Margin + Cash Management | Robinhood

Margin + Cash Management

Note

Cash Management is no longer accepting new customers at this time.

You can get even more out of margin with Cash Management. If you’ve enabled Margin investing, you can also turn on Margin withdrawal to use margin for day-to-day spending and withdrawals.

Here’s an example of how you can use Margin withdrawal:

  • You have $5,000 of uninvested cash in your account

  • You buy $5,000 of marginable MEOW stock

  • You use your Robinhood debit card to buy a $1,000 computer

Since you didn’t have any cash left in your account when you used your debit card, you bought the computer using margin. In other words, you borrowed $1,000 against the $5,000 of MEOW stock in your portfolio to complete the purchase and have a $1,000 margin balance.

Will I be able to use my debit card to make purchases if I have margin investing enabled?

Yes! Using your debit card to make purchases works similarly to withdrawing money from your brokerage account. If you turn on Margin withdrawal, you can use margin for day-to-day spending too. For this reason, you might notice your debit balance (Margin used) increases when transactions are processed, similar to the way it would increase if you were borrowing cash to purchase stocks. Before using margin withdrawal, you need to decide if borrowing money is right for you. Amounts borrowed are subject to interest rate charges and other requirements. Check out What's margin investing for more details.

Is it possible to fall below the minimum equity requirement of $2,000?

If you’re borrowing money, we’ll generally decline transactions that would take your account below the $2,000 equity minimum. An exception would be for a transaction that results in a different amount than initially authorized (such as a tip at a restaurant or a gas purchase that exceeds the hold placed by the gas station). If this happens, your account could fall below the $2,000 equity minimum, potentially resulting in a minimum equity call.

Can I overdraw my account or make a purchase that will trigger a margin call?

We’ll generally deny any authorization that would put your account into a margin call. An exception would be for an unauthorized transaction (such as a tip that exceeds the amount authorized), which could result in a margin call.

Margin calls can also happen for a variety of other reasons—a decline in the value of your holdings, ACH reversals, or options assignments—causing your portfolio value* to fall below your margin maintenance requirement.*

If you get a margin call, your portfolio value must be more than your minimum margin maintenance requirement to avoid Robinhood liquidating your positions to increase your portfolio value to be more than your minimum margin maintenance requirement.

Note

*When calculating minimum margin maintenance requirements, your portfolio value doesn’t include any crypto held by our affiliate, Robinhood Crypto, LLC.

Does spending affect my daily day trade limit?

Yes. In addition to trading activity, your intraday spending transactions and withdrawals will affect your day trade limit, which is issued at the beginning of each trading day.

Robinhood Gold gives me bigger Instant Deposits, so can I spend them with my debit card?

No. Instant Deposits aren’t withdrawable, so they aren’t available to use with your Robinhood debit card.

How do I know if I’m spending margin or cash?

Our spending will always be deducted from your cash first. If your spending exceeds the amount of available cash, your debit balance (Margin used) will increase when transactions are processed, similar to the way it would increase if you were borrowing cash to purchase stocks.

You can find your Margin used in Account (person) → Menu (3 bars) or Settings (gear) → InvestingMargin investing.

Keep in mind

Borrowed cash is subject to interest.

Disclosures

Spending account is offered through Robinhood Money, LLC ("RHY") (NMLS ID: 1990968), a licensed money transmitter. RHY is not a bank. Review our list of licenses for more information.

Cash Management is an added feature to your Robinhood Financial LLC brokerage account. Neither Robinhood Financial LLC nor any of its affiliates are banks. The debit card is issued by Sutton Bank, Member FDIC, pursuant to a license from Mastercard® International Incorporated.

Margin borrowing increases your level of market risk and, as a result, has the potential to magnify both your gains and losses. Before using margin, customers must determine whether this type of strategy is right for them given their investment objectives and risk tolerance. Regardless of the underlying value of the securities you purchased, you must repay your margin loan. Robinhood Financial can change its maintenance margin requirements at any time without prior notice. If the equity in your account falls below the minimum maintenance requirements (varies according to the security), you’ll have to deposit additional cash or acceptable collateral. If you fail to meet your minimums, Robinhood Financial may be forced to sell some or all of your securities, with or without your prior approval.

For more information, review FINRA’s Investor Alert and Robinhood Financial’s Customer Relationship Summary, Margin Disclosure Statement, and Margin Agreement. These disclosures contain important information on Robinhood Financial’s products and services, conflicts of interests, lending policies, interest charges, and the risks associated with margin investing enabled accounts.

Robinhood Gold is an account offering premium services available for a monthly fee. Not all investors will be eligible to trade on margin. Margin involves the risk of greater investment losses. Additional interest charges may apply depending on the amount of margin used.

Robinhood Financial charges a standard margin interest rate of 12% and a margin interest rate of 8% for customers who subscribe to Gold. The margin interest rate is calculated by adding 6.5% (for non-Gold customers) or 2.5% (for Gold customers) to the upper bound of the Target Federal Funds Rate, which is set by the Federal Reserve and is subject to change without notice. The formulas used to calculate the margin interest rate are subject to change at Robinhood Financial’s discretion. The margin rates shown are as of July 27, 2023 and might change at any time without notice and at Robinhood Financial’s discretion. The standard margin interest rate will be rolled out to customers who do not subscribe to Gold in phases over a period of time, subject to eligibility criteria, and so may not be available immediately to all customers.

