Recently I ran into some very unexpected behavior from Robinhood. I got Robinhood banking set up and direct deposit scheduled to get a 4.25% interest rate on my savings account.

After my direct deposit I attempted to send money into my IRA and it wouldn’t let me, so I attempted to move the money to my brokerage and then to my IRA. Robinhood does not let you do this. You can’t fund an IRA from your brokerage and you can’t fund a Robinhood IRA with your paycheck from Robinhood Banking checking accounts. The first thought would be to just move the money back to my primary bank…well that doesn’t work if you’re using Margin.

The chat support at Robinhood couldn’t explain this, but the Robinhood Help X account was able to explain this. When you have Robinhood Gold and use the $1000 of interest free margin, they don’t track what shares you buy with the margin, they only count it against your account. Which means your cash would need to reach $1001 to be able to withdraw $1. So I couldn’t even move my money back to my primary bank account. With this in mind I think it’s going to be rather wasteful to engage the margin on her gold account. Maybe there would still be value in using it on $1000 of SGOV, but we’ll see.

Now all of this information I was readily available but I had not dug deep enough to get it, aside from not funding my Robinhood IRA via my Robinhood banking from my direct deposits. I don’t think that is public anywhere.

~~Miniwing~~
Learner, Stoic, Investor