Robinhood is looking to gather some assets, rolling out a new ACAT Transfer bonus of a flat 1% of the transferred amount with no cap. That means a transfer of $10,000 in asset value from an external brokerage account will earn a $100 bonus, a $100,000 transfer will earn a $1,000 bonus, and a $1,000,000 transfer will earn a $10,000 bonus. The bonus should arrive about 2 weeks after the completed transfer, but note that you must keep the assets there for 2 years otherwise they will claw it back. Here is the full fine print.
The bonus applies to eligible assets transferred from an external brokerage account into your Robinhood non-retirement brokerage account within the offer period, from October 23, 2023 to December 8, 2023. To keep the bonus, you must keep the money you transfer into Robinhood in your Robinhood individual brokerage account for at least 2 years.
As with all similar ACAT transfer offers, you can transfer over your existing stock holdings and the cost basis should also transfer over with no tax consequences. You don’t have to move cash. You just keep your same old shares of Apple or Coca-Cola or S&P 500 index ETFs or whatever at a different broker. If you already wanted to hold cash, you could also own things like Treasury bill ETFs or ultra-short term bond ETFs and earn interest on top of the bonus, but in that case this bonus isn’t that great because you’re only getting 1% spread over two years.
I’m not a fan of Robinhood’s barebones customer service, and two years is a long time, but 1% might be worth considering for transferring some buy-and-hold index funds if you have a large-enough portfolio to offset potential transfer-out fees later. Here’s the process that I would take at Fidelity (which has good customer service):
- Open a new, separate brokerage account at Fidelity. It will show up with a zero balance.
- Call Fidelity and transfer a little over $100,000 (or whatever number works for you) worth of an index ETF that you already intend to own and hold for 2 years (i.e. VTI) into that new brokerage account. You can designate exactly what you want transferred over. Keep track of the tax basis, just in case.
- Perform a full ACAT transfer of that new, separate brokerage account over to Robinhood. Fidelity does not charge an outgoing ACAT transfer fee. An ACAT transfer can take a week or so to complete, so you won’t be able to make any sell transactions during that time. Verify that the tax basis transfers over eventually (can take a while sometimes).
- Collect the bonus, and then transfer out again after two years – if you wish. (Robinhood’s job is to convince you to stay after these two years.) Note that Robinhood charges a $100 ACAT transfer out fee. You’ll have to either wait for another transfer promotion that reimburses that fee, or consider it a cost of the bonus.
During a conversation with a Fidelity rep about a transfer last year, I heard a memorable quote: “No, we won’t charge you a fee when you transfer out, and we won’t charge you a fee when you come back.” In other words, they are confident enough that they know you might leave for whatever reason, but many will eventually come back.
