So… how is Robinhood paying out these 3% transfer bonuses?

General
21

Tal said:
@Oli
I’m guessing they’re making money by loaning out shares, probably without telling people—or maybe it’s buried in the fine print.

Don’t all ETFs and mutual funds do this anyway? That’s how they keep fees so low, I assumed.

22

@Oli
What’s the worst that could happen? Like they’re just pocketing your money without actually buying the stocks?

23

@Oli
There are definitely people moving millions to Robinhood for these bonuses.

24

@Oli
I moved a couple of million over myself.

25

Cort said:
@Oli
I moved a couple of million over myself.

Same here, about $3 million total.

26

@Oli
I moved $400k from E*TRADE and Vanguard. It’s literally free money.

27

@Oli
I moved a decent amount too, even just for the 1% bonus. It paid for a month-long trip to Europe.

28

@Oli
I know two people personally with millions in Robinhood.

29

@Oli
That’s not true. Check the forums like Bogleheads.

30

@Oli
I’ve built up to about $100k there, and I don’t see why not.

31

@Oli
My parents have moved about $20M between IRAs and regular accounts, but they don’t plan to stay long-term.

32

@Oli
I’ve heard YouTubers mention people moving millions for the bonus. Not sure how true it is, though.

33

@Oli

34

Nicole said:
@Oli

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35

Ren said:
They make a lot from monthly fees, order flow, and they hold a ton of cash.

Payment for order flow is only about 5% for Robinhood. It’s great for small-time investors who’d otherwise pay $5 per trade. Not so great if you’re trading $50k at a time, though.

36

You also have to hold the funds for years or they’ll claw back the bonus.

37

Sam said:
You also have to hold the funds for years or they’ll claw back the bonus.

What if I lose it all before then? I’ve outsmarted the system.

38

Sam said:
You also have to hold the funds for years or they’ll claw back the bonus.

How many years?

39

Keegan said:

Sam said:
You also have to hold the funds for years or they’ll claw back the bonus.

How many years?

Five years for the highest bonus percentage.

40

Keegan said:

Sam said:
You also have to hold the funds for years or they’ll claw back the bonus.

How many years?

2-5 years, depending on the bonus amount.