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When you hold uninvested cash in your brokerage account, this is money that’s not earning a return in the market. This can feel like a wasted opportunity, especially at a time when banks are paying some of the highest interest rates in over a decade.
Fortunately, some investment platforms offer features where your uninvested cash earns interest. The broker itself doesn’t pay interest. Instead, it puts idle cash from investors into an FDIC-insured bank account. This system, known as a cash sweep program, can allow you to still earn a decent interest rate while keeping your money available to invest. Ideally, a sweep program is convenient, doesn’t charge you a fee, and has simple account requirements. If you expect to hold uninvested cash, here are the best investment accounts worth considering.
Best Investment Platforms for Handling Uninvested Cash
| Platform | Account Minimum | Annual Percentage Yield | Monthly Maintenance Fee |
| Betterment | $0, $10 minimum to start investing | 4.50% | $0 |
| Interactive Brokers | $0 | 4.83% for IBKR Pro customers with AUM of $100,000, 3.83% for IBKR Lite customers | $0 |
| Wealthfront | $500 for the robo-advisor, $1 for stocks | 4.50% | $0 |
| Empower | $100,000 for wealth management, $0 for individual investment accounts | 4.20% | $0 |
| Fidelity | $0 | 4.91% brokerage account, 2.72% cash management account | $0 |
| Robinhood | $0 | 4.50% for Gold customers, 0.1% for regular customers | $5 for Gold customers, $0 for regular customers |
Betterment
Betterment will now match 1% of your net Roth and traditional IRA contributions until December 30, 2024. Terms apply. Get started today.
- Account Minimum: $0, $10 minimum to start investing
- Fees: 0.25% (annual) for investing plan accounts with at least $20,000 or at least $250 per month in recurring account deposits ($4/month for smaller balances); optional 0.65% (annual) fee on accounts with at least $100,000 in assets in investment and cryptocurrency accounts unlocks premium with unlimited access to certified financial planners (for accounts with at least $2 million, there is a fee discount of 0.10%)
If you’d like help with your portfolio, Betterment is a robo-advisor that takes care of the investment decisions for you. You simply pick a type of portfolio strategy, then Betterment’s robo-advisor will build a portfolio of stocks, bonds, and other assets to meet these goals. In exchange, it charges a flat fee: $4 per month or 0.25% of accounts worth at least $20,000. This is considerably less than the 1% or more per year charged by a human advisor.
To go with its robo-advisor, Betterment offers a high-yield cash account called Cash Reserve. The Cash Reserve account earns a very high annual percentage yield (APY) of 4.50% APY on all balances, as of September 2024. There’s no minimum balance required to earn interest and the rate applies to all accounts, and your balance receives FDIC insurance up to $2 million.
Once you’re ready to invest, you can then transfer the cash to your Betterment portfolios. Alternatively, Betterment offers a no-fee checking account. You could transfer cash to this account to spend on a debit card or make ATM withdrawals. However, it doesn’t earn interest like the Cash Reserve account.
Pays an excellent cash interest rate
No account minimum to earn interest
Robo-advisor automatically manages investments
Good selection of investment portfolios
Easy-to-use accounts
No investment options beyond the robo-advisor
Portfolios only use ETFs as investments
Doesn’t allow margin trading
No weekend live customer service
Interactive Brokers
Interactive Brokers
- Account Minimum: $0
- Fees: $0 commissions for equities/ETFs available on IBKR’s TWS Lite, or low costs scaled by volume for active traders that want access to advanced functionality such as order routing; $0.65 per contract for options on TWS Light; $0.65 base rate for TWS Pro users, with scaled rates based on volume; $0.85 per contract for futures
Interactive Brokers is one of the best options for serious traders and investors. Its platform offers a wide range of investment technology, advanced research, and access to over 150 markets. Interactive Brokers offers commission-free trading for stocks and ETFs through its IBKR Lite program. It does charge low commissions for its more advanced IBKR Pro platform in exchange for more trading capabilities and better order execution.
Interactive Brokers offers a program for uninvested cash that should be highly appealing for serious investors. As of September 2024, it pays an interest rate of 3.83% for IBKR Lite accounts and 4.83% for IBKR Pro accounts on balances above $10,000. As rates change over time, IBKR Lite accounts earn one percentage point less than IBKR Pro. You don’t need to opt in to earn interest. However, you can join an additional sweep program to get more FDIC insurance on your cash balance: $2.5 million of coverage on top of the normal SIPC coverage of $250,000.
The drawback with Interactive Brokers is you need a large account balance to earn its best rate. If your total brokerage account balance is over $100,000, you earn interest on all your uninvested cash. However, if your account value is less than $100,000, Interactive Brokers will not pay interest on your first $10,000 of uninvested cash. On an $11,000 cash balance, only $1,000 would earn interest.
