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Robinhood launches 3% checking account

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Re: Robinhood launches 3% checking account

#611

Post by pbk1 »

brobinson wrote: post #501
kevindong wrote: post #341

Earlier quoted context omitted.

> My benchmark is Charles Schwab Bank, which offers free ATM fees on any ATM, anywhere. It's what many millennials that I know use. But, it's a bad product and not very user-friendly. Why do you say it's a bad product? I use Schwab as my main account and it works great for me.

Schwab is excellent. Their "high-yield" (lol) investor checking/brokerage account is a good offering due to no minimums, unlimited foreign ATM fee rebates, unlimited checks, etc. Their customer support is amazing. Three rings and a human picks up the phone. My direct deposits go there, but I moved all my investments over to Interactive Brokers since Schwab doesn't offer (to my knowledge) portfolio margin and Schwab's…

Just out of curiosity how do you employ margin in your personal investment portfolio?

Re: Robinhood launches 3% checking account

#612

Post by hn_throwaway_99 »

cjensen wrote: post #381
AustinGrandt wrote: post #45

Earlier quoted context omitted.

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?

The FDIC is part of the government and the government owns a printing press. You WILL get your money back. No private insurance company can provide such guarantees and keep then if the entire sector needs to be bailed out at the same time.

I don't understand this. SIPC is a federally-mandated corporation, not a private insurance company.

Re: Robinhood launches 3% checking account

#613

Post by te0x »

Shorel wrote: post #286
flexie wrote: post #284

This whole checking account / savings account, credit card/ debit card system that Americans have to deal with is so cumbersome and backwards. For Europeans that don't know: Most Americans have (at least) those two accounts, and those two cards. They usually spend from their checking account with their credit card, and save on the savings account. When they spend on their credit card, they sometimes "earn" points, de…

In Colombia we have the USA system. Yes it seems arbitrary and backwards, and banks love to earn fees. Each credit card is another monthly fee, and you can't do international (Netflix) purchases without one.

That sounds awful, and nothing like what we have in the US.

Re: Robinhood launches 3% checking account

#614

Post by zeroname »

zeroname wrote: post #144
snowwrestler wrote: post #95

Earlier quoted context omitted.

Maybe: > 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 . Emphasis mine. If you put $250,000 into an FDIC-protected checking account, that account holds cash and FDIC protects the full amount of that cash. If you put $250,000 in an SIPC-protected brokerage accoun…

I don't think understand that correctly. There's no such thing as a SIPC-protected checking account that holds securities. A checking account holds cash. There's SIPC protection for your cash and securities (stocks etc.) that Robinhood holds for you, up to 250,000$ each. For obvious reasons, the value of a security in dollars fluctuates and therefore such losses cannot be insured. What is being recovered is the secur…

UPDATE:

SIPC CEO rejects claims of coverage:

https://www.barrons.com/articles/activist-investors-on-the-m...

Re: Robinhood launches 3% checking account

#615

Post by krinchan »

deminature wrote: post #252
fullshark wrote: post #232

Earlier quoted context omitted.

Agreed, they are trying to buy customers, if it turns out that they can't convert these customers into traders they will lower the rate to a breakeven amount and not care if they lose those accounts.

Perhaps true, there's been an opening for a 'cool' millennial-oriented financial institution for a while now, so perhaps fewer customers will drop off than expected.

... I can't remember but there was one I used at some time that was like that. Had a weird spirograph logo and a cardboard motif on their site. There were a few others.

Which should tell you a lot. I've been through the "Millennial Bank" wringer.

Honestly, checking accounts are all the same. Especially because I use a credit card paid in full every month. It's a holding pool till next month's CC bill is due. Until the US treats debit cards with the same protections as credit, I won't let my debit card near a gas pump or wander off with a waiter or be used online.

I don't know that there's an opening really. That so-called opening keeps popping up since like 2005 and gets "filled" by a SV-backed MVNO-For-Banking and it's just........a checking account provided by some.other actual bank repackaged with a (nice) angular front end and on the AllPoint ATM network with crappy chat customer support.

