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Robinhood launches 3% checking account

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Re: Robinhood launches 3% checking account

#621

Post by m3at »

Aunche wrote: post #215
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…

> geeks who believe they have outmathed a financial firm should ask themselves "Are financial firms likely to be bad at math?" and "Are financial firms incapable of hiring their own geeks?" Moviepass was also bought by a financial firm... Come to think of it, they have many similarities. Both companies are basically handing out free money and it's unclear how they would make any profit. People speculate that both com…

Robinhood doesn't make money on commissions, but they do make money with payment for order flow [1]. So they wouldn't want to put a cap on the number of trades you can make.

[1] https://www.investopedia.com/terms/p/paymentoforderflow.asp

Re: Robinhood launches 3% checking account

#622

Post by rspeer »

RA_Fisher wrote: post #583
halr9000 wrote: post #574

Earlier quoted context omitted.

> Seems like a weak market to go after, given that people likely to respond to a "cool" financial services brand may be a poorer demographic that maybe doesn't have any prior experience with "legacy" financial services providers. Yeah but people do grow up. And I don't know about you, but I've got some super long term relationships with some banks. They are in it for the long game.

I find legacy banks a nuisance. They're always trying to get me to come into a bank branch.

Huh. I don't have much of a problem going in to a bank branch, given that there's one every half mile. A quick in-person meeting is fine compared to the shitstorm of unusable menus and nearly unintelligible communication that is calling your bank on a cell phone.

(I mean it would be great if there were a bank that did all its customer service over text chat, but that's too much to ask for, right?)

Re: Robinhood launches 3% checking account

#623

Post by dillondoyle »

kevindong wrote: post #341
philip1209 wrote: post #332

I just spent 3 months in London, and it's crazy how Monzo seems to have taken the market. Almost everybody seems to be paying with a Monzo card, regardless of age. Asking around, I consistently heard that Monzo's competitors like Revolut are going to be a future case study in scaling before great product/market fit. I don't know how many people have Revolut accounts, but nobody seems to be using their cards in public…

> 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.

My experience as well. Schwab customer service compared to my other checking is consistently and notably better.

For me the killer is no foreign transaction fees. If Robinhood allows world wide ATM + no foreign transaction fees I'd switch in a heartbeat. I dont use Schwab for equities, I use Robinhood & Wealthfront

Re: Robinhood launches 3% checking account

#624

Post by parent5446 »

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…

FWIW, Schwab does have portfolio margin, although I have no idea what the rates are.

Re: Robinhood launches 3% checking account

#625

Post by shrimpx »

X-Istence wrote: post #535
stupidbird wrote: post #443

Earlier quoted context omitted.

The average person is more likely to lose money day trading than gain (especially considering the time sink). It's basically boring slow gambling wrapped in the guise of The American Dream.

The average person shouldn't day trade. I buy stocks and basically hold them for years. I've picked some losers and I've picked some winners... but overall my return over the last ~5 years is 19%. Buying stock with dividends helps even more, now you get money back to invest into more stock :-D

If you just bought s&p or brk (arguably conservative choices) you'd have earned 60%.

Re: Robinhood launches 3% checking account

#626

Post by adrr »

toomuchtodo wrote: post #63
suddenstutter wrote: post #35

Earlier quoted context omitted.

Its not too good to be true. These are simply the effects of true non crony capitalism at work. Decentralisation of everything is forcing the crony status quo capitalistic system to change, thus pushing the boundaries of progress further than before. This is simply the beginning.

Until Robinhood exhausts its runway, is acquired by a traditional finance firm, or is run out of business by FINRA complaints because they kill options trading for hours at a time for their users during market hours [1]. [1] https://i.imgur.com/VTZifUQ.png

Best was when they exercised out of the money expiring options. I wonder how much they lost on that.

Re: Robinhood launches 3% checking account

#627

Post by foobarbazetc »

woolvalley wrote: post #458
philip1209 wrote: post #332

I just spent 3 months in London, and it's crazy how Monzo seems to have taken the market. Almost everybody seems to be paying with a Monzo card, regardless of age. Asking around, I consistently heard that Monzo's competitors like Revolut are going to be a future case study in scaling before great product/market fit. I don't know how many people have Revolut accounts, but nobody seems to be using their cards in public…

In America, I don't think contactless matters that much currently. It's really a crap shoot if any specific retailer supports contactless, no major metro system that I know of support direct debit / credit contactless cards and no major bank or credit card company issues contactless cards. If you want to use contactless in america, you add the card to apple / google / samsung pay and use your phone for NFC payments.…

Most Amex US cards are now issued with contactless.

Chase is about to add it to all their cards.

Re: Robinhood launches 3% checking account

#628

Post by cco »

kevindong wrote: post #488
philip1209 wrote: post #435

Earlier quoted context omitted.

I love Schwab's checking account product because it's highly functional. But, I don't think that it has mass-market appeal. It appeals to a rational buyer, not an emotional one. The opportunity here for a startup bank is to replace credit card spending in the USA. The potential earnings are huge if you can get consumers to spend on a debit card instead of a credit card (because the rake is higher). To make a checking…

> I love Schwab's checking account product because it's highly functional. But, I don't think that it has mass-market appeal. It appeals to a rational buyer, not an emotional one. Isn't that the wrong perspective on a financial product? I agree that good design is important, to a degree. Once a certain level is hit, you're not going to gain/lose very many customers based upon the UI. I don't think anyone should favor…

A coworker looked over my shoulder as I was signing up for Robinhood checking today, saw the American flag debit card and literally yelled, "I NEED THAT CARD!". He signed up using my referral code, you have to learn that you're not the normal consumer.

Re: Robinhood launches 3% checking account

#629

Post by foobarbazetc »

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…

... what?

Re: Robinhood launches 3% checking account

#630

Post by test6554 »

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…

So if you do just park $249,384.70 there, are they going to just let you withdraw interest of $616.05 each month without any risk or fees?
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