High interest rate on uninvested cash
Powerful, customizable brokerage platform
Superior order execution
Vast range of markets and investment options
Low margin rates
Restricts interest payments for accounts less than $100,000
Platform can be overwhelming to learn
Complicated fee structure
Charges commissions for IBKR Pro trades
SmartRouting not available for IBKR Lite accounts
Wealthfront
Wealthfront
- Account Minimum: $500 for the robo-advisor, $1 for stocks
- Fees: 0.25% for most accounts; no trading commission or fees for withdrawals, minimums, or transfers
Wealthfront is another highly rated robo-advisor. Its platform can automatically build you a portfolio using funds with US stocks, foreign stocks, bonds, and real estate. You start by answering a few questions about your investment goals, and the robo-advisor goes to work to build you a suitable portfolio. You can also make zero-commission trades in stocks with Wealthfront.
As of September 2024, Wealthfront’s Cash Account pays a highly competitive APY of 4.50%. The high interest rate applies to all your uninvested cash. There is no minimum or maximum balance. You just deposit cash and earn interest until you’re ready to invest. Your cash receives up to $8 million in FDIC insurance (and $16 million for joint accounts) thanks to the banks Wealthfront works with.
There are no account fees or restrictions for the Cash Account. You can transfer money in and out as often as you want. You also receive a debit card to make purchases.
Excellent interest rate for uninvested cash
No fees or account requirements for earning interest
Good range of robo-advisor investment options
Offers free financial planning tools
Automatic, daily tax-loss harvesting
No human advisors available
Limited investments besides stocks and the robo-advisor
Limited chat and customer service
No fee reduction or extra support for larger accounts
Empower
- Account Minimum: $100,000 for wealth management, $0 for individual investment accounts
- Fees: 0.89% to 0.49% for accounts over $1 million
Empower combines the technology and convenience of a robo-advisor with the support of traditional financial advisors. Its platform offers ongoing portfolio allocation recommendations, rebalancing, tax optimization, and unlimited access to speak with a human advisor. To use this service, though, you need an account balance of at least $100,000. If you invest on your own, Empower’s investment accounts do not have an initial balance requirement.
Empower’s Personal Cash account also does not have a minimum account balance requirement. As of September 2024, the account earns a high APY of 4.20%, and there are no balance requirements or fees to earn this interest rate. However, you do need to transfer your cash out of any Empower investment account into the cash account to earn interest; it doesn’t happen automatically.
Empower offers aggregate FDIC insurance up to $5 million on your balance. While you can transfer money out of the cash account as often as you want, Empower does set a daily withdrawal limit of $100,000. To help manage your money, you can access Empower’s free financial planning tools like its budget planner and net-worth calculator.
High interest rate on cash account
No account minimum required for interest
Combines a robo-advisor with human planners
Good selection of investment strategies and portfolios
Free online money management tools
$100,000 account minimum for robo-advisor
Must transfer money to cash account for interest
Higher fees versus other robo-advisors
Must call to set up an account
Mobile app missing some desktop functionalities
Fidelity
- Account Minimum: $0
- Fees: $0 for stock/ETF trades, $0 plus $0.65/contract for options trades
Fidelity is one of the largest investment brokers in the world thanks to its commitment to low-cost investing. It does not require a minimum account balance, charges no fees or commissions on stock and ETF trades, and has low administrative fees. Its platform is user-friendly for beginners, yet offers plenty of screeners, portfolio analysis tools, and other features for serious investors. For this reason, it ranked as the best overall broker in our review of Best Online Brokers and Trading Platforms.
Fidelity’s program for uninvested cash is also simple and competitive, offering 4.91% on uninvested cash through a sweep into money market funds. Fidelity's cash management program operates more like a bank account, offering bill pay, an ATM card, and mobile check deposit. The cash management program earns an APY of 2.72%, as of September 2024. If you have both types of Fidelity accounts, you can transfer cash back and forth.
Automatically pays a high interest rate on cash
All sized accounts earn interest
Low costs and trading commissions
User-friendly, powerful investment platform
High quality research tools and educational materials
Charges fees for international stock and currency trades
No commodities or futures trading
High fees for broker-assisted trades
Above-average fees for options
Robinhood
Robinhood
- Account Minimum: $0
- Fees: $0 commissions for stock, ETF, options, and cryptocurrency trading (small markup is priced in)
When it first hit the scene, Robinhood made a big splash in the investment world. Robinhood’s app made investing incredibly easy—some might say even too easy. Robinhood’s trading app offers zero-commission trades for stocks, ETFs, options, and cryptocurrencies. Its investment research tools are a little limited compared to major desktop platforms, but are enough for casual investors.