Examples listed are for illustrative purposes only. They aren't a recommendation of a security or investment strategy.

Crypto trading is offered through an account with Robinhood Crypto. Robinhood Crypto is not a member of SIPC or FINRA. Crypto isn't stock and isn't protected by either FDIC or SIPC. For more information, review the Robinhood Crypto Risk Disclosure.

Robinhood Financial LLC (member SIPC) is a registered broker-dealer. Robinhood Securities, LLC (member SIPC) is a registered broker-dealer and provides brokerage clearing services. Robinhood Crypto, LLC provides crypto trading. All are subsidiaries of Robinhood Markets, Inc. (‘Robinhood’).

Was this article helpful?
Reference No. 3311908
Still have questions? Contact Robinhood Support
PARTICIPATION IS POWER™

All investing involves risk.

Brokerage services are offered through Robinhood Financial LLC, (“RHF”) a registered broker-dealer (member SIPC) and clearing services through Robinhood Securities, LLC, (“RHS”) a registered broker dealer (member SIPC). Cryptocurrency services are offered through Robinhood Crypto, LLC (“RHC”) (NMLS ID: 1702840). The Robinhood Money spending account is offered through Robinhood Money, LLC (“RHY”) (NMLS ID: 1990968), a licensed money transmitter. Credit card products are offered by Robinhood Credit, Inc. (“RCT“) (NMLS ID: 1781911 and issued by Coastal Community Bank, Member FDIC, pursuant to a license from Visa U.S.A. Inc.

The Robinhood Cash Card is a prepaid card issued by Sutton Bank, Member FDIC, pursuant to a license from Mastercard® International Incorporated. RHF, RHY, RHC and RHS are affiliated entities and wholly owned subsidiaries of Robinhood Markets, Inc. RHF, RHY, RHC and RHS are not banks. Securities products offered by RHF are not FDIC insured and involve risk, including possible loss of principal. Cryptocurrencies held in RHC accounts are not covered by FDIC or SIPC protections and are not regulated by FINRA. RHY products are not subject to SIPC coverage but funds held in the Robinhood Money spending account and Robinhood Cash Card account may be eligible for FDIC pass-through insurance (review the Robinhood Cash Card Agreement and the Robinhood Spending Account Agreement).

Options trading entails significant risk and is not appropriate for all customers. Customers must read and understand the Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount.

Commission-free trading of stocks, ETFs and options refers to $0 commissions for Robinhood Financial self-directed individual cash or margin brokerage accounts that trade U.S. listed securities and certain OTC securities electronically. Keep in mind, other fees such as trading (non-commission) fees, Gold subscription fees, wire transfer fees, and paper statement fees may apply to your brokerage account. Please see Robinhood Financial's Fee Schedule to learn more.

© 2024 Robinhood. All rights reserved.
Follow us on

All investing involves risk.

Brokerage services are offered through Robinhood Financial LLC, (“RHF”) a registered broker-dealer (member SIPC) and clearing services through Robinhood Securities, LLC, (“RHS”) a registered broker dealer (member SIPC). Cryptocurrency services are offered through Robinhood Crypto, LLC (“RHC”) (NMLS ID: 1702840). The Robinhood Money spending account is offered through Robinhood Money, LLC (“RHY”) (NMLS ID: 1990968), a licensed money transmitter. Credit card products are offered by Robinhood Credit, Inc. (“RCT“) (NMLS ID: 1781911 and issued by Coastal Community Bank, Member FDIC, pursuant to a license from Visa U.S.A. Inc.

The Robinhood Cash Card is a prepaid card issued by Sutton Bank, Member FDIC, pursuant to a license from Mastercard® International Incorporated. RHF, RHY, RHC and RHS are affiliated entities and wholly owned subsidiaries of Robinhood Markets, Inc. RHF, RHY, RHC and RHS are not banks. Securities products offered by RHF are not FDIC insured and involve risk, including possible loss of principal. Cryptocurrencies held in RHC accounts are not covered by FDIC or SIPC protections and are not regulated by FINRA. RHY products are not subject to SIPC coverage but funds held in the Robinhood Money spending account and Robinhood Cash Card account may be eligible for FDIC pass-through insurance (review the Robinhood Cash Card Agreement and the Robinhood Spending Account Agreement).

Options trading entails significant risk and is not appropriate for all customers. Customers must read and understand the Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount.

Commission-free trading of stocks, ETFs and options refers to $0 commissions for Robinhood Financial self-directed individual cash or margin brokerage accounts that trade U.S. listed securities and certain OTC securities electronically. Keep in mind, other fees such as trading (non-commission) fees, Gold subscription fees, wire transfer fees, and paper statement fees may apply to your brokerage account. Please see Robinhood Financial's Fee Schedule to learn more.

© 2024 Robinhood. All rights reserved.