Robinhood launches 3% checking account

They are not bad guys’s. They are still making money(surprice!?), but they are much much more modest about it than traditional banks. This account is a fine example. They don’t need to give you a 3% deal, but they are doing it anyway because it’s benefitting both them and their costumers.

The rules were put in place to protect people from being lured into day trading by day trading service companies. The thought was to prevent people from spending their rent money thinking they were going to get rich day trading. Also, trading with small amounts of money pushes people into penny stocks, which is an even faster way for someone to lose all their money.

BTW, since the money is so easy you could always have traded futures which are exempt from PDT. https://www.tradingsetupsreview.com/futures-trading-best-opt...

Credit and Debit cards are different things. Debit cards are the European style 'put in a pin and money is debited directly from your bank checking account'. Credit cards are a revolving line of credit from a bank - you're spending against the LOC, and settle up on a monthly basis (to some extent - there's interest and pay-over-time involved in most as well).

The difference in accounts: banks offer substantially higher (although, basically still really low due to todays market) interest on money sitting in savings accounts, and restrict the use and availability of that money. Banks backed by the Federal reserve have to maintain a minimum ratio of deposited money to loans, and these restrictions/incentives are how they keep those in line and stay legal.

And for what it's worth, 99% of my spending is on a credit card, which I pay off monthly. I can't remember the last time I used cash or paper checks.

We also have many different ways to transfer money around, etc. using apps and things.

"Credit card" would be a third account that is purely debt-based. It's optional, and you can spend directly from your checking account with a "Debit card" instead. It's just not advisable, due to the broken-ass card system you described.

"Savings account" is optional, but earns interest. Does your single EU account earn reasonable interest? Long term deposit ("CD" and "Term Share") rates are currently around 3%, with savings paying 2%.

Combining checking and savings accounts can be done in the US in 2018. The 3 major online banks all allow you to setup an automatic "overdraft transfer", so you can deposit into your savings account, spend out of the checking, and have money automatically move between them. The remaining caveat is that you're limited to six of those movements from the savings per statement, which makes aggregating small transactions on a credit card handy.

I expect the caveat with this Robinhood offering will be a cap on the balance that earns 3%. You can find plenty of checking accounts with high nameplate interest (search for Kasasa), but they all demand some level of ongoing mindshare activity [0] and limit the amount they'll actually pay out, rather than functioning as true savings/moneymarket.

[0] Usually a certain number of debit card transactions per month, to better feed the surveillance databases.