Robinhood is a mobile-first stock and ETF trading platform that’s made a name for itself as a straightforward yet surprisingly powerful investing tool. You, like millions of other users, may already be familiar with Robinhood’s free version, but you may not be aware that they offer a paid membership called Robinhood Gold.
So what is Robinhood Gold, anyway? How much does it cost? What does it bring to the table? And most importantly, is it worth it?
Keep reading to find out whether Robinhood Gold is worth the price of admission.
What it Costs
Robinhood Gold is pretty cheap. At the moment it’s just:
First 30 days for free
$5 per month after free trial ends
So you’ll pay at most $55 for the first year, then $60 for each year afterwards.
For reference, $5 per month is the same it costs to subscribe to a number of different streaming services, including:
As well as a ton of subscription boxes, newspapers, magazines, and many, many other things.
So that’s the bar for what you should get for $5 a month. Now keep this question in mind while we go through the benefits of Robinhood Gold: does it provide at least as much value, enjoyment, and/or utility as being able to stream Ted Lasso or Parks and Recreation whenever you want?
The Big Deals
Robinhood Gold comes with these major benefits:
4.15% interest on uninvested brokerage cash
Bigger instant deposits
Professional research from Morningstar
Level II market data from Nasdaq
Margin investing at an interest rate of 7.25%
Since Robinhood Gold is only $60 per year, there’s a good chance that any one of those benefits (with the possible exception of bigger instant deposits) could provide more than enough value to cover the cost of a subscription. Let’s dig a little deeper into each benefit and see what they bring to the table.
Interest on Uninvested Cash
When you start using Robinhood the first thing you do is deposit some cash into your account. You usually use that cash to buy stocks, options, ETFs, and cryptocurrencies; whichever ones you think will go up in price and make you the most money.
If you don’t feel like buying anything at the moment for whatever reason—maybe you cashed out at the top of the market, or you think the market’s going to stay in negative territory for a while, etc—you can either transfer that cash out to your bank account or just leave it in your Robinhood account.
If you decide to keep your uninvested cash in your Robinhood account, you can choose to opt into Robinhood’s brokerage cash sweep program. Once you’ve opted in, Robinhood will sweep your uninvested cash to one of its partner banks, where it will be used (and insured) like any other deposit.
Normal Robinhood members can earn 1.5% annual interest on their uninvested cash. That’s not great. At 1.5% APY you’d only earn $15 in interest on a $1,000 deposit, which is well under the rate of inflation. You’d literally lose money by doing that.
Robinhood Gold members, on the other hand, earn 4.15% annual interest on their uninvested brokerage cash. That’s $41.50 a year on a $1,000 deposit. It’s still not great, and doesn’t come close to beating the inflation rate, but it’s better than nothing.
Is it Worth It?
Leaving out the inflation considerations, in today’s dollars you’d need to let Robinhood sweep $1,446 at an annual rate of 4.15% to earn over $60 in interest, as
$1,445.78 * 0.415 = 60
Bigger Instant Deposits
Instant deposits are pretty much exactly what they sound like. Normally it takes some time for a transfer from your bank to make it into your Robinhood account, but instant deposits let you skip all that waiting and get right to investing.
If you don’t have Robinhood Gold you’re limited to a maximum of $1,000 in instant deposits. So if you were to transfer $10,000 into your account you’d have $1,000 available right away but have to wait on the other $9,000.
Robinhood Gold raises that instant deposit limit by an almost absurd degree. With Gold your instant deposit limit is raised to a max of $50,000 IF your portfolio is already worth at least $50,000. Presumably that works for numbers less than $50,000—you can instant deposit up to $20,000 if your portfolio is worth at least $20,000, etc.
Is it Worth It?
Sure, if you absolutely need to deposit money in your account right now for fear of missing a lucrative opportunity. Otherwise this is more of an ancillary benefit than a real selling point.
Professional Research from Morningstar
Morningstar is well known around investing circles. Their research is thorough, timely, and generally top-notch, and many folks subscribe to Morningstar for well over $60 per year for the research alone. Robinhood’s free version doesn’t have the best research and analysis features included, so getting access to Morningstar research can be a big help.
A subscription to Robinhood Gold gets you access to in-depth research reports on around 1,700 different stocks, including up-to-date information about important events, fundamentals, data, and future prospects. There’s a reason people pay Morningstar big bucks for these things.
Is it Worth It?
This really depends on the kind of trader you are. If you’re the kind of trader who does more trend following and technical analysis/prognostication than fundamental investing, you probably won’t get too much out of this feature.
If you’re the kind of person who likes poring over dry reports and drilling down into the fundamental factors behind stocks, their prices, and their prospects, you’ll get a lot out of Morningstar research.
From a pure dollar value perspective, $60 a year is a great deal for getting access to the product of Morningstar’s stable of professional traders and analysts.
Level II Data from Nasdaq
This is kind of a weird feature. Level II data is all the real-time information from the Nasdaq’s order book, which basically means you’ll get a much more in-depth look at the transactions driving changes in stock prices.
You’re already familiar with Level I data. It’s just the bid and ask prices, both of which are available on most platforms. Level II data goes a bit deeper. It shows you what’s driving those bid and ask prices, essentially showing you the supply and demand behind stock price levels. It’s great for getting a super granular look at what’s driving stock prices, but that’s about it.
Is it Worth It?
This is a tricky one. Most people won’t ever want or need to dive into the Level II weeds. All that intraday data is only useful to people who are actively trading day in and day out, and that just isn’t most people’s bag.
On the other hand, you’ll probably get a lot of value from this feature if you’re one of those day traders looking for really detailed price information.
Margin Investing at 7.25% Interest
If you want to buy stocks, ETFs, options, or crypto, but you don’t have enough money to do it right away, you can ask Robinhood to lend you money on margin.
The general idea is that you’ll borrow the money on margin at a set interest rate, invest the money, and make enough off of the investment to repay the principal and interest with some profit leftover. The higher the interest rate you pay, the harder it is to cross that profitable threshold.
Normal Robinhood margin is currently lent out at an interest rate of 11.25%. That’s a lot of interest to pay off.
If you sign up for Robinhood Gold, though, your first $1,000 in margin is interest-free, then at 7.25% for any amounts above $1,000. That’s 4% less than with the free version, which is a lot more than it sounds like.
Is it Worth It?
Again, it depends. If you’re a savvy trader who’s already comfortable using margin then yes, it probably will be worth it to you.
This feature probably won’t be too valuable to you if you aren’t the kind of person who likes to play with borrowed money. Why? Simple: you won’t use it.
Is Robinhood Gold Worth It?
Robinhood Gold costs $5 a month. For that price you get a small but diverse set of features that can very well pay for themselves.
If you want to earn interest on your uninvested cash, it’s worth it.
If you want to deposit tons of money and have it available immediately, it’s worth it.
If you’re a value investor and want interesting research from Morningstar, it’s definitely worth it.
If you’re a day trader looking for more granular price data, it’s worth it.
And if you want to invest on margin it’s absolutely worth it.
Long story short: Robinhood Gold is probably worth it.
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