This Broker Now Offers Customers At Least 11x the Average Interest Rate on Accounts. Worth It?

It's the last straw -- I'm transferring my savings to Robinhood.

As the stock market crumbles like moist cheesecake, folks search for a safe place to invest their savings. Just in time for the holidays, financial app Robinhood is upping its interest rates on Robinhood Gold accounts to a 4.40% annual percentage yield (APY) on uninvested cash.

It works like this: Customers who subscribe to Robinhood Gold can elect to participate in a cash sweeps program. The program deposits uninvested money with partner banks, and that cash will earn 4.40% interest. Customers can withdraw or invest swept cash at any time.

Note: A Robinhood brokerage account is separate from a Robinhood spending account. You can transfer money between them whenever you want.

Robinhood's new 4.40% rate is hard to beat. It's nearly 12 times the average national interest rate on savings accounts based on the FDIC's figures, or roughly 18 times the average according to recent data by Bankrate. It's even better than the rate on my Chime Savings Account, which offers a 2.00% APY on my Checking and Savings accounts.

Now I'm tempted to transfer my savings to Robinhood. After all, 4.40% interest is the highest I've come across, and I already use Robinhood as my go-to stock broker.

But is the higher APY worth moving your savings to Robinhood?

How much could I earn?

Only Robinhood Gold subscribers get access to the best rates. Non-subscribers get a much lower 1.5% interest rate on uninvested deposits. It costs $5 an month for a Robinhood Gold subscription, which includes perks like Morningstar research and better margin rates.

It totals $60 a year for a Gold subscription. Let's calculate how much you would need to deposit for a Gold subscription to pay for itself, assuming the following:

• A subscription fee of $5 a month
• A 4.40% average interest rate over one year

For an account to pay for itself, you'd need to keep $1,364 uninvested cash in your Robinhood account. That assumes you immediately replace the monthly $5 charge deducted from your account.

Let's say you want to earn even more than the cost of a Robinhood Gold subscription. The average American's savings account balance is $4,500. Let's assume the following:

• A consistent annual yearly interest rate of 4.40%
• Savings remain flat at $4,500.

The average American would make $198/year in interest, more than three times the cost of a Robinhood Gold subscription. Remember, Robinhood is likely to shift rates in line with the Federal Reserve. Thus far, Robinhood has raised rates multiple times this year, but that could change.

Is it worth it?

Yes, it's worth moving your savings to Robinhood if you want to earn a decent interest rate along with other Gold perks, like Morningstar stock analyses and advanced charts. There is a caveat, however, and it has to do with the monthly subscription fee.

If you're not interested in Gold perks, Robinhood's APY loses its competitive edge to high-yield savings accounts with no fees. Why? When you take into account the monthly $5 fee, the average American's yield falls to 3.0%.

It's worth checking out the best high-yield savings accounts in the industry to compare rates with competitors, many of which offer better rates than 3.0%.

Robinhood offers perks for non-subscribers. Freelancers may be interested in the Robinhood Retirement account, which offers a 1% match on all IRA investments. The 1% match may help offset the lack of employer-match benefits offered to contract/freelance employees.

New investors may be interested in Robinhood as a stock brokerage. It's one of the best brokers for beginners out there. However, folks prone to overinvesting should consider keeping their brokerage money and savings in separate accounts, which means skipping out on Robinhood.

Ultimately, if you're willing to keep your savings in an insured brokerage account (and opt-in through Robinhood's brokerage cash sweep program), you can earn 4.40% APY on your cash. It may be worth transferring a portion of your savings to Robinhood.