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By Faith Ashmore, Benzinga
For Americans, 2024 contains hope when it comes to tax returns. The IRS shared that as of February 16, the average tax refund is $3,207, which is 2.1% higher than last year. For millions of Americans, tax returns provide relief or are an opportunity to use the money for trips or gifts. As many households have been hit hard by rising inflation, tax returns may be especially coveted this year. But what if you were to use the return to help potentially build some wealth?
Robinhood aims to provide a unique opportunity for individuals looking to invest. The company has recently made its subscription product, Robinhood Gold, even more enticing to users. Robinhood Gold subscribers now have the opportunity to earn a 5% annual percentage yield (APY) on uninvested brokerage cash with their cash sweep program. This means that any cash sitting idle in your Robinhood brokerage account will be automatically swept into a program that earns you interest.
Robinhood says this new rate is eight times higher than the national average savings rate – based on data from Bankrate as of March 1, 2024. In other words, you can earn money while you sleep, and your money is FDIC-insured up to $2.25 million at partner banks.
With this Gold subscription, users have the ability to make larger instant deposits and gain instant access to up to $50,000 in instant deposits. Typically, it takes a few days for deposited funds to become available for investment, but Gold subscribers can bypass this waiting period, allowing them to make opportune investment decisions and seize market opportunities without any delays.
Subscribers to Robinhood Gold are also granted access to professional research from Morningstar (NASDAQ: MORN) and Level II market data from the Nasdaq Stock Exchange. Level II data provides investors with a comprehensive view of market activity, including bid and ask prices, market depth and order sizes. This additional information can prove invaluable for investors seeking a deeper understanding of market dynamics, in order to make more informed trading decisions.
The benefits dont end there. Robinhood Gold also offers margin investing at a lower rate of 8% with the first $1,000 of margin borrowing being interest-free which allows eligible users to borrow funds and increase their potential returns on investments at a lower cost. Non-subscribers pay a higher margin rate of 12%. Robinhood Gold subscribers can even receive a 3% IRA match on eligible contributions to their Robinhood IRA accounts.
Apart from margin investing, Robinhood Gold provides a range of advanced tools and benefits that can enhance an individual's investing experience. These include higher interest rates on uninvested cash, instant deposits, access to professional research and market data and a suite of features catering to both short-term investments and long-term retirement planning. As Americans consider what to do with their tax return, investing in future wealth might be the way to go.
Featured photo courtesy of Robinhood.
Benzinga is a leading financial media and data provider, known for delivering accurate, timely, and actionable financial information to empower investors and traders.
This post contains sponsored content. This content is for informational purposes only and is not intended to be investing advice. All investments involve risk and loss of principal is possible. Returns are not guaranteed. Robinhood Gold is offered through Robinhood Financial LLC and is a membership offering premium services available for a fee. The Brokerage Cash Sweep Program is an added feature to your Robinhood Financial LLC brokerage account. Interest is earned on uninvested cash swept from your brokerage account to program banks. Program banks pay interest on your swept cash, minus any fees paid to Robinhood. As of November 15, 2023, the Annual Percentage Yield (APY) that you will receive is 5% for Robinhood Gold members. Terms apply. The APY might change at any time at the program banks' discretion. Additionally, any fees Robinhood receives may vary and is subject to change. Neither Robinhood Financial LLC nor any of its affiliates are banks. Bigger instant deposits are only available if your instant deposit status is in good standing. Margin investing involves the risk of greater investment losses. Before using margin, customers must determine whether this type of strategy is right for them given their investment objectives and risk tolerance. For margin enabled customers, to earn interest through the cash sweep program, a cash balance is needed. If you have a margin balance, there is no cash balance to earn interest. Limitations apply to the retirement match and terms apply to IRAs. 3% match requires Robinhood Gold for 1 year from the date of first 3% match. Must keep Robinhood IRA for 5 years. The Robinhood IRA is available to any U.S. customer with a Robinhood brokerage account in good standing. Interest does not apply to IRAs. Robinhood does not provide tax advice. For specific questions, you should consult a tax professional. Robinhood Financial LLC (member SIPC), is a registered broker dealer. Robinhood Securities, LLC (member SIPC), is a registered broker dealer and provides brokerage clearing services. All are subsidiaries of Robinhood Markets, Inc. (Robinhood).
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COMTEX_451599774/2655/2024-04-29T08:28:55
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