This post was originally published on this site
On Friday, retail investing and trading platform Robinhood (NASDAQ:HOOD) announced Robinhood Gold, a service that enables its customers to earn 3% interest on their uninvested brokerage cash.
The news follows another hike in interest rates by the Federal Reserve this week and provides an increase on the 1.5% interest Robinhood’s non-Gold members are able to earn.
According to its website, Robinhood doesn’t pay the interest. Instead, they move investors’ cash into their network of FDIC-insured program banks that hold and invest the cash and pay interest on deposits and the swept cash.
“Since launching the revamped brokerage cash sweep program in May we’ve seen strong adoption from our Gold users, who currently have about $750 million enrolled in cash sweeps. Effective immediately, all of these cash sweep balances are now earning 3% interest with the interest compounding daily,” Robinhood said in a statement.
Robinhood added that the interest is paid out monthly by the program banks, with customers able to keep track of their earnings within the Robinhood app.
Shares of the brokerage are down around 46% in 2022 as market uncertainty has decreased retail trading volumes.
