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Robinhood as a financial services company with investment options and a hybrid account.
Robinhood; Alyssa Powell/Business Insider
The Robinhood Cash Management Account isn’t accepting new customers currently.
The bottom line: Robinhood Cash Management is a worthwhile option for people who also invest with Robinhood and who only receive payments via direct deposit. If you get a Robinhood Gold subscription, you’ll also be able to earn 3% APY on your account.
Pros and cons
ProsConsNo minimum opening deposit requiredCompetitive interest rateNo out-of-network ATM feesNo foreign transaction feesNeed an investment account with RobinhoodNo checkbook (May only send digital checks through the online platform)Unable to deposit paper checks or cashDoesn’t accept wire transfers
Robinhood Cash Management
You may like the Robinhood Cash Management Account if you’re looking for an account with no fees — you won’t pay fees for using an out-of-network ATM or swiping your debit card abroad, and there are no monthly service fees.
You might not like the account if you want the option to overdraw, though. If you swipe your debit card and the transaction would overdraw your account, Robinhood simply denies the transaction.
You’ll also only want to use the account if you receive your paycheck as a direct deposit. Right now, there’s no way to deposit cash or paper checks into your Robinhood Cash Management Account.
The account pays a higher interest rate than typical savings and checking accounts, but it currently isn’t available to new customers.
If you already have a Robinhood Cash Management Account, you may be able to earn 3% APY if you become a Robinhood Gold Member. To get a Robinhood Gold Subscription you’ll have to pay a $5 monthly fee.
How the Robinhood Cash Management works
You may know Robinhood as a financial services company that makes it easy to invest. The Robinhood Cash Management Account is its hybrid savings and checking account. It pays a relatively high interest rate like a high-yield savings account, but it comes with a debit card like a checking account.
The Robinhood Cash Management Account isn’t accepting new customers currently. However, you may still sign up for a Robinhood spending account, which is a separate account that does not require a brokerage account. The Robinhood spending account is a non-interest earning account, though.
Robinhood has partnerships with several banks. Most banks insure your deposits for up to $250,000, but because Robinhood has multiple partner banks, your cash in the Robinhood Cash Management account is FDIC insured for up to $1.25 million.
You’ll have free access to over 75,000 ATMs. If you use an out-of-network ATM, Robinhood won’t charge a fee, but the ATM provider might.
Robinhood trustworthiness and BBB score
The Better Business Bureau gives Robinhood an F rating. The BBB cites a large number of unresolved complaints as the reason for the score.
Robinhood hasn’t necessarily had scandals surrounding its cash management account — but is has faced scrutiny surrounding its investment platform. Since you have to have a Robinhood brokerage account to qualify for its cash management account, you might care about its investment platform issues.
Robinhood halted trading of AMC Entertainment (AMC) and GameStop (GSE) when prices spiked in January 2021, and it’s facing lawsuits over this decision. In 2020, a young Robinhood user committed suicide when he lost money through investments. Robinhood saw backlash afterward, but it has since committed to providing more educational materials.
If the scandals surrounding Robinhood’s investment platform worry you, you may decide to bank with another company.
Robinhood Cash Management Account vs. Wealthfront Cash Account
We’ve compared Robinhood to two other online investment platforms. See how it compares with Wealthfront below:
Robinhood
Wealthfront
APY
0.30% APY
APY
0.35% APY
Foreign transaction fee
None
Foreign transaction fee
2.75%
Do you need an investment account first?
Yes
Do you need an investment account first?
No
Robinhood Robinhood Cash Management AccountWealthfront Wealthfront Cash Account
Like Robinhood, Wealthfront has a single cash account to keep both your savings and spending money, and you’ll earn interest on your entire balance.
You may prefer Robinhood if you frequently travel abroad. Robinhood doesn’t charge foreign transaction fees, but Wealthfront charges 2.75% of your purchase when you swipe your card abroad. If you withdraw money from a foreign ATM, Wealthfront charges an additional $2.50.
But you may like Wealthfront if you want to receive your paycheck sooner. With Wealthfront, direct deposits can be processed up to two days early. You can also deposit checks and cash with Wealthfront, whereas you’re limited to direct deposits with Robinhood.
Robinhood Cash Management Account vs. Betterment Cash Reserve Account
Here’s how the Robinhood Cash Management Account compares with the Betterment Cash Reserve Account.
Robinhood
Betterment
APY
0.30% APY
APY
Betterment Cash Reserve Account
Foreign transaction fee
None
Foreign transaction fee
None
Do you need an investment account first?
Yes
Do you need an investment account first?
No
Robinhood Robinhood Cash Management AccountBetterment Betterment Checking Account
You may prefer Betterment if you want to keep checking and savings in two separate accounts. There is a Betterment Checking Account and a Cash Reserve Account, which acts as a savings account. Having two accounts can make it easier to keep track of your money. But Betterment only pays interest on the money in your cash reserve account, whereas Robinhood pays interest on your entire balance.
You also may like the Betterment Checking Account if you want to earn cash back on your debit card purchases.
Frequently asked questions
Is Robinhood an actual bank?
Robinhood is not a bank. The company sweeps your uninvested cash into Robinhood Cash Management, and its partner banks pay interest on your cash.
What type of account is Robinhood Cash Management?
The Robinhood Cash Management Account is a hybrid account that combines savings and checking account features. You’ll earn a competitive interest rate like a high-yield savings account, but it comes with a debit card like a checking account.