It's been nearly a year since the stock investment and cryptocurrency company Robinhood paused its launch of no-fees checking and savings accounts. It was forced to make changes after mistakenly claiming that its industry-leading 3% interest rates were insured by the SIPC. Now, Robinhood is finally announcing plans to move forward with a revamped version called Cash Management.
In lieu of a dedicated checking or savings account, Cash Management makes use of the funds already sitting within a user's main brokerage account that haven't yet been invested or spent. At launch, users enrolled in this new service will earn up to a 2.05% Annual Percentage Yield (APY) on unused funds every month. However, like most financial institutions, this rate is variable and subject to change over time. All uninvested cash and earned interest are eligible for FDIC insurance up to a total of $1.25M, or up to $250,000 per bank, subject to FDIC rules.
Cash Management users will also have access to their unspent brokerage funds through an official Mastercard-issued debit card. This card can be used to make purchases online, in store, and to withdrawal money from any of the 75,000+ ATMs within the Allpoint or MoneyPass network. Finally, all Cash Management accounts are free of foreign transaction fees or maintenance fees, and there are no account minimums.
If you'd like to enroll in Robinhood's upcoming Cash Management service, add your email address to the waitlist here.
This week, Robinhood started to roll out its Cash Management feature to a small number of users. As of today, the Annual Percentage Yield (APY) on unused funds is 1.80%, and these rates are subject to further changes. There are no account minimums or fees required to receive interest on unused brokerage funds, though other fees still apply.