 30-Day Evaluation Period can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. Members without either Direct Deposit or Qualifying Deposits, during the 30-Day Evaluation Period will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
5.50%*Base annual percentage yield (variable) is 4.75% as of 7/31/23. 5.50% APY reflects a .75% boost available as a special offer with qualifying deposit. Terms apply. Cash Reserve is only available to clients of Betterment LLC, which is not a bank, and cash transfers to program banks are conducted through clients’ brokerage accounts at Betterment Securities.
Min. balance for APY
$0
CDs (certificates of deposit) are a type of savings account with a fixed rate and term, and usually have higher interest rates than regular savings accounts.
CDs (certificates of deposit) are a type of savings account with a fixed rate and term, and usually have higher interest rates than regular savings accounts.
5.55%All Bread Savings APYs are accurate as of 11/30/2023. APYs are subject to change at any time without notice. Offers apply to personal accounts only. Fees may reduce earnings. To open a CD, a minimum of $1,500 is required and must be deposited in a single transaction. A penalty will be imposed for early withdrawals on CDs. At maturity, your CD will automatically renew and earn the base interest rate in effect at that time.
0.50%SoFi members with Direct Deposit or $5,000 or more in Qualifying Deposits during the 30-Day Evaluation Period can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. Members without either Direct Deposit or Qualifying Deposits, during the 30-Day Evaluation Period will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
Robinhood Cash Management customers will receive a Mastercard debit card — issued by Sutton Bank — with one of four different designs (green, white, black or American Flag), and they will be able to withdraw cash for free from more than 75,000 ATMs. Customers can use Cash Management to pay bills as well as to fund Apple Pay, Google Pay and Samsung Pay. The feature has no account minimums, no transfer fees and no foreign transaction fees; other fees may still apply to a customer’s Robinhood brokerage account.
Like other brokerages offering cash management accounts, Robinhood can’t directly offer Federal Deposit Insurance Corp. coverage. It works with partner banks to automatically sweep customers’ funds into FDIC-protected accounts, thereby providing up to $1.25 million in federal insurance.
Last year, Robinhood attempted to launch a 3.00% APY cash management feature on its own, but it never left the ground: Regulators took issue with the lack of federal insurance on deposits. Now Robinhood, like other CMA providers, has a workaround that allows it to offer a banklike product.
Details about the APY
Cash Management’s 1.80% annual percentage yield is lower than the 2.05% APY that the company touted when it announced the feature was in the works in October, but it falls in line with the downward trend in interest rates that cash management accounts have been experiencing in recent months. The company said that customers can start earning interest with as little as $1.
Those interested in the account can still join the Robinhood Cash Management waitlist to be notified when it becomes available to the next block of customers.
