Robinhood has launched Cash Management, a new feature for its investing app that lets users park uninvested cash in a brokerage account where it can earn interest or be spent like cash using a special Robinhood-branded debit card. Robinhood first announced the feature in October.
This week’s launch follows Robinhood’s attempt last year to launch no-fee checking and savings accounts and a 3 percent interest rate. The company had to take the feature back to the drawing board after the CEO of the Securities Investor Protection Corporation said he would not insure the accounts Robinhood planned to offer.
In case you were wondering, this time, the accounts will be insured by the federal government. Robinhood says it moves money you put into your Cash Management account to its partner banks, which will pay the interest and provide FDIC insurance (up to a total of $1.25 million). The current Cash Management interest rate is 1.8 percent, and there are no account minimums, transfer fees, or foreign transaction fees. With a Cash Management account, you’ll also get a Robinhood-branded Mastercard debit card, which Robinhood says you can use to withdraw cash from more than 75,000 ATMs.
There’s currently a waitlist for Cash Management, but if you sign up for it, you can pick from one of the four designs for your Robinhood debit card. Users have been able to sign up for the waitlist since October, and Robinhood says Cash Management is now rolling out to the “first set of customers” on the waitlist.
Robinhood is also launching commission-free fractional share trading, which lets you invest in fractions of a stock. The company says you can start with just a buck, which is a much cheaper way to buy into an expensive stock like Apple, even if you’re only buying a fraction of a share. If you want to try fractional share trading on Robinhood, you can get on the waitlist for early access, which Robinhood says will launch next week.
Robinhood isn’t the first to offer fractional share trading, though. Square announced the feature in October for its Cash app, and it’s something you can already do in other investment apps such as Stockpile or Betterment.
The company also announced that starting “early next year,” it will let users automatically reinvest cash dividends and schedule recurring investments.
Correction: We originally stated that Cash Management launched today, but it actually launched yesterday. We have updated the article to reflect this. We’ve also added context about the feature first being announced in October and that users could join the waitlist at that time.