Recently, $HOOD started offering 5% APY for its Gold subscribers on any uninvested cash subscribers have in their Robinhood account. While it is a smart way of getting people to move cash out of their low yielding, FDIC-insured bank accounts and into their non-FDIC insured brokerage account, the reality is, people usually invest every penny they have in their brokerage account into the market. For Robinhood, which offers fractional shares to its users, it will be tough to find any cash in people's accounts when fractional shares make it easier to put every penny to work.

When thinking through the ROI analysis of this move, I couldn't come up with a financial model that shows an ROI percentage of this move. Robinhood is using this promo to get more people to subscribe to Gold, which cost $5/month. It's assumed Robinhood won't be paying interest to new subscribers because they'll automatically decide to invest their money.

The ROI on this move can be considered infinite.

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