Robinhood hikes IRA match to 3% for Gold members: Is it worth the upgrade
Robinhood Gold costs $5 per month. Will it negate the match, or is it worth it?
Robinhood tripled its IRA match to 3% for Robinhood Gold members, according to an in-app pop-up I received this morning. This puts Robinhood’s match almost on par with many employer contributions for 401(k) accounts.
Robinhood is the only broker we review that offers this type of incentive — matching IRA contributions — to retirement savers. But there is a catch: you need to subscribe to Robinhood Gold to get the additional 2% in matching funds. Robinhood’s standard IRA match remains at 1% — still a notable benefit.
At $5 per month, the fee for Robinhood Gold will undoubtedly diminish the overall value of this increased match. But by how much? Does it make sense to upgrade to Robinhood Gold to get the 3% IRA match?
Let’s find out.
Is it worth the upgrade to Robinhood Gold?
Robinhood Gold elevates the Robinhood trading experience to a new level, with in-depth research and analysis tools, better margin rates and a more valuable cash sweep interest rate you won’t get with a standard Robinhood account.
Access to third-party research providers and level two market data are features that most big brokers include for free, but few brokers offer as competitive of a margin rate or as high an interest rate on uninvested cash as Robinhood. If you’re a margin trader and like to keep cash on the sidelines as you explore potential trade opportunities, Robinhood Gold may make sense.
And now Robinhood Gold members earn 3% on all IRA matching contributions. With a 2023 IRA contribution limit of $6,500 ($7,500 if you’re age 50 or older), that’s $195 you can earn from Robinhood in 2023 just for maxing out your IRA. At a 1% match, standard Robinhood members can earn up to $65 in matching contributions in 2023.
Using some basic math, at $5 per month, Robinhood Gold costs $60 per year. You can also try Gold for free for the first 30 days, so you’d actually pay $55 for the first year of being a Gold member. Subtract the $55 fee you’d pay for Gold in 2023 from the $195 you can earn in IRA matching funds from Robinhood and you come out ahead with $140. Add the additional features you get with Robinhood Gold and the upgrade seems like a no-brainer.
Other Robinhood Gold features
If you decide to upgrade to Robinhood Gold you will also unlock the following features:
- A 3% match on all IRA contributions, including IRA transfers and 401(k) rollovers
- 0.01% interest on your uninvested brokerage cash with cash sweep (4.5% without Gold)
- Instant deposits of up to $50,000
- Professional research from Morningstar
- Level two market data from Nasdaq
- Access to margin investing at 8% (12% without Gold)
Bottom line
Will you upgrade to Robinhood Gold now that it’s boosted its IRA match to 3%? We review Robinhood in detail if you need a little more information to see if it’s the right broker for you or you can head on over to Robinhood and sign up for Robinhood Gold today.
