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It may not be typical but the vanguard Total market index fund is up 19% year to date. Robinhood is still paying 4.5% interest just for you to leave cash holdin
by elmerfud 2y ago
It may not be typical but the vanguard Total market index fund is up 19% year to date. Robinhood is still paying 4.5% interest just for you to leave cash holding in their pockets. If they can afford that kind of interest rate to just park cash with them that you can pull it literally anytime how much do you think they're really making? Still think they're just getting 7% a year?
- bityard 2y agoYes, I do. The recent returns on VTI are irrelevant. The market goes down, the market goes up and nobody can predict which way it will move next. We only know how it behaves over decades, as a result of economic output. Robinhood, money market accounts, and HYSAs are offering high interest rates because we are in a high interest rate environment. (Which usually correlates to a high inflationary environment.) So yes, if Robinhood is behaving like any other bank, they are happy to offer their customers 4.5% in order to buy bonds (and whatever else) at 5-6% because even though the margin is small, the volume more than makes up for it.