Re: Robinhood launches 3% checking account

#616

Post by delta-neutral »

solaxun wrote: post #298
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…

Why does everyone keep referring to checking accounts as "loss leaders"? They are more like "income leaders" - the banks are funding themselves at basically 0% and then earning the spread on whatever they invest in....

+100%, deposits are the cheapest and most reliable source of funding. no comparison to wholesale funding by a large stretch - anyone ever heard of Northern Rock?

Re: Robinhood launches 3% checking account

#617

Post by adrr »

zackmorris wrote: post #282
subraizada3 wrote: post #257

Earlier quoted context omitted.

The SEC and FINRA (regulatory agencies) don't allow day trading for accounts with balances less than $25,000. If you exceed 3 (?) day trades in the past 5 days, your account is locked from day trading for 90 days (so if you buy a stock you will be unable to sell it that day). All exchanges enforce this rule, not just Robinhood.

I hope this gets challenged in court at some point. The rules went into effect on September 28, 2001 as a knee-jerk reaction to the dot bomb and 9/11: http://www.finra.org/investors/day-trading-margin-requiremen... The real story is that the plebes realized they could make 2% per day by day trading and selling short. I did this with my dad and we were up about $40k before 9/11 wiped out most people's gains (this was…

No day trader makes 2% a day without putting all their capital at risk. You can pick up nickels in front of steamroller till that one day it runs you over. I day trade for a living and consider an extremely good month making 5% of total capital in my trading account.

If you short high beta tech stocks on margin as you mentioned in your post, you'll get wiped out really fast. Go to Wallstreetbet subreddit and pull up the thread where a guy lost 1.5mm this year, he lost it shorting high beta tech stock that did a swing of 10% in the wrong direction forcing a margin call and a liquidation.

If you wanted to capture the downside of a stock, you can buy puts without a margin account. You should probably really understand the market better before you expose yourself to a larger risk than the money you put in.

Re: Robinhood launches 3% checking account

#618

Post by beardbound »

krinchan wrote: post #615
deminature wrote: post #252

Earlier quoted context omitted.

Perhaps true, there's been an opening for a 'cool' millennial-oriented financial institution for a while now, so perhaps fewer customers will drop off than expected.

... I can't remember but there was one I used at some time that was like that. Had a weird spirograph logo and a cardboard motif on their site. There were a few others. Which should tell you a lot. I've been through the "Millennial Bank" wringer. Honestly, checking accounts are all the same. Especially because I use a credit card paid in full every month. It's a holding pool till next month's CC bill is due. Until th…

Simple bank. They’re based out of portland. I use them. They’re pretty good and have great support. Also $1 out of country withdrawal fee which is nice.

Re: Robinhood launches 3% checking account

#619

Post by krinchan »

woolvalley wrote: post #469
simonsarris wrote: post #409

Earlier quoted context omitted.

> he US seems to have a wave of startups trying to reinvent checking accounts right now. I wonder which, if any, will take the market Square's Cash App + Cash Card is taking the lead here, IMO. Card, direct deposit, ATM usage, p2p payments, rewards program. They've been the #1 app in finance all year on the Apple store, and were #1 in all free apps for a little while this past week. They are massively popular in the…

I got a cash card, got a generic undefined activation error and no reply from support. I eventually just shredded the card. When I talk to friends for p2p payments, people mostly use venmo, then messenger & apple pay and nobody uses square cash.

Same. I send money over Messenger all the time to feiends and family. Southeastern US here.

Re: Robinhood launches 3% checking account

#620

Post by mikelward »

notyourday wrote: post #559
Scoundreller wrote: post #522

Earlier quoted context omitted.

I’m sure they said that about Cyprus and Iceland too.

If the SPIC fails to cover the cash balances to the coverage limits, the financial world as we know it stopped existing. This are cash balances, not money market funds or any other funds.

Bloomberg says it's a money market account. https://www.bloomberg.com/opinion/articles/2018-12-13/robinh...

Robinhood's checking page says "Robinhood Checking and Savings is an added feature to existing Robinhood accounts and is not a separate account or a bank account."

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