Robinhood launches 3% checking account • Hacker News Board

Re: Robinhood launches 3% checking account

#171

Post by freehunter » Thu, Dec 13, 2018, 4:58 PM UTC

subhro wrote: post #92

freehunter wrote: post #18

Earlier quoted context omitted.

Because there is basically no competition. Plenty of credit unions around my area offer 3% or sometimes 4% checking, but the best bank rate I could find was under 1%. But credit unions and especially new small players like Robinhood aren't going to threaten PNC or BoA or Chase. So why would they give up free money if they don't have to?

Which credit union offers 4% on all money with them? I know of a few CUs that will offer much higher interest on the first X dollars. Ex: inspiruscu.org

I don't know of any that offer 4% on all money, but one near me offers 3% on the first $3k. After $3k though, you might as well get a CD or invest it in something higher return than a checking account.

Re: Robinhood launches 3% checking account

#172

Post by notyourday » Thu, Dec 13, 2018, 4:58 PM UTC

1123581321 wrote: post #74

robraven wrote: post #60

Earlier quoted context omitted.

Does this mean it's not smart to store more than 250k in robinhood? (I don't, just wondering)

You shouldn’t store more than $250k in cash in any kind of bank or brokerage due to the insurance limit (unless the bank has account insurance beyond $250k.) Investments are different, of course. Edit: I forgot about the details of the limit. Thank you all.

Per bank per beneficiary with John Smith POD Jane Smith account being considered different beneficiary than John Smith account.

Re: Robinhood launches 3% checking account

#173

Post by mrnobody_67 » Thu, Dec 13, 2018, 4:58 PM UTC

vthallam wrote: post #17

Link to their blog post instead - https://blog.robinhood.com/news/2018/12/13/introducing-robin...

I wonder if they will cut off people who deposit 7 figures.

Re: Robinhood launches 3% checking account

#174

Post by ankimal » Thu, Dec 13, 2018, 4:59 PM UTC

Are there any reasons for not moving my cash reserves from Marcus to Robinhood given:

* Marcus' interest rate is also adjustable and is lower than 3%.

* Marcus has no ATM access/debit card.

* Getting money out of Marcus requires it to be transferred to another checking account.

Re: Robinhood launches 3% checking account

#175

Post by subhro » Thu, Dec 13, 2018, 5:00 PM UTC

ac29 wrote: post #123

subhro wrote: post #92

Earlier quoted context omitted.

Which credit union offers 4% on all money with them? I know of a few CUs that will offer much higher interest on the first X dollars. Ex: inspiruscu.org

There is usually a cap on those high interest rates - at my CU, its $25k. They pay 2% though, not 4% - it used to be a pretty good deal, but these days its easy to get a money market fund elsewhere that pays more than that with no maximum.

Mind sharing the name of your CU?

Re: Robinhood launches 3% checking account

#176

Post by freehunter » Thu, Dec 13, 2018, 5:01 PM UTC

deadmik3 wrote: post #166

subhro wrote: post #92

Earlier quoted context omitted.

Which credit union offers 4% on all money with them? I know of a few CUs that will offer much higher interest on the first X dollars. Ex: inspiruscu.org

Yeah when I started looking at one of my local credit unions I almost jumped at the 10% interest rate before I realized it was only 10% on the first $1k then less than 1% on everything after that

I hear this argument a lot, but is a checking account really the best place to invest your money? In my view it's better to get 10% on $1k than 0.1% on unlimited, and then take anything over that $1k (or whatever you need in your checking account) and put it in a real investment.

Remember we're talking about checking accounts, not mutual funds. It's not a real investment. You might as well get something even if it's small.

Re: Robinhood launches 3% checking account

#177

Post by benj111 » Thu, Dec 13, 2018, 5:01 PM UTC

LandR wrote: post #47

trq_ wrote: post #30

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.

Unless your monthly turnover is massive you could probably afford to lock some of that away for a year and get higher interest rates.

Or look into an offset mortgage.

Even bog standard instant access accounts are above that, and have the added benefit of not potentially losing all your money when you debit card gets nicked.

Re: Robinhood launches 3% checking account

#178

Post by DINKDINK » Thu, Dec 13, 2018, 5:01 PM UTC

patio11 wrote: post #115

For folks trying to understand this, some context which may be useful: Checking accounts are loss leaders virtually everywhere, the exception being smaller community banks. Their primary revenue stream was, once upon a time, net interest income, but these days due to the extremely low interest environment and alternate sources of funding the revenue stream is more weighted towards fees (primarily NSFs, although that…

>their core strategy, which is spending what would otherwise be a marketing budget on keeping commissions at zero, making money on the other ways

"Making money others ways" aka stripping their clients of financial privacy by selling their clients' investment-decision data: "Robinhood Is Making Millions Selling Out Their Millennial Customers To High-Frequency Traders"[1] If your investment brokerage firm's strategy is to use you as a sucker, no marginal gain in interest rate is worth it.

[1]https://seekingalpha.com/article/4205379-robinhood-making-mi...

Re: Robinhood launches 3% checking account

#179

Post by consumer451 » Thu, Dec 13, 2018, 5:02 PM UTC

elliekelly wrote: post #84

SEJeff wrote: post #14

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.

Oddly enough I suspect the result will be lobbying for stricter financial privacy regulations. Almost half of Robinhood's revenue is from selling data.[1] Big banks won't be able to compete on that front and most of the big players don't participate/make enough money on order flow sales that they'd miss it if it were prohibited. So the banks will do what they do best: lobby congress & regulators to legislate & regula…

From your link:

> Almost all retail brokerages employ the practice

Re: Robinhood launches 3% checking account

#180

Post by barrow-rider » Thu, Dec 13, 2018, 5:03 PM UTC

wool_gather wrote: post #155

iknowordidthat wrote: post #150

Earlier quoted context omitted.

In answer to your metacomment. The financial crisis is a strong indication that, yes financial firms can be terrible at math. Luckily, they have friends who can bail them out with taxpayer money when they fail at math.

Was that them being terrible at math, or them covering their eyes and singing "lalalala" to pretend the math didn't exist?

Was that them being terrible at math, or them knowing that they were selling overpriced goods (00's houses, 90's tech stocks, probably college degrees) to folks who didn't know the math?

Big Finance knew it was hustling rubes, and then was able to ride the Gub'mnt Gravy Train when it became unsustainable.