Robinhood does have a competitive program for uninvested cash, but there’s a catch. You must have a Robinhood Gold account to qualify for its highly advertised rate. Robinhood Gold offers premium features like Morningstar research, a larger limit for instant deposits, and lower rates for margin investing at a cost of $5 per month.
If you pay for Robinhood Gold, you earn 4.50% on all your uninvested cash. However, if you just have a free Robinhood account, you only earn 0.1%. Whether the $5 monthly fee is worth it depends on the size of your cash balance and whether you want the other Gold benefits. To use Robinhood’s program, you must opt in to use cash sweep on the app. This makes you eligible to earn interest and increases the FDIC coverage of your cash balance to $2.25 million. There’s no minimum or maximum balance requirement to earn interest.
High interest rate for Robinhood Gold users
Zero commission trades
App is very easy to use
Fractional share trading available
No minimum balance requirements
Must pay $5 monthly for Robinhood Gold for highest APY
Free accounts earn a moderate interest rate
Only basic research tools
Limited asset selection
Research Insights
When evaluating investment accounts for uninvested cash, accessibility is crucial to ensuring that investors can easily access their cash when needed without facing unnecessary restrictions or penalties. Additionally, safety is paramount, with investors seeking accounts that offer FDIC insurance to safeguard their uninvested cash against the loss of their deposits in an FDIC-insured bank or savings association that fails. The APY earned is another critical consideration, as investors aim to maximize the return on their uninvested cash while maintaining liquidity and safety.
Moreover, investors should also assess any associated fees or account minimums when comparing investment accounts for uninvested cash. Minimizing fees and meeting any required minimum balances can help investors optimize their cash management strategy and maximize the return on their uninvested cash. By prioritizing liquidity, safety, yield, and cost-effectiveness, investors can select an investment account that aligns with their cash management needs and helps them achieve their financial goals effectively. - Amrut Deshmukh, Investopedia Research Analyst
Final Verdict
All the brokers on this list offer excellent programs for uninvested cash, assuming you can qualify for the best rates. The right fit depends on your investment goals as well as expected account balance. Interactive Brokers makes sense for serious investors who want the most investment capabilities, but it is actually Fidelity with the highest interest rate and an amazing platform of its own.
Betterment and Wealthfront are both solid if you want a robo-advisor. They are quite similar and the right fit depends on which platform you prefer. Empower’s cash account is also very good. There’s no minimum account balance to use it, plus you get access to free financial planning tools. However, you need $100,000 to invest through Empower’s robo-advisor. Last, Robinhood’s program is very competitive if you’re willing to pay $5 monthly for Robinhood Gold. Otherwise, its rate is mediocre compared to the others.
Frequently Asked Questions
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How Else Can You Earn Interest on Cash?
Outside of the brokerage accounts, the simplest way to earn interest on cash is by keeping it in a high-yield savings account or money market account. There are online banks paying interest rates far above what you would earn from the major brick-and-mortar banks. With savings and money market accounts, you also keep instant access to your cash.
If you’re willing to lock your money up temporarily, you could put it in a bank certificate of deposit (CD). These can pay a higher interest rate, but you need to keep the money in for a set number of months or years. If you withdraw it early, you must pay a penalty. Bonds are another option. They pay interest, but there can be a risk of nonpayment, like if the bond issuer goes bankrupt. Generally, the higher the bond risk, the higher the interest rate. Rating agencies give companies, governments, and other bond issuers a letter grade showing how safe they are.
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What Are Some Risk-Free Areas for Investing Your Cash?
Savings accounts, money market accounts, and CDs are a risk-free way to invest your cash. These accounts receive FDIC insurance up to $250,000 per depositor per bank. Even if the bank goes bankrupt, the government promises you’ll get your money back. Cash in a brokerage account is also very safe as it is insured by the SIPC up to $250,000.
U.S. government bonds are also considered risk-free because of the stability of the United States. The federal government promises to make these payments and return your principal. Treasuries, I-Bonds, and Treasury Inflation-Protected Securities (TIPS) are a few possibilities. A fixed annuity is one more very safe option. These contracts pay a set interest rate, guaranteed by an insurance company. You do agree to keep the money in the annuity for a set number of years, though, or you’ll owe a penalty for canceling.
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What Is the Cash Earnings Interest on Robinhood?
As of September 2024, the cash earnings interest rate on Robinhood was 0.1% APY for free accounts and 4.50% for Robinhood Gold accounts. You do need to pay $5 a month for Robinhood Gold to get the higher rate. The interest rates also change based on market conditions.
To start earning interest on your Robinhood balance, you must enroll in its cash sweep program. Then the app automatically places your uninvested cash in banks to earn the high interest rate. This program gives you additional FDIC protection, insuring your balance up to $2.25 million for uninvested cash.
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