Robinhood enhances margin trading rates

Rick Steves

“We’re always looking to upend the status quo on behalf of our customers. Whether someone has a balance of a few thousand dollars or millions, they automatically have access to the lowest margin rates among leading brokerages with absolutely no haggling required.”

Robinhood has significantly lowered its margin rates, which now vary based on a customer’s margin balance, with rates ranging from 5.7% to 6.75%.

The leading neo broker said it’s time to change the way they approach margin lending as customers have different needs, varying levels of investment experience, and different financial goals, which means the one-size-fits-all approach to margin investing “simply no longer makes sense”.

“No haggling required”

Steve Quirk, Chief Brokerage Officer at Robinhood, commented: “We’re always looking to upend the status quo on behalf of our customers. Whether someone has a balance of a few thousand dollars or millions, they automatically have access to the lowest margin rates among leading brokerages with absolutely no haggling required.”

Customers will now receive a single low rate based on their total margin balance. Here are the rates customers will receive at Robinhood:

  • 6.75% for up to $50K
  • 6.55% starting at $50K and up to $100K
  • 6.25% starting at $100K and up to $1M
  • 6% starting at $1M and up to $10M
  • 5.95% starting at $10M and up to $50M
  • 5.7% starting at and above $50M

Robinhood stated that there are no closed-door negotiations required. Once a customer is approved to trade with margin, their rate is automatically based on the margin balance of their account.

Borrow money from Robinhood for leverage

Margin investing allows customers to borrow money from Robinhood and leverage their holdings to purchase securities. This gives them access to additional buying power based on the value of certain securities in their investing account. Margin can be a useful investing tool that provides flexibility if a customer sees an opportunity in the market and wants to invest more right away without needing to make a deposit from their bank.

Access isn’t automatic—customers must apply and will only have access if they meet eligibility requirements. Margin investing is risky and it’s not appropriate for everyone.

Robinhood previously launched a number of tools for more seasoned investors including 24 Hour Market, Advanced Charts, Options Trading in Cash Accounts, Stock Lending, Shareholder Q&A, Options Rolling, and more.

Robinhood Gold subscribers also get their first $1,000 of margin with no interest. Soon, they will also receive a 1% unlimited deposit boost on all eligible incoming brokerage deposits, with no cap.

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