What is The Instant Deposit on Robinhood and How Does it Work?

In today’s article, we will let you know what is the instant deposit on Robinhood and will show you in detail how does it work.

Instant deposit is a feature that allows users to deposit funds from their banks to their online wallets. The limit depends on the amount a user has in their account.

Robinhood is a stock trading and investment company that offers most of its services commission-free. Its users are privileged to make unlimited trade in stock, Exchange Traded Fund (ETF), and options with Robinhood financial commission-free. Additionally, they offer cryptocurrency trading with the Robinhood crypto. Its headquarters are located in Menlo Park, California, and it is registered with the U.S Securities and Exchange Commission.

What is the instant deposit on Robinhood, and how does it work?

Instant deposit is a feature that allows users to deposit funds from their banks to their online wallets. Robinhood has the instant deposit feature.

The limit depends on the amount a user has in their account. Users whose portfolio value is over $50000 have access to a $50000 instant deposit. Those whose portfolio value is more than $25000 have access to an instant deposit of $25000. Additionally, for those whose portfolio value is above $10000, their instant deposit limit is $10000. 

The account holders of Robinhood gold have an advantage since their instant deposit limit is $5000. However, for users without the Robinhood gold account, their instant deposit limit is $1000 regardless of their account’s value

In case a user deposits more than their limit, he/she has to wait for five days for the additional amount to be deposited in their account.

How the instant deposit work

Since the instant deposit feature allows money transfers from the bank account to current wallets, one must own an account with Robinhood. 

To transfer your money, you have to log in to your Robin hood account and check your instant deposit health. If it is good, then you can go ahead and click on the transfers section. It would be best if you then choose to transfer to Robinhood. You will then write the amount you wish to move and click submit.

If your account is not Robinhood gold, then you will have to wait for a maximum of 5 days before the funds are transferred to your account.

As you wait for the transfer to be complete, Robinhood gives you a chance to invest your money and stand a chance of making profits. During the transfer time, you cannot transfer the funds back to your bank account.

How to Increase your instant deposit on Robinhood.

One option of increasing your instant deposit is by upgrading your account to Robinhood Gold. Users with the Robinhood gold account have a limit of $5000 regardless of their portfolio value, while other users have a limit of $1000. 

To upgrade your account to Robinhood gold, the portfolio value in your account must be a minimum of $2000. You can upgrade either via the Robinhood’s app or their website. To upgrade to their app, you have to log in to your account, tap on the account icon, tap on the three bars on the top right corner of your screen. Finally, tap settings and select Robinhood gold.

To upgrade your account via their website, you have to log in to your account, tap the account menu and select Robinhood gold. However, the gold account is not free; account holders are expected to pay a $5 monthly subscription fee. This amount is automatically deducted from your Robinhood account. 

For those willing to give it a try, Robinhood offers a free thirty days trial. A user has an option to downgrade from Robinhood gold. However, if your current deposits have exceeded $1000 or you have pending orders, Robinhood owns the right to decline your downgrade request unless you stop using more significant instant deposits and wait for your pending deposits to complete. 

To downgrade from Robinhood gold, you have to follow your account icon’s procedure and select change tier. In the future, if you wish to upgrade again, your account will be charged $5 upon reactivation and incur monthly charges of $5.

Another option for a user to increase their limit is if he/she deposits more to meet the next limit rank. A good example, as earlier explained, one can only have an instant deposit for the amount less than or equal to your portfolio value. Therefore, if your portfolio value is $3000 and you want to transfer $5000, you will receive an instant deposit of $3000. The additional amount could take up to five days.

Unfortunately, users can lose their ability to access instant deposits if their bank transfer is not cleared. In such a case, once the transfer is removed, the user can successfully access instant deposit. Additionally, one can lose the instant deposit service transactions if their account has raised a security flag.

Does Robinhood charge interest on instant deposit?

Instant deposits on Robinhood are free. The service does not incur interest charges, and there is no set minimum. To upgrade and start using the Robinhood instant, they have to share a unique referral code in the app. When more friends click on the shared link, you finally access the instant deposit.

However, a user has to pay margin charges. If their instant deposit margin is higher than $1000, they are charged a 2.5% yearly interest to settle the margin of the amount above $1000.

Although the 2.5% is a yearly interest, it is calculated daily. The daily interest is therefore 2.5% divided by 360. The margin interest is automatically deducted from a user’s gold account monthly. For example, if a user has a margin of $4000, only $3000 will incur margin charges. 

Under the gold billing section of the account overview, users can check their current billing cycle status. Also, users can find information about their gold fees, interest rates, and their next billing cycle on the account history.

The gold billing section has five major areas that every user is expected to understand. They have the next billing date, which is the exact date for a user’s next payment. Then there is the monthly gold fee, which is 5 dollars automatically deducted monthly. There is the margin used where daily interest is calculated on amounts that are above $1000. 

Additionally, they have a yearly interest rate, which is paid for the margin above $1000. Finally, Robinhood has the accumulated interest, which is the Robinhood interested earned and delivered in the next billing cycle.

Robinhood has cautioned their users to note that all investments are risky and could lead to the principal amount’s loss.