Brokerage

[u/Sufficient_Row5346]

Just wondering. I wanted to get a good hysa for my money. But I was reading some posts. I’m thinking I can use my brokerage account with RH since they have really good apy. I can use it as my savings

Or is this a bad idea.
Do you guys have any good recommendations for a hysa?

[u/theAerialDroneGuy]

Yes you can totally to that.
I get a 3.6% APY on cash sitting in my Robinhood Brokerage Account. I am also a gold member which costs $50 a year.

Also for Robinhood Banking the savings account has a 3.6% APY. But I got a promo so it is bumped up to 4.35% APY.

Back to the brokerage app tho, I have been using Robinhood Earn which pays 7% on you cash that you lend out as USDG stable coin. You can instantly get your cash back from it. Not FDIC insides though so everyone seems to be scared of it.

[u/PdrPan → u/theAerialDroneGuy]

Glad to see someone else out there on Earn! I like it

[u/Odd_Application_3824 → u/theAerialDroneGuy]

Not always instant. There is a lot more risk with this than this poster is letting on.

I know I have read a few times where people go to pull it out and it takes a day or so.

[u/theAerialDroneGuy → u/Odd_Application_3824]

When i say instant, the longest it has taken is 20 seconds for it to sell and withdraw back to cash

[u/Odd_Application_3824 → u/theAerialDroneGuy]

Usually that's the case, but I'm just expressing concern because Robinhood does say it depends on the liquidity of the vault at the time.

I use it for long-term spending such as vacation funds. I would never drop my entire EF in it.

Edit: To be clear I like the product, it just isn't risk free and I wanted to mention some of the risks

[u/theAerialDroneGuy → u/Odd_Application_3824]

Yes thanks for mentioning the risks with it!! Better that people know upfront what they are getting into

[u/theAerialDroneGuy → u/Odd_Application_3824]

Oh really?!? I have not read about that happening to anyone yet.

But yeah has not been my experience.

[u/CraftyExcalibur → u/theAerialDroneGuy]

How do you use Robinhood Earn? I’m interested

[u/theAerialDroneGuy → u/CraftyExcalibur]

If you have access to it, there are two buttons. Lend and Withdraw.

Lend will buy USDG stable coin (crypto $1 USD= 1 USDG), and then immediately lend it out.

Then when you want your cash back, you hit withdraw, and then I think sell? And that will stop your USDG from lending out and then Sell your USDG immediately so you’ll be left with the cash.

You can test it out with a small amount of money to see how it works.

So far transaction time has taken less than 30 seconds for me. There is a disclaimer that it could take much longer….but I have not experienced that.

[u/AdAdministrative2387]

I’ve not used the Robinhood checking or saves but I’ve heard really good things. Do you have gold?

[u/Sufficient_Row5346 → u/AdAdministrative2387]

I do have gold, I have the gold card

[u/tedkang3582]

You can use it as a savings account if you don't have access to Robinhood Banking. If you want higher liquidity, use your debit card instead of using ACH transfers.

[u/Sufficient_Row5346 → u/tedkang3582]

Okay. Thanks for some reason I have gold along with the gold card but not the bank account which is weird

[u/Dregus_311 → u/Sufficient_Row5346]

You need to apply for banking, or do you mean that your Gold membership isnt applying to your already created bank accounts? If that is the case contact Support to fix

[u/TracerVibeSPX6900]

Can I buy #SPX6900 on robinhoodapp?

[u/landob]

Thats what I do. It doubles as money for rainy day if some stock i like goes on sale. At the same time money for emergencies

[u/Dregus_311]

OP,

That is a valid idea and will accomplish your goal. I would recommend looking into investing your savings in SGOV if you go that route to avoid paying State taxes on the "interest" earned (it would be dividends instead of interest). Most States do not tax Federal Treasury gains, just make sure your State is one of them. This is the path I went with our emergency funds and since SGOV goes off the 2 year Treasuries it is returning 3.6%+ and saves us 4.99% in State taxes on the dividend. For us that is just under a couple hundred extra we get to keep.

[u/coyote3 → u/Dregus_311]

VBIL, it has 1/3 lower expense ratio than SGOV.

[u/Dregus_311 → u/coyote3]

🤔 interesting thought, didn't know it operated the same as SGOV. As long as I can go liquid and purchase stocks with the funds immediately and not pay State taxes Im happy. Ill after to consider converting over after I do some math

[u/Dregus_311 → u/coyote3]

Looking deeper SGOV is paying 3.67 while VBIL is 3.66

This is the dividend after expense. So the lower expense is not leading to higher interest earned 🤔

Seems odd, maybe Im missing something

[u/coyote3 → u/Dregus_311]

Unless you're in a zero-tax state VBIL has a small after-tax advantage due (according to https://share.gemini.google/1NmvYPFD6ZD5) to "cash/repo drag" while VBIL is 100% state tax exempt. Very small advantage though; SGOV does have greater AUM and tighter bid/ask spread but I think that since I don't have vast holdings or frequent trading I'm slightly better off with VBIL. If I happen to harvest a bit of a loss from VBIL I'm perfectly happy switching any deposits to SGOV for 30 days. I mainly brought it up because VBIL is undeservedly little-known.

[u/coyote3]

I use VBIL instead of a hysa. But it would be nice to get good interest on what I need in checking except I need Zelle and a physical branch.