Brokerage cash sweep program interest rate | Robinhood

Brokerage cash sweep program interest rate

When you sign up for a Robinhood brokerage account, you’ll be enrolled in the Brokerage cash sweep program at onboarding by default.

How do I earn interest?

Robinhood doesn’t pay interest. Instead, we move your eligible uninvested cash (unrestricted cash intended for investing that has not yet been invested or spent) into our network of FDIC insured program banks that hold and invest your cash. These FDIC insured program banks then pay interest on those deposits, minus any fees paid to Robinhood, which you receive as part of our brokerage cash sweep program.

What does it mean to earn interest?

You’ll earn a 5% annual equivalent rate (AER) on your uninvested brokerage cash that is swept to the banks in our program.*

For example, if you start January 1 at 5% AER with $1,000 in uninvested brokerage cash that is swept to a program bank, you could earn over $50 by January of the following year. This includes compounding, assuming you don’t deposit, invest, or withdraw funds during the entire year.

You’re paid interest by the program banks monthly, and you can keep track of how much interest you’ve earned in the app in Account (person icon) → Menu (3 bars) → InvestingCash sweep program.

Could the interest rate change?

The brokerage cash sweep AER paid by program banks minus fees paid to Robinhood is 5%. The AER your cash earns is subject to change.

What balance do I earn interest on?

You earn interest on your uninvested brokerage cash that’s swept to the program banks. You only start earning interest once these banks receive your cash. This is affected by the timing of trades, deposits, or withdrawals.

For example, when you purchase a stock, the cash might not be taken out of your account until 1 business day after the trade occurs. In this case, you would continue to earn interest during that trade day, even if that cash is no longer available to spend.

The reverse is true as well—if you sell a stock, you may not get the cash until 1 day after the trade occurs. In this case, you would only start earning interest on that cash after it settles and is swept to the program banks.

What’s uninvested brokerage cash?

Uninvested brokerage cash is any available cash that you have in your brokerage account that you have not yet invested or spent. This money is what is swept (or moved) to program banks where it starts to earn interest.

You can find your swept cash balance in the app in Account (person icon) → Menu (3 bars) → InvestingCash sweep program.

Note

Additionally, 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.

Is there a minimum or maximum amount I can earn interest on?

No, you’ll start earning interest on your first cent. There’s also no maximum brokerage cash sweep balance that you can earn interest on, but cash deposited to these banks will only be covered by FDIC insurance coverage up to $2.25 million (up to $250,000 per program bank, inclusive of deposits you already hold at the bank in the same ownership capacity). If you opt out of one or more program banks, your FDIC insurance coverage may be reduced.

How is daily interest calculated?

Interest is accrued daily based on your end of day balance at the program banks. Your balance is multiplied by the daily interest rate, which is derived from the 5% AER.

Will my interest be compounded daily?

Yes, interest on your uninvested brokerage cash that is swept to the program banks will be compounded daily. Each day, you earn interest on your balance, and that earned interest itself also earns interest. Over time, your uninvested brokerage cash multiplies and grows on its own. Compound interest is a powerful tool to help build and accumulate wealth over time. Interest is paid on a monthly basis.

When do I get paid?

You’ll be paid interest once a month on the last business day of the month*, which will include interest through the end of the month. If the last day of the month falls on a non-business day, you will be prepaid interest for those days on the last business day.

For example, if the last day of the month is a Sunday, that month’s interest will be paid on the preceding Friday, along with what you would earn on Saturday and Sunday.

*In rare cases, you may be paid interest early. This can happen if you leave the program, if your cash moves to a different program bank (e.g. opting out of a bank), or if you make multiple transactions in your account in a short period of time.

Disclosures

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

The brokerage cash sweep is a default feature to your Robinhood brokerage account. 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. The annual equivalent rate (AER) is 5% as of November 30, 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.

With the brokerage cash sweep program, the eligible uninvested cash in your brokerage account (unrestricted cash intended for investing but that you have not yet invested or spent) is swept to program banks, where it becomes eligible for FDIC insurance up to $2.25 million or $250,000 per program bank, inclusive of any other deposits you may already hold at the bank in the same ownership capacity. If you opt out of one or more program banks, your FDIC insurance coverage may be reduced. Note that until funds are swept to a program bank, they are held in your brokerage account which is protected by SIPC. Once funds are swept to a program bank, they are no longer held in your brokerage account and are not protected by SIPC. However, these funds are eligible for FDIC insurance through the Program Banks subject to FDIC insurance coverage limits and any capacity limitations at the banks. Review the Brokerage Cash Deposit Sweep Program Agreement for more information.

Member of SIPC, which 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 and provides brokerage clearing services.

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 US by the SEC and FINRA. Robinhood UK and Robinhood Securities, LLC are subsidiaries of Robinhood Markets, Inc.

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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.