What Robinhood Actually Charges You
Robinhood's core trading has no commission, but you pay in other ways
Robinhood does not charge a commission when you buy or sell stocks, options, ETFs, or cryptocurrencies. That flat-zero model is what made the platform famous. But Robinhood makes money from you in several other directions, and understanding them matters before you fund an account.
The company collects payment for order flow — it sells information about your trades to market makers who execute them. It earns interest on your uninvested cash. It charges monthly fees for premium features. And it takes a cut on certain transactions like wire transfers and currency conversion. None of these are hidden, but they are easy to miss if you only look at the commission line.
Key Takeaways
- Stock and options trades carry zero commission, but Robinhood profits from selling your order information to market makers.
- Robinhood Gold, the premium subscription, costs $5 per month and gives you margin borrowing and extended-hours trading.
- Outgoing wire transfers cost $5 each, and currency conversion on crypto or international trades carries a 1.5% to 2% spread.
- Cash sitting in your Robinhood account earns interest, but the rate is typically lower than what you would get from a high-yield savings account.
- Margin interest applies only if you borrow money to trade, and the rate depends on how much you borrow and your account balance.
The $5 monthly fee for Robinhood Gold
Robinhood Gold is the optional paid tier. It costs $5 per month and unlocks two main features: margin borrowing and extended-hours trading (4:00 a.m. to 8:00 p.m. Eastern time, instead of the standard 9:30 a.m. to 4:00 p.m.).
Margin borrowing means you can borrow money from Robinhood to buy securities. The amount you can borrow depends on your account balance — typically up to 2 times your buying power for stocks. You pay interest on the borrowed amount, and that interest rate varies. Robinhood's margin rates have ranged from around 5% to 11.5% annually in recent years, depending on how much you borrow and market conditions. The rate is not fixed and changes over time.
If you do not use margin or extended-hours trading, you do not need Gold and should not pay for it. The standard Robinhood account gives you access to all the same securities during regular market hours.
Wire transfer fees and currency conversion costs
Moving money out of Robinhood costs $5 per outgoing wire transfer. Incoming transfers are free. If you want to move money back to your bank account, that $5 charge applies each time.
Currency conversion happens when you trade cryptocurrencies or, in some cases, when you hold foreign securities. Robinhood applies a spread of roughly 1.5% to 2% on the conversion rate — meaning you get a worse price than the mid-market rate. This is not a flat fee; it is built into the price you see when you trade. On a $1,000 crypto purchase, that could mean paying $15 to $20 more than the true market rate.
How Robinhood profits from your trades
Payment for order flow is how Robinhood makes most of its money. When you place a trade, Robinhood does not execute it itself. Instead, it routes your order to a market maker — a firm that buys and sells securities constantly. That market maker pays Robinhood for the right to fill your order, and Robinhood keeps that payment.
You do not see this fee on your statement because you do not pay it directly. But it affects you indirectly: the price you get on your trade may be slightly worse than if you used a broker that does not sell order flow. The difference is usually small — a few cents per share on a stock trade — but it adds up over time and many trades.
This model is legal and common across the industry, not unique to Robinhood. But it is worth knowing that Robinhood's zero-commission model is subsidized by market makers, not by you paying nothing at all.
Interest earned on uninvested cash
Cash sitting in your Robinhood account earns interest. The rate changes and is set by Robinhood, not by you. In recent years, Robinhood's cash interest rates have ranged from 0.3% to around 5%, depending on market conditions and when you opened your account. Robinhood Gold members sometimes receive a higher rate than standard account holders.
This interest is a small benefit, not a cost. But it is worth noting that Robinhood's rates are typically lower than what you would earn in a high-yield savings account at a bank or online financial institution, where rates have reached 4% to 5% in recent years. If you are holding cash for a long time, a savings account may serve you better.
Margin interest if you borrow to trade
Margin interest only applies if you use Robinhood Gold and actually borrow money. The rate is not fixed — it depends on your account balance and how much you borrow. Robinhood publishes its margin rates on its website, and they change periodically.
As an example, if you borrow $5,000 at a 7% annual rate, you would pay roughly $350 per year in interest, or about $29 per month. But that rate is not may provide and could be higher or lower depending on market conditions and Robinhood's pricing at the time you borrow.
Margin borrowing is risky because if your investments fall in value, Robinhood can force you to sell positions to cover the loan. Most new investors should avoid margin entirely.
Comparing Robinhood's costs to other brokers
Most major brokers — Fidelity, Charles Schwab, E-Trade, TD Ameritrade — also charge zero commission on stock and options trades. So the commission structure is no longer a differentiator.
Where brokers differ is in cash interest rates, margin rates, and whether they sell order flow. Fidelity and Schwab, for example, do not sell order flow, which means they may execute your trades at slightly better prices. But they also do not offer a free tier with extended-hours trading or margin borrowing.
If you plan to hold cash in your account for months or years, compare the interest rates across brokers. If you plan to use margin, compare the rates and borrowing limits. If you want extended-hours trading, check whether other brokers offer it and at what cost.
Frequently Asked Questions
Does Robinhood charge a fee just to have an account?
No. A standard Robinhood account is free to open and maintain. You only pay the $5 monthly fee if you upgrade to Robinhood Gold. There are no account maintenance fees, inactivity fees, or minimum balance requirements.
What happens if I keep money in my Robinhood account and do not trade?
Your cash earns interest at Robinhood's current rate, which varies. You will not be charged any fees for holding the money. If you have Robinhood Gold, you pay $5 per month regardless of whether you trade.
Can I avoid payment for order flow?
No. All brokers that do not charge commission use payment for order flow or a similar model to make money. If you want to avoid it entirely, you would need to use a broker that charges commission per trade, which is rare and usually more expensive overall.
Is the margin interest rate the same for everyone?
No. Margin rates vary based on your account balance and the amount you borrow. Robinhood publishes its rate schedule, but your actual rate depends on where you fall in that schedule. Rates also change over time as market conditions shift.
Do I pay taxes on the interest Robinhood pays me?
Yes. Interest income is taxable as ordinary income. Robinhood will send you a 1099-INT form at the end of the year if you earned more than $10 in interest, and you report it on your tax return.