Robinhood’s IRA Match: Is It a Good Deal?

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Robinhood offers two tiers of IRA contribution matching:

• Standard Robinhood members get a 1% match on new contributions.
• Robinhood Gold members get a 3% match on new contributions. (Robinhood Gold costs $5 per month.)

The match is classified as interest income, so it doesn’t count towards your annual contribution limit. 

Without a Gold membership, you’ll immediately earn a 1% match on your contributions. However, to earn and keep the 3% match, you must keep your Robinhood Gold account open for one year after earning the match.

Additionally, since these funds are in an IRA, you need to keep the money in the account to avoid potential penalties and fees.

How Does The Robinhood IRA Match Work?

The Robinhood IRA match resembles an employer matching your 401(k). contributions. If you contribute $7,00 to your IRA (Roth or traditional), the maximum you can earn is $70, or $210 with a Robinhood Gold subscription. 

You continue to get this match on all contributions in the ensuing years. This can easily compensate for Robinhood’s $5 monthly fee for Gold membership. 

Is The Robinhood IRA Worth It?

Seeing that this is a long-term commitment, it’s important to determine whether Robinhood is the best place to park your retirement funds. 

A few things to know about the Robinhood IRA are:

• You can have both a Roth account and a traditional account.
• While Robinhood doesn’t offer mutual funds of its own, you’ll have access to a wide range of ETFs.
• You can’t trade crypto or options within your Robinhood IRA. 

While Robinhood does have a free option, it’s worth paying $5 per month for a Gold account if you plan on maxing out your annual contributions.

Since you earn a 3% match bonus on new contributions, the break-even point for coming out ahead with the Gold account is $3,000 annually. Contributing less than $3,000 annually, it’s better just to take the 1% match offered by the free account. 

While Robinhood is known for its free trading, it is smart to separate the idea of trading individual stocks for profit from investing for retirement.

Investing a large portion of your money in individual stocks risks your retirement savings. The Robinhood IRA is, therefore, best for those who want access to low-cost ETFs that can help them achieve their retirement goals. 

Visit Robinhood to learn more.

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R.J. Weiss

R.J. Weiss, founder of The Ways To Wealth, has been a CERTIFIED FINANCIAL PLANNER™ since 2010. Holding a B.A. in finance and having completed the CFP® certification curriculum at The American College, R.J. combines formal education with a deep commitment to providing unbiased financial insights. Recognized as a trusted authority in the financial realm, his expertise is highlighted in major publications like Business Insider, New York Times, and Forbes.