Robinhood, the popular commission-free trading app, allows users to earn interest on their uninvested cash.
However, unlike traditional banks, Robinhood does not pay interest directly to its customers.
Instead, it moves the uninvested cash into a network of FDIC-insured program banks that hold and invest the cash on behalf of customers.
The program banks then pay interest on the deposits, minus any fees paid to Robinhood, and the customers receive the interest as part of the brokerage cash sweep program.
To start earning interest, users need to sign up for the brokerage cash sweep program.
To do so, go to the account section on the app, select menu, choose investing, scroll down, and select enable cash sweep. Follow the prompts to complete the sign-up process. Once signed up, users will start earning interest on their uninvested cash.
Interest on uninvested cash is accrued daily based on the end-of-day balance at the program banks.
The interest rate is derived from the annual percentage yield (APY) of 1.5% or 4.4% for Robinhood Gold members.
Robinhood customers are not paid interest daily but receive their interest once a month on the last business day of the month, which includes interest through the end of the month.
In summary, Robinhood doesn't pay interest directly to its customers, but it offers a brokerage cash sweep program that allows users to earn interest on their uninvested cash.
Interest is accrued daily based on the end-of-day balance and paid monthly on the last business day of the month.
This article was generated using automation technology, and thoroughly edited and fact-checked by an editor on our editorial staff.