Robinhood does not offer a high yield savings account
Robinhood is an investment brokerage, not a bank. It does not hold deposit accounts or offer savings products. If you have cash sitting in a Robinhood account, it typically earns no interest at all — or in some cases, a very small amount that changes based on where Robinhood temporarily parks your money.
This matters because if you are looking for a place to earn interest on money you are not investing, Robinhood is not the right tool. A high yield savings account is a deposit account at a bank or credit union, and Robinhood cannot provide one.
Key Takeaways
- Robinhood is a brokerage for buying and selling stocks and options, not a bank that holds savings accounts.
- Cash in a Robinhood account typically earns zero interest or a minimal amount that varies based on where the company temporarily holds the money.
- If you want to earn interest on savings, you need to open a high yield savings account at a bank or credit union separate from any brokerage account.
- Some brokerages do partner with banks to offer sweep accounts that earn interest, but Robinhood's cash management options are limited compared to competitors.
What Robinhood does with your cash
When you deposit money into Robinhood but do not when ready invest it, that cash has to go somewhere. Robinhood uses what is called a sweep program — the company moves your uninvested cash to partner banks overnight. Those banks hold it in non-interest-bearing accounts, meaning your money earns nothing.
Robinhood does not pay you interest on this swept cash. The company may earn interest itself on the money, but none of that flows back to you. This is different from how some other brokerages work: competitors like Fidelity and Charles Schwab offer sweep accounts that do pay interest, though the rates vary.
Why Robinhood's setup differs from a bank
Robinhood is regulated as a brokerage, not a bank. Banks are required to hold customer deposits and can offer savings products. Brokerages are designed to hold money temporarily while you trade. The business model is different, and so are the rules about what they can do with your cash.
This also means your money in Robinhood is protected differently than it would be in a bank. At a bank, deposits are insured by the FDIC up to $250,000 per account holder per institution. At Robinhood, your cash is protected by SIPC insurance, which covers up to $500,000 but works differently and covers different types of loss.
Where to actually earn interest on savings
If you want to earn interest on money you are not investing, you need a deposit account at a bank or credit union. High yield savings accounts are offered by online banks like Marcus, Ally, American Express Bank, and many others. Credit unions also offer savings accounts, sometimes with competitive rates.
These accounts are separate from any brokerage account. You open them at a bank, deposit money there, and the bank pays you interest. The rate changes over time based on what the Federal Reserve does with interest rates, but right now many high yield savings accounts pay between 4% and 5% annually — far more than Robinhood's zero.
If you use Robinhood to invest and also want to earn interest on savings, the simplest approach is to keep those two accounts separate: use the bank account for money you want to save and earn interest on, and use Robinhood only for money you are actively investing.
How other brokerages handle cash differently
Some brokerages have recognized that customers want their cash to earn something. Fidelity offers a sweep program that moves uninvested cash into money market funds or interest-bearing accounts. Charles Schwab offers similar options. These are not the same as a high yield savings account — they are still brokerage products — but they do pay more than zero.
Robinhood has not moved in this direction. The company's focus remains on trading, not on cash management. If earning interest on your uninvested cash is important to you, Robinhood is not the right brokerage for that purpose.
What to do if you have cash sitting in Robinhood
If you already have money in Robinhood that you are not using to trade, you have a few options. You can invest it if you are comfortable doing so. You can transfer it to a high yield savings account at a bank and earn interest there. Or you can leave it in Robinhood, knowing it will earn nothing.
Transferring money out of Robinhood to a bank usually takes three to five business days. The process is straightforward: you initiate an external transfer from Robinhood to your bank account, and the money moves automatically. There is no fee for this on either end.
Frequently Asked Questions
Does Robinhood pay any interest on cash?
No. Robinhood does not pay interest on uninvested cash. The company sweeps your cash to partner banks, but you receive no interest on it. If you want your money to earn interest, you need to move it to a bank or credit union savings account.
Is my money safe in Robinhood if it earns no interest?
Your cash is protected by SIPC insurance up to $500,000, which covers losses from brokerage failure. This is different from FDIC insurance at a bank. Your money is safe from Robinhood going under, but you are not earning anything on it while it sits there.
Can I move money from Robinhood to a high yield savings account?
Yes. You can transfer money out of Robinhood to any bank account you own. Initiate an external transfer from the Robinhood app or website, provide your bank details, and the money typically arrives in three to five business days. There is no fee.
What is the difference between a brokerage and a bank?
A bank holds deposits and offers savings products. A brokerage buys and sells investments on your behalf. Robinhood is a brokerage. Banks are regulated to offer interest-bearing accounts; brokerages are not. If you want to earn interest on savings, you need a bank account.
Do other brokerages offer better cash management than Robinhood?
Yes. Fidelity and Charles Schwab both offer sweep programs that pay interest on uninvested cash. If cash management is important to you, those brokerages may be a better fit than Robinhood.