Is Robinhood Gold Worth It?

Robinhood Gold is the broker's premium subscription plan that adds several features that many customers are likely to find valuable. But one big question that is often on the minds of Robinhood customers is whether it's worth paying for Robinhood Gold.

With that in mind, here's an overview of what Robinhood Gold includes, how valuable its perks are, and whether becoming a Robinhood Gold subscriber could be worth it for you.

What does Robinhood Gold include?

For your $5 monthly or $50 yearly fee, Robinhood Gold adds several features to your brokerage account. Here's a quick list of what it includes, followed by a bit more information about each:

• Higher interest on uninvested cash
• Higher instant deposit limits
• 1% match on taxable deposits
• 3% match on IRA contributions
• Morningstar research access
• Level II market data
• Lower margin rates
• Robinhood Gold Card access

Higher interest on uninvested cash

Robinhood Gold members earn a higher interest rate on the cash balances in their accounts. As of March 2024, the Robinhood Gold interest rate on cash sweep balances is 5%, as opposed to just 1.5% without a Gold membership.

The math: $60 would cover one year of $5 monthly Robinhood Gold subscription payments. To earn $60 in interest over a year with the 5% APY, you would need to maintain an average balance of $1,200.

Higher instant deposit limits

In standard Robinhood accounts that have instant deposits enabled, up to $1,000 is available instantly, regardless of the account's balance. With a Robinhood Gold membership, instant deposit limits range from $5,000 to $50,000, depending on your portfolio value. Here are the specific limits:

• $5,000 with a portfolio value under $10,000
• $10,000 with a portfolio value of $10,000-$25,000
• $25,000 with a portfolio value of $25,000-$50,000
• $50,000 with a portfolio value over $50,000

1% match on taxable deposits

Beginning soon, Robinhood will match deposits into taxable brokerage accounts by 1%. If Robinhood Gold customers contribute $10,000 to their account, they'll earn $100. There's no cap, but Robinhood does cap daily ACH deposit limits. Rewards are earned over 24 months, or two years.

The math: To cover the cost of a monthly Robinhood Gold subscription with 1% match, you'd need to deposit $6,000 into your brokerage account in 2024.

3% match on IRA contributions

For customers who open a traditional or Roth IRA through Robinhood, the broker matches 1% of eligible contributions for customers without Robinhood Gold. In other words, if you contribute $1,000 to a Robinhood IRA, you'll receive a $10 "bonus" from Robinhood.

On the other hand, Robinhood Gold members get a 3% match on their contributions. From now through April 30, 2024, this match also applies to IRA transfers and rollovers. This match could be worth a lot of money if you max out your IRA account each year.

The math: To cover the cost of a monthly Robinhood Gold subscription with 3% match, you'd need to deposit $2,000 into your IRA in 2024. By maxing out a $7,000 IRA, you'd earn $210 total.

Morningstar research access

Robinhood is known for being a low-frills brokerage platform, but Robinhood Gold adds some important features for investors. One of them is access to professional research reports on more than 1,700 stocks from Morningstar. With these reports, you can get professional opinions on a company's strategy, competitive advantages, risks, and more before you decide to invest.

Level II market data

Robinhood Gold members get Level II market data from Nasdaq. This won't be useful to all Robinhood users, but for active traders and those who use technical analysis in their investment strategies, being able to view the full list of current bid and ask prices for a stock can be very helpful.

Lower margin rates

While margin investing isn't right for everyone, having access to lower margin rates can be a valuable perk for many investors. Robinhood Gold members get an 8% margin interest rate, which is highly competitive in today's interest rate environment. Non-members get a much higher 12% rate, which is more in-line with what most peers charge.

It's worth noting that Robinhood's margin rate varies over time based on the upper limit of the Federal Reserve's target range on the benchmark federal funds rate. For Robinhood Gold members, 2.5% is added to the upper limit, and with a current federal funds target range of 5.25%-5.50%, that's where the 8% margin rate comes from.

Robinhood Gold Card access

Robinhood Gold members can be approved for the Robinhood Gold Card, Robinhood's credit card. As of March 2024, anyone can join the waitlist, but you need to subscribe to Robinhood Gold to actually apply for and swipe the members-only card.

Robinhood Gold Card's biggest perks are no annual fees (aside from the Robinhood Gold membership fee) and 3% back on all purchases with no yearly cap. It could be a good credit card option for some Robinhood users, especially those who already subscribe to Robinhood Gold for other perks.

The math: To cover the cost of a monthly Robinhood Gold subscription with 3% rewards, you'd need to spend $2,000 with your Robinhood Gold Card in 2024.

How valuable are these benefits?

It's tough to put a single number on the value of Robinhood Gold's benefits. It depends how much you use them. For example, if you typically keep about $5,000 cash in your brokerage account, the higher interest rate on uninvested cash would be worth about $175 on an annualized basis compared with the current interest rate for non-Gold members.

As another example, if you contribute the $6,500 maximum to an IRA in 2023, the extra 2% of matching contributions would be worth $130, covering the membership fee and then some.

Some of the benefits are tougher to quantify, such as Level II market data and Morningstar research access. And to be fair, some other brokers give these to clients for free. And the margin interest benefit is valuable if you typically trade on margin, although it generally isn't the best idea for most investors. The instant deposit limits can be worth it, but only if you regularly contribute over $1,000 to your account and want to be able to use it immediately.

Is Robinhood Gold worth it?

Robinhood Gold could be worth it for some Robinhood customers. If you max out your IRA contributions every year, being a Robinhood Gold member gets you far more value than the annual membership cost. The same can be said if you tend to keep at least several thousand dollars in cash in your account. Once Robinhood implements the 1% match on taxable accounts, customers who deposit more than $6,000 annually would almost certainly earn more than they would without Robinhood Gold.

On the other hand, if you don't have an IRA, don't invest or deposit much, and don't use margin, Robinhood Gold might not be worthwhile for you.

You should take a look at the perks of Robinhood Gold one by one and see how much value you would get out of each one. If the answers add up to more than the Robinhood Gold $5 monthly fee, it could be well worth the cost.