81–90 of 684 posts
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
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%
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
It looks like both FDIC and SIPC have a 250K protection, are there any other differences between the two that would matter to an average consumer?
And if the gov't really wanted to weasel out of FDIC there are plenty of loopholes. For example, I think FDIC can take a long time (up to 10 years?) to pay and is not adjusted for inflation, so inflate, wait and pay pre-inflate amounts is an option (stupid, but technically possible).
As a user of the Robinhood brokerage for all of my "fun investment money" I'm a fan of this. I do wonder how the big banks are going to respond however as this is blatantly a "shots fired" kind of event.
[1]https://www.bloomberg.com/news/articles/2018-10-15/robinhood...
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
I’m not sure why other banks haven’t followed. One month treasury rate is already up to 2.3% now and banks can certainly lend it out at higher than treasury rate.
Basically, Robinhood is subsidizing this 3% interest rate with investor dollars. Of course, there having a higher reserve lets banks lend out more money, but I'm not sure that's worth paying a 1% premium over.
Will the 3% be a long term thing or is it just a sign up gimmick?
Earlier quoted context omitted.
Might be some companies really wanting to know what high rollers on Robinhood are buying. Could be a bit of both.
This seems very likely. Robin Hood users seem to tend towards young and educated, so I imagine the transaction data would be a goldmine.
Maybe I'm doing it wrong but the "no foreign transaction fees" is just as exciting. Using my BofA card on trips always results in a welcome home set of charges I could do without.
Charles Schwab checking account has offered free ATM withdrawal worldwide for a long time.
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 possible, that Robinhood is using high interest rate checking accounts not to make any money directly from them, but to encourage people to keep all their spare money one-click away from its investment products? In that case, checking accounts become just a business cost to Robinhood.