Pros

Account minimum: $500 for robo-advisor and $1 for stocks.

Fees: 0.25% for most accounts; no trading commissions or fees for withdrawals, minimums, or transfers.

Overview

Wealthfront is another top-rated robo-advisor. Its technology may automatically create a portfolio consisting of US stocks, overseas stocks, bonds, and real estate. You begin by answering a few questions about your financial objectives, after which the robo-advisor works to create an appropriate portfolio for you. Wealthfront also allows you to trade stocks without paying any commissions.

Wealthfront’s Cash Account offers a highly competitive APY of 5.00% as of December 2023 (5.50% if you recommend a friend).

The high-interest rate applies to all of your uninvested funds. There are no minimum or maximum balances. Simply deposit cash and earn interest until you are ready to invest. Your cash receives up to $8 million in FDIC insurance (and $16 million for joint accounts), courtesy of banks. WealthFront collaborates with

There are no account fees or restrictions with the Cash Account. You can move money in and out as frequently as you choose. You also get a debit card to make purchases.

Pros

• Excellent interest rate on uninvested cash.
• There are no fees or account requirements for earning interest.
• A wide selection of robo-advisor investment alternatives.
• Provides free financial planning tools.
• Automatic, daily tax loss harvesting.

Cons

• There are no human advisors available.
• Limited investments outside of equities and the robo-advisor
• Limited chat and customer support
• No cost reduction or additional support for larger accounts.

4. Empower

Account minimums: $100,000 for wealth management and $0 for individual investing accounts.

Fees range from 0.89% to 0.49% for accounts over $1 million.

Overview

Empower blends the technology and convenience of robo-advisors with the expertise of traditional financial advisors. The platform provides continual portfolio allocation advice, rebalancing, tax optimization, and limitless access to a human advisor. To use this service, you must have a minimum account balance of $100,000.

If you invest on your own, Empower’s investing accounts have no beginning balance requirement.

Empower’s Personal Cash account does not have a minimum balance requirement. As of December 2023, the account has a high annual percentage yield (APY) of 4.70%, with no balance limitations or fees.

To earn interest, you must transfer your cash from any Empower investment account to the cash account; this does not happen automatically.

Empower provides aggregate FDIC insurance of up to $5 million on your deposit. While you can transfer money from the cash account as often as you like, Empower has a daily withdrawal restriction of $100,000. To help manage your money, you can utilize Empower’s free financial planning tools, such as its budget planner and net-worth calculator.

Pros

• High interest rate on cash accounts.
• There is no account minimum required to earn interest.
• Combines a robo-advisor and human planners.
• Excellent selection of investment methods and portfolios.
• Free online money management tools

Cons

• Robo-advisors require a $100,000 account minimum.
• Transfer money to a cash account for interest.
• Higher costs compared to other robo-advisors.
• To open an account, you must first phone.
• The mobile app lacks several desktop functions.

5. Fidelity

Account Minimum: $0.
Fees: $0 for stock/ETF trading, $0.65 per contract for options trades.

Overview

Fidelity is one of the world’s leading investment brokers due to its focus on low-cost investing. It has no minimum account balance, no fees or commissions on stock and ETF trading, and minimal administrative fees.

Its platform is simple to use for beginners, but it also includes a variety of screeners, portfolio analysis tools, and other features for more advanced investors. As a result, it received the highest overall rating in our Best Online Brokers and Trading Platforms assessment.

Fidelity’s uninvested cash program is also easy and attractive, paying 4.99% through a sweep into money market funds.

Fidelity’s cash management service functions much like a bank account, with bill pay, an ATM card, and a mobile check deposit. As of December 2023, the cash management program earns an annual percentage yield of 2.72%.

If you have both types of Fidelity accounts, you can transfer funds back and forth.

Pros

• Automatically pays a high-interest rate for cash
• All sized accounts earn interest.
• Low fees and trading commissions
• User-friendly and powerful investment platform.
• High-quality research and educational materials.

Cons

• Charges fees for international stock and currency trades.
• There is no commodity or futures trading.
• High fees for broker-assisted deals.
• Option fees are higher than normal.

6. Robinhood

Account minimum: $0

Fees: No commissions for stock, ETF, options, or cryptocurrency trading (minimal markup included).

Overview

When it originally debuted, Robinhood became a major sensation in the investment industry. Robinhood’s app made investing exceedingly simple—some may say too easy. The Robinhood trading software allows you to trade stocks, ETFs, options, and cryptocurrencies without paying any commissions. Its investing research facilities are quite limited when compared to big desktop platforms, but they are enough for casual investors.

Robinhood offers a lucrative scheme for uninvested cash, but there is a catch. You must have a Robinhood Gold account to be eligible for the highly promoted rate. Robinhood Gold costs $5 per month and includes premium features such as Morningstar analysis, a greater maximum for fast deposits, and cheaper margin investing fees.

If you pay for Robinhood Gold, you will earn 5.0% on your uninvested cash. However, if you merely have a free Robinhood account, you will earn 1.5%. The value of the $5 monthly fee is determined by the size of your cash balance and the other Gold perks you choose. To use Robinhood’s service, you must first opt into the cash sweep feature on the app. This allows you to earn interest and boosts the FDIC coverage of your cash amount to $2.25 million. There are no minimum or maximum balance requirements for earning interest.

Pros

• High-interest rates for Robinhood Gold subscribers.
• Zero-commission trades
• The app is incredibly straightforward to use.
• Fractional share trading is offered.
• There are no minimum balance requirements.

Cons

• Robinhood Gold requires a monthly payment of $5 for the maximum APY.
• Free accounts have a moderate interest rate.
• Only basic research instruments.
• Limited asset choices.

The final verdict

All of the brokers on this list provide fantastic programs for uninvested funds, assuming you qualify for the best rates. The best fit is determined by both your investment goals and your predicted account balance. Interactive Brokers makes sense for serious investors seeking the most investment skills, while Fidelity has the highest interest rate and an incredible platform of its own.

If you are looking for a robo-advisor, Betterment and Wealthfront are both good options. They are very similar, and the best match depends on whatever platform you choose. Empower’s cash account is likewise quite impressive. There is no minimum account balance required to use it, and you will have access to free financial planning tools. To invest using Empower’s robo-advisor, you must have at least $100,000. Finally, Robinhood’s program is quite competitive provided you are prepared to spend $5 per month for Robinhood Gold. Otherwise, its rate is comparable to the rest.

How Else Can You Earn Interest on Cash?

Aside from brokerage accounts, the simplest way to earn interest on cash is to deposit it in a high-yield savings or money market account. There are Internet banks that pay much higher interest rates than traditional brick-and-mortar banks. Savings and money market accounts provide you with fast access to your money.

If you’re ready to temporarily lock up your money, consider putting it in a bank certificate of deposit (CD). These can offer a higher interest rate, but you must keep the money for a specified amount of months or years. If you remove it early, you will have to pay a penalty. Bonds are another possibility. They pay interest, but there is a danger of nonpayment, such as if the bond issuer declares bankruptcy. In general, the interest rate rises as the bond risk increases. Rating organizations assign letter grades to firms, governments, and other bond issuers to indicate their level of safety.

What Are Some Risk-Free Areas for Investing Your Cash?

Savings accounts, money market accounts, and CDs are safe ways to invest your money. These accounts are FDIC insured up to $250,000 per depositor per bank. Even if the bank goes bankrupt, the government guarantees you will receive your money back. Cash in a brokerage account is also quite secure, as it is protected by the SIPC up to $250,000.

Because of the country’s stability, US government bonds are likewise thought to be risk-free. The federal government guarantees to make the installments and repay your principal. Treasuries, I-bonds, and Treasury Inflation-Protected Securities (TIPS) are a few options. A fixed annuity is another highly safe option. These contracts provide a fixed interest rate guaranteed by an insurance company. You do commit to maintaining the money in the annuity for a certain period of years, or you will be penalized for canceling.

What Is the Cash Earnings Interest on Robinhood?

As of December 2023, Robinhood’s cash earnings interest rate was 1.5% APY for free accounts and 5% for Robinhood Gold accounts. You will need to pay $5 per month for Robinhood Gold to get the higher rate. Interest rates also fluctuate depending on market conditions.

To begin earning interest on your Robinhood balance, you must first engage in the cash sweep program. The program then automatically invests your uninvested funds in banks to earn the highest interest rate. This program provides you with additional FDIC protection, protecting your amount up to $2.25 million in uninvested cash.

What is the best option for uninvested cash management?

Typical alternatives for your uninvested cash include keeping it in your brokerage account, “sweeping” (automatically transferring) it to a bank deposit account as part of a bank sweep program or sweeping it to a money market mutual fund as part of a money market sweep program.

How do you earn interest on uninvested cash?

You earn interest on your uninvested brokerage cash that is transferred to the program banks. You only begin collecting interest after these banks receive your funds. This is determined by the timing of trades, deposits, and withdrawals.