Cash Earning High Interest On Robinhood (Not Gold and No Fees).

Now, sometimes, I want to park my uninvested money in Robinhood. While parked, I know I earn interest, but often, I get those Robinhood Gold account advertisements. I want my cash earning high interest on Robinhood. Still, I want to refrain from signing up for Robinhood Gold or paying extra fees.

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What Exactly Does It Mean When Your Cash Earns Interest On Robinhood?

Let’s face it, this might be a newb question, but the Robinhood platform seems to attract newer investors, so let’s cover the basics.

Just like money deposited into your regular bank’s savings account, money on Robinhood is technically deposited on their platform. Also, just like your bank entices you to deposit money with interest, money given to you for parking deposited money, Robinhood seems to give you money for depositing unused money.

This money has to be uninvested in Robinhood, and the rate, like that of a typical bank savings account, is low. <1%, I found.

To recap, Robinhood pays you a small interest amount, paid monthly, for money that remains uninvested in your Robinhood account.

Robinhood Interest On Uninvested Cash?

Yes, your money isn’t in your account if it is invested. What is in your account is the security you invested in.

My findings are that Robinhood only pays interest on uninvested cash.

The Cash-earning Interest Rate On Robinhood?

Low, Robinhood’s cash-earning interest rate is low compared to its Gold plan, which is>5%, and what you can earn in a high-yield savings account(HYSA) or a T-bill ladder.

Check the Robinhood site for their most current interest rate.

Why Is Robinhood Interest Rate So High In Their Ads?

From what I found, when Robinhood advertises its high interest rates, it’s associated with its Gold Membership.

Okay, How Do I Earn High Interest On My Robinhood Account (No Fees)?

Now, this might sound like a trick since I found a way to use my uninvested money, keep it safe, and still earn a high interest rate.

Take this with a grain of salt because the trick is….. to invest the money.

Don’t leave. I use the money I am not currently using to buy securities that invest in T-Bills.

Cash Earning High Interest On Robinhood In?

Currently, I am parking my money by buying iShares 0-3 Month Treasury Bond ETF(SGOV).

This bond ETF yields over 5% of the money invested in it.

How Often Am I Being Paid Interested?

I was paid at the beginning of the month for my earned interest.

What If I Sell Before The End Of The Month?

Since I invested my parked money in this Bond ETF, what happens to the interest I have already earned if I sell out and use my money elsewhere?

Well, the bond ETF has grown in value over the month, so when I go to sell, the ETF grows in value over the month. It resets (drops in value) at the start of a new month when you get the interest.

However, let me address my question. As the month progresses, I might not get the interest at the start of a new month, but when I sell the Bond ETF before this time, I collect the gains in value the ETF made over the month.

So again, my money grows as I park it in this Bond ETF, even if I don’t wait till the next interest payment and sell out early.

Is My Money Safe?

Now, this is not FDIC insured – that’s obvious since this is a security. However, this bond ETF is invested in one of the world’s best-known securities: Treasury Bills!

Am I Making In Interest With My Parked Money?

The iShares 0-3 Month Treasury Bond ETF(SGOV) is listed as yielding about 5.27%; please check for current yield rates.

This high-interest bond ETF is giving me a high-interest return with no fees. So I’m happy.