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How To Make Money On Robinhood [Complete Guide]

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goldie smith
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In contrast to traditional stockbrokers, who profit by selling their orders to a high-priced market maker, Robinhood earns interest on cash and assets.


Robinhood tradingRobinhood is a free stock trading app that is sweeping the globe. It's already worth more than $5 billion on paper, just closed another massive round of funding at a valuation of $6 billion or more, and its user base is expanding faster than ever.


But how do you make money using Robinhood? In contrast to traditional stockbrokers, who profit by selling your orders to a high-priced market maker, Robinhood earns interest on the cash and assets in your account.

How to Make Money on Robinhood?

Robinhood provides a variety of financial solutions that can be utilized to earn money. Here are a few examples:


  1. Through Dividends

You will likely pay your dividends with stocks and ETFs purchased on Robinhood. Dividends are normally paid quarterly and are automatically deposited to your account's cash balance.


However, the same dividends can be used to purchase further shares. Robinhood allows you to use this dividend reinvestment function if you have your fractional shares activated. You will earn compound interest on this reinvestment. So you can look for and invest in dividend stocks offered by a company that assures dividend payments.


  1. Asset appreciation

All investors profit by following the general investment idea of "buy low and sell high." This means that you buy a stock or an ETF at a low price and then sell it for a profit later. To profit from asset appreciation, you must have the market on your side. As a result, if the overall market is down, all investments will suffer.

  1. Crypto Investing

Users can also make money by trading in cryptocurrency on Robinhood. Cryptos, on the other hand, allow you to profit from asset appreciation.

Given the volatility of the cryptocurrency market, you are likely to profit. However, it is also possible that it will cost you money. As a result, investments should only be undertaken after extensive investigation.

  1. Robinhood IPO Access

Robinhood allows its users, or regular investors, to invest in IPOs and profit from them. Users can look up which IPOs are available and request the number of shares they want to buy. The rest is analogous to asset appreciation.

  1. Interest on Savings

Robinhood's cash management tool allows consumers to earn interest on their idle cash. The platform allows users to earn interest on their account deposits.


Furthermore, it serves as a one-stop shop for consumers to pay bills, send checks, be paid, and earn interest. Robinhood collaborated with FDIC-insured institutions to develop these features. 

How Much Can You Make With Robinhood?

If you had purchased $10,000 in Apple stock when Robinhood first launched in February 2015, it would today be worth $14,360. That's a 56 percent return in around 25 months ($340 each month).


To make more money on Robinhood, you must invest more money. There are a couple of simple ways to accomplish this:

  • Keep the free money in your account and only pay interest on it. How much is it? Apple now offers a dividend yield of 5%, which implies that the $10,000 investment from above would bring in an extra $500 every year.
  • Put your money in a bank that pays interest. Ally Bank is arguably the best option here, as their savings account now yields 1.35 percent and offers a $150 sign-up bonus. Their checking account earns interest as well, but you must deposit more than $15,000 into it.
  • Put part of your money in a high-yielding savings account with a trustworthy bank, such as Barclays or Synchrony Bank. They both pay 1% interest and give a sign-up bonus of up to $200. If I recall properly, the initial transfer is free, but the return transfer is not.

You can do this to put more money into Robinhood and spend the interest you'll earn on it, but there's a catch: due to the way Ally works with external banks, you can't buy stocks with an external bank account. After moving cash into Ally, you must withdraw them from the external bank.

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Robinhood is a free trading app that helps us in trading and earn money. We can make money online after getting help in trading to use this app.

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