Cash Sweep automatically moves uninvested cash in your Robinhood account into a money market fund, where it earns interest instead of sitting idle

When you have cash sitting in your Robinhood account that you haven't invested yet, Cash Sweep moves it into a money market mutual fund. The fund invests that cash in short-term, low-risk securities. You earn interest on the money while it remains there. If you need the cash back to buy stocks or options, it returns to your account automatically — usually within one business day.

Robinhood does not charge you a fee for Cash Sweep. The money market fund itself has an expense ratio (a small annual cost), but Robinhood covers that cost for you. You keep all the interest the fund earns.

Key Takeaways

  • Cash Sweep moves uninvested cash into a money market fund where it earns interest instead of remaining idle in your account.
  • The feature is automatic once you turn it on, and you can turn it off at any time without penalty.
  • Cash Sweep is not FDIC insured the way a bank savings account is, because money market funds are securities, not bank deposits.
  • Interest rates on money market funds change with market conditions, so your earnings will vary month to month.
  • You can withdraw the cash back to your account for trading at any time, and it typically arrives within one business day.

How to turn Cash Sweep on or off

Cash Sweep is turned on by default for most Robinhood accounts. To check the status or change it, open the Robinhood app, go to your Account menu, and select Cash Management. You will see a toggle for Cash Sweep. Tap it to turn the feature on or off.

If you turn Cash Sweep off, any cash already in the money market fund will be returned to your regular cash balance within one business day. New cash deposits will no longer be swept automatically.

The difference between Cash Sweep and a bank savings account

A bank savings account is FDIC insured up to $250,000, meaning the federal government guarantees your money if the bank fails. Cash Sweep invests your money in a money market fund, which is not FDIC insured. If the fund's underlying investments lose value, your balance could decline slightly, though this is rare with money market funds.

Money market funds typically offer higher interest rates than traditional bank savings accounts, especially when interest rates are rising. However, the rate is not fixed — it changes as market conditions change. A bank savings account often locks in a fixed rate for a set term.

Interest rates and how much you'll earn

The interest rate on Robinhood's Cash Sweep changes based on the money market fund's performance and current market conditions. Robinhood does not set a fixed rate. You can see the current rate in your Cash Management settings in the app.

The amount you earn depends on how much cash you have swept and how long it stays there. If you have $5,000 swept at a 5% annual rate, you would earn roughly $250 per year, or about $20 per month. The actual amount will be lower because interest compounds daily but is paid monthly, and the rate may change.

What happens when you need the cash back

When you place a trade or withdraw cash from your account, Robinhood automatically pulls the money from your Cash Sweep fund. The process is seamless — you do not have to manually move it back. The cash is available for trading immediately, though the fund itself may take one business day to settle the transaction behind the scenes.

If you withdraw cash to your bank account, Robinhood will use swept cash first. The withdrawal timeline depends on your bank, but typically takes one to three business days.

Risks and limitations of Cash Sweep

Money market funds are generally very stable, but they are not risk-free. The fund's value can fluctuate slightly if interest rates rise sharply or if the underlying investments decline. In extreme market conditions, a money market fund could "break the buck" — meaning its value drops below $1 per share — though this is extremely rare and has happened only a handful of times in history.

Cash Sweep is also not a substitute for an emergency fund held at a bank. If you need may provide access to your money and FDIC protection, a high-yield savings account at a bank is a better choice. Cash Sweep is best for cash you plan to invest or use for trading within months or years, not cash you need immediately in an emergency.

Frequently Asked Questions

Can I lose money with Cash Sweep?

Money market funds are designed to maintain a stable value, but they are not may provide. In normal market conditions, your balance will not decline. In extreme situations, the fund's value could drop slightly, though this is rare. You will not lose money due to Robinhood's fees, because Robinhood covers the fund's expense ratio.

Is Cash Sweep the same as a savings account?

No. A savings account is FDIC insured and offers a fixed or variable interest rate set by the bank. Cash Sweep invests your money in a money market fund, which is not FDIC insured but often offers higher interest rates. The trade-off is slightly more risk and less certainty about your rate.

What if I turn off Cash Sweep — do I lose the interest I already earned?

No. Interest you have already earned stays in your account. When you turn off Cash Sweep, any remaining swept cash returns to your regular cash balance within one business day. You keep all interest accrued up to that point.

How often is interest paid?

Interest from the money market fund is typically paid monthly. The exact date depends on the fund's distribution schedule. You can see the payment history in your account statements.