Brokerage cash sweep program | Robinhood

Brokerage cash sweep program

Uninvested cash is a potentially valuable part of your investment portfolio. Typical alternatives for your uninvested cash include leaving it in your brokerage account (not earning interest) or sweeping (automatically transferring) it to a bank deposit account as part of our sweep program.

Robinhood U.K. Ltd introduces UK customers to Robinhood Securities, LLC for various activities, including for arranging custody services. Both entities are subsidiaries of Robinhood Markets, Inc.

Robinhood UK customers join the Brokerage Cash Sweep Program at onboarding (by default) with their Robinhood brokerage account. This sweep service is an added feature for holding eligible uninvested cash. If you don’t want to participate in this service, you can disable it and your uninvested cash will remain in your Robinhood non-interest bearing brokerage account under SIPC protection.

With this service, the eligible uninvested cash in your brokerage account (unrestricted cash intended for investing that you haven’t yet invested) is swept to these program banks and will remain visible in your Robinhood brokerage account. Cash deposited into these banks is eligible for Federal Deposit Insurance Corporation (FDIC) insurance up to a total maximum of $2.25 million (as of October 1, 2023), inclusive of deposits you may already hold at banks in the same ownership capacity. While the FDIC insurance coverage limit at each bank is $250,000, $2,000 is reserved for accrued interest at each bank. If you choose to opt out of one or more program banks, your maximum FDIC insurance coverage may be reduced.

Example

Let’s say you have a $260,000 cash balance that is eligible to be swept. You’ll have the first $248,000 swept into the first bank on the program bank list, and the next $12,000 will be swept into the second bank on the program bank list (subject to any capacity limitations at the banks).

You are responsible for monitoring the amount of your deposits with each program bank (including deposits made through the brokerage cash sweep program or in other accounts at the program bank held in the same ownership capacity) to determine whether the amount on deposit exceeds the limit of available FDIC insurance.

Interest is earned on uninvested cash swept from your brokerage account to program banks. Program banks pay interest on your swept cash, minus any fees paid to Robinhood.

There may be reasons why you choose not to earn interest on uninvested cash. For those customers, we provide the option to opt-out of the interest earning brokerage cash sweep program through the program banks, in which case the money will be held in a brokerage account at Robinhood Securities, LLC that is protected up to $250,000 under SIPC, not FDIC, as explained in this article.

Robinhood Securities, LLC provides brokerage clearing services from the US to you as a UK customer and therefore the UK Financial Services Compensation Scheme (FSCS), which protects UK brokerage customers up to £85,000, doesn’t apply.

Which banks are in our network?

The following are our FDIC-insured program banks. Keep in mind, Robinhood may change the network of program banks at any time. If a change is made, we’ll let you know in advance.

  • Goldman Sachs Bank USA
  • HSBC Bank USA, N.A.
  • Wells Fargo Bank, N.A.
  • Citibank, N.A.
  • Bank of Baroda
  • U.S. Bank, N.A.
  • Bank of India
  • Truist Bank
  • M&T Bank
  • First Horizon Bank
  • EagleBank
  • CIBC Bank USA

Contact us if you have any questions or want to exclude a specific bank from your sweep options. Keep in mind, you can ask to exclude a bank only after it’s been added. Review the Brokerage Cash Sweep Program Agreement for more information.

How does a bank get picked for swept cash?

We choose the banks your cash gets swept to using a predetermined order. If you’d like to exclude a specific bank from your sweep options, contact us.

Example

Let’s say you already have deposits at one of the program banks that, when combined with the cash swept to that bank through the brokerage cash sweep, make your cash at that bank go over $250,000. Then you might want to exclude that bank from your sweep options.

Do I have access to the swept cash?

Yes! Your uninvested brokerage cash in the program banks is available for withdrawing and investing through your brokerage account and the cash balance is visible in your Robinhood brokerage account.

Pattern day trading

If you've been flagged as a pattern day trader (PDT), you can still sign up for the brokerage cash sweep program, but you won’t be eligible to earn interest until your PDT flag is removed.

If you're flagged as a PDT while enrolled, your enrollment will be paused from the brokerage sweep program and your cash swept back from the program banks. Any accrued interest will be paid to your brokerage account, but you won’t accrue any additional interest until you are unflagged as a PDT. For more details, review Brokerage cash sweep and PDT.

How to disable or enable it

  1. Go to Account (person icon) → in the app, Menu (3 bars)
  2. Select Investing
  3. Scroll to Cash sweep program, and then select Disable or Enable cash sweep
  4. Follow the prompts to complete the change

US taxes

The interest earned is considered US-sourced income and will be reported on your annual IRS Form 1042-S. For more details, review US taxes and forms.

Disclosures

We set the annual equivalent rate (AER) at 5% as of 30 November 2023. The AER might change at any time at the program banks' discretion. Additionally, any fees Robinhood receives may vary and is subject to change. Neither Robinhood Securities, LLC nor any of its affiliates are banks.

Note that until funds are swept to a program bank, they are held in your Robinhood brokerage account which is protected by SIPC. Once funds are swept to a program bank, they are legally no longer held in your Robinhood brokerage account, even though they’re still shown in your account for investment purposes. Swept funds aren’t protected by SIPC but are eligible for FDIC insurance through the Program Banks, which are subject to FDIC insurance coverage limits and any capacity limitations at the banks. Review the Brokerage Cash Sweep Program Agreement for more information.

SIPC protects securities customers of its members up to $500,000 (including $250,000 for claims for cash). Explanatory brochure available upon request or at www.sipc.org. Robinhood Securities, LLC (member SIPC) is a registered broker-dealer.

Robinhood U.K. Ltd (Robinhood UK) is a company registered in England and Wales (09908051) and is authorised and regulated by the Financial Conduct Authority (FRN: 823590). Robinhood UK onboards UK customers and has the lead customer relationship with UK customers in relation to their use of the Robinhood UK app and website. Robinhood UK introduces UK customers to Robinhood Securities, LLC for order routing, execution, clearing, settlement, arranging custody services and margin lending to eligible UK customers with margin accounts. Robinhood Securities, LLC is regulated in the U.S. by the SEC and FINRA. Robinhood UK and Robinhood Securities, LLC are subsidiaries of Robinhood Markets, Inc.

Why aren’t weekend cash deposits swept to my bank?

Weekend cash deposits aren’t swept to a program bank until Monday because it’s outside of banking business hours. Check out Weekend investing to learn more about when stock trading over the weekend.

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All investing involves risk and a loss of principal is possible.

Robinhood U.K. Ltd (Robinhood UK) is authorised and regulated by the Financial Conduct Authority (FRN: 823590). Robinhood UK onboards UK customers and has the lead customer relationship with UK customers in relation to their use of the Robinhood UK app and website. Robinhood UK introduces UK customers to Robinhood Securities, LLC for order routing, execution, clearing, settlement, arranging custody services and margin lending to eligible UK customers with margin accounts. Robinhood Securities, LLC is regulated in the U.S. by the SEC and FINRA. Robinhood UK and Robinhood Securities, LLC are subsidiaries of Robinhood Markets, Inc.

Robinhood U.K. Ltd is a private limited company registered in England and Wales (09908051).

Robinhood does not provide investment advice. Individual investors should make their own decisions.

Commission-free trading of stocks refers to $0 commissions for Robinhood self-directed individual brokerage accounts that trade U.S. listed securities and ADRs. Keep in mind, other costs such as regulatory fees may apply to your brokerage account. Please see Robinhood UK’s Fee Schedule to learn more.

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All investing involves risk and a loss of principal is possible.

Robinhood U.K. Ltd (Robinhood UK) is authorised and regulated by the Financial Conduct Authority (FRN: 823590). Robinhood UK onboards UK customers and has the lead customer relationship with UK customers in relation to their use of the Robinhood UK app and website. Robinhood UK introduces UK customers to Robinhood Securities, LLC for order routing, execution, clearing, settlement, arranging custody services and margin lending to eligible UK customers with margin accounts. Robinhood Securities, LLC is regulated in the U.S. by the SEC and FINRA. Robinhood UK and Robinhood Securities, LLC are subsidiaries of Robinhood Markets, Inc.

Robinhood U.K. Ltd is a private limited company registered in England and Wales (09908051).

Robinhood does not provide investment advice. Individual investors should make their own decisions.

Commission-free trading of stocks refers to $0 commissions for Robinhood self-directed individual brokerage accounts that trade U.S. listed securities and ADRs. Keep in mind, other costs such as regulatory fees may apply to your brokerage account. Please see Robinhood UK’s Fee Schedule to learn more.

UK Privacy policy

Robinhood, 85 Willow Road, Menlo Park, CA 94025.© 2024 Robinhood. All rights reserved.