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Robinhood revolutionized investing for retail investors (every-day people) by allowing free stock trades. Just as Charles Schwab had done decades earlier in becoming the first discount broker.
After enduring some up-and-down years and weathering some controversies, Robinhood has returned to its innovative ways — at least when it comes to marketing. Robinhood Gold has become a focal point for the recent features the company has rolled out as it matures and tries to expand its offerings.
Not since the Fidelity Zero funds have we seen an investment company go so hard offering benefits to attract new clients, or to convert free users to paid users.
How does Clark feel about Robinhood Gold? And is it worth the price tag?
Should I pay $5 a monthly fee, a $50 annual fee or ignore Robinhood Gold altogether?
That’s what a Clark Howard listener recently asked.
Asked Stephany in Indiana: “What do you think of the Robinhood Gold membership? Is $5 a month worth it?”
I’ll get into more detail about what features you get along with Robinhood Gold in the next section. First, let’s get Clark’s opinion. He recently mentioned in a podcast that he doesn’t trust Robinhood as far as he can throw them. But he gave as close to a neutral answer on Robinhood as I’ve heard from him.
“The [price] is not a lot. If you’re happy using Robinhood and you use the services that come with Gold, go ahead,” Clark says. “Robinhood is a company you don’t hear me say nice things about. But there are many people who use Robinhood who are very happy with it. And if you’re pleased with the services you’ve gotten, Stephany, then I’d say go for it.”
Again, Robinhood itself is free. If you want to upgrade to Robinhood Gold, you can either pay $5 a month ($60 a year) or you can pay $50 annually and save $10.
Keep in mind you can also try Gold for free for 30 days (but you may need to cancel before the end of that period to avoid a charge).
Here are the features that Robinhood Gold gives you access to:
Just like any financial subscription with benefits, the details matter.
For example, if you’re just moving your IRA to Robinhood temporarily to pick up a few hundred dollars in match funds, you may not realize you’ll lose the funds if you don’t meet the five-year rule I mentioned above.
And if you’re using the 3% cash back credit card, you need to account for the annual cost of Robinhood Gold vs. what you can get in rewards for a free 2% cash back card.
Also, there’s a question of sustainability. In combination, the IRA match, 3% cash back credit card and 5% interest are a sweet deal. But it’s fair to be skeptical that all these great incentives won’t last forever. Or that Robinhood will increase the price of its Gold memberships over time.
The potential impermanence is one of the biggest downsides that Clark recognizes.
“Robinhood has had a lot of operational difficulties. They’ve done a lot of U-turns. And recently when they came out with the new 3% cash-back card that you have to be a Gold member to have, I didn’t exactly do cartwheels about this incredible 3% cash back,” Clark says. “Because I’m not excited by Robinhood.”
Robinhood Gold offers a trifecta of competitive rates on savings, IRA contributions and credit card rewards. That’s totally excluding the investment features.
Just do the math and make sure you’ll more than earn your subscription fee by making use of those features. And know that the current rates and prices may be temporary. Robinhood could make Gold memberships less attractive over time after securing market share.
This post was last modified on May 1, 2024 12:20 pm
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