Use this calculator to estimate your potential annual earnings from uninvested cash on Robinhood, comparing the standard non-Gold APY with the higher Robinhood Gold APY, factoring in the monthly Gold subscription fee.
Understanding Robinhood APY and Gold Benefits
Robinhood offers an Annual Percentage Yield (APY) on uninvested cash held in your brokerage account. This allows your idle money to earn returns, similar to a high-yield savings account. The APY can vary, and Robinhood often provides a significantly higher rate for its premium subscription service, Robinhood Gold.
What is APY?
APY stands for Annual Percentage Yield. It represents the real rate of return earned on an investment over a year, taking into account the effect of compounding interest. For your uninvested cash, a higher APY means more money earned over time.
Robinhood Gold vs. Non-Gold APY
Non-Gold APY: This is the standard rate offered to all Robinhood users on their uninvested cash. While it's a benefit, it's typically lower than the rates offered to Gold members.
Robinhood Gold APY: Robinhood Gold is a premium subscription service that offers various benefits, including a substantially higher APY on uninvested cash. This higher rate can be a significant draw for users with larger cash balances.
The Impact of the Robinhood Gold Monthly Fee
While Robinhood Gold offers a higher APY, it comes with a monthly subscription fee. When evaluating whether Gold is worthwhile for the increased APY, it's crucial to factor this fee into your calculations. The calculator above helps you determine the "net" annual earnings and the "effective" APY after accounting for this cost.
For example, if you have a small cash balance, the monthly fee might outweigh the additional earnings from the higher APY, making the non-Gold option more profitable. Conversely, with a larger cash balance, the higher APY from Gold can easily cover the fee and provide substantial net gains.
How to Use the Calculator
Initial Cash Balance: Enter the total amount of uninvested cash you typically hold in your Robinhood account.
Non-Gold APY (%): Input the current APY rate offered to standard Robinhood users. You can usually find this on Robinhood's official website or app.
Gold APY (%): Enter the current APY rate offered to Robinhood Gold subscribers. This will also be available on Robinhood's platform.
Robinhood Gold Monthly Fee ($): Input the current monthly cost for a Robinhood Gold subscription.
Click "Calculate APY" to see a breakdown of your potential annual earnings for both scenarios and the effective APY with Gold after the fee.
This tool empowers you to make an informed decision about whether a Robinhood Gold subscription is financially beneficial for your specific cash balance.