Robinhood.Com To Offer 3% Checking & Savings

Blade | Dec 13, 2018 | 17 posts since 2018

Just read that commission free trading platform, Robinhood, will launch a new app today allowing users to setup checking and savings accounts with them that will offer 3% interest with no fees or restrictions. It will be considered a brokerage account with SIPC coverage. I've used Robinhood for occasional high frequency trading since 2015 and it has worked exactly as advertised with no issues. This will be an interesting development to watch!

https://www.cnbc.com/2018/12/13/robinhood-goes-after-banks-with-checking-and-savings-accounts.html

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TheBombingRange | Dec 13, 2018 | 99 posts since 2017

Beat me to it! I've seen a few high interest debit/savings projects like this come up over the years, but combining their investing platform with a checking and savings account is the next step in nationwide fee-free banking and investing. While I'm personally more of a fan of M1 Finance, which also offers fee-free trading and fractional shares (which I find very powerful) and is planning to release their M1 Spend banking product in a few months, this is a great development for the industry as a whole!

cddeals | Dec 13, 2018 | 3 posts since 2010

Do you think this will be a short term teaser rate or will be ongoing?

tipsy | Dec 13, 2