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This is higher than even most long-term CDs at the moment. Anyone have thoughts on how this is possible? Possibly a teaser that will adjust down soon?
Link to their blog post instead - https://blog.robinhood.com/news/2018/12/13/introducing-robin...
>With Robinhood, you’ll earn 3% on your money in both Checking & Savings, and interest compounds and is paid out daily. That’s an extra $240 a year for the average American household with $8,000 in the bank Does not compute. If it compounds daily then yearly total is above 3%
This is higher than even most long-term CDs at the moment. Anyone have thoughts on how this is possible? Possibly a teaser that will adjust down soon?
Could be a bit of both.
They are offering this as a brokerage and not a bank so the accounts are not FDIC insured but SIPC insured instead https://support.robinhood.com/hc/en-us/articles/360001469903
Is it FDIC insured?
https://support.robinhood.com/hc/en-us/articles/360001469903
Is my money insured?
Your cash in Robinhood is insured up to $250,000 by the Securities Investor Protection Corporation (SIPC). SIPC protects cash deposits in your account in the unlikely event that Robinhood fails.
Up to what amount?
SIPC insurance covers your checking, savings and investments. Your cash and securities in Robinhood are protected up to a total of $500,000 by the SIPC, $250,000 of which can be in cash, the rest in securities. SIPC insurance provides protection for your cash balance and securities holdings if Robinhood fails financially, but does not cover investment losses due to declines in the value of securities themselves.
Is this different from bank insurance?
Similar to FDIC insurance, SIPC protects cash in your account if the financial firm fails. FDIC insurance covers deposits in FDIC-insured federal banks. SIPC insurance covers cash and securities at SIPC-member brokerage firms. Robinhood Securities, LLC is a member of SIPC. Additional information can be found at sipc.org.
Unless I'm completely ignorant of what's out there, 3% interest on a free personal checking account is absolutely bonkers. I can only imagine everyone in /r/churning jumping on this if they have an invite.
I guess I'm a bit naive, why is this?
I'd love a checking account, with no fees that pays 3% on the whole balance.
My average balance on my current account is around £20k. My interest would be £600 a year at 3%, as opposed to £25 or so I get now.
Unless I'm completely ignorant of what's out there, 3% interest on a free personal checking account is absolutely bonkers. I can only imagine everyone in /r/churning jumping on this if they have an invite.
from what I understand Tesco bank had purchased bonds/securities/whatevs with a 5% interest rate, so made 2% off the deal. (and a slew of new customers worth x each to the bank)
Hopefully something similar is funding this
Is it FDIC insured?
[0]: https://support.robinhood.com/hc/en-us/articles/360001469903
Earlier quoted context omitted.
I guess I'm a bit naive, why is this?
My checking / current account pays less than 1% and that's only on the first £2500 (I think), after that the interest is zero. I'd love a checking account, with no fees that pays 3% on the whole balance. My average balance on my current account is around £20k. My interest would be £600 a year at 3%, as opposed to £25 or so I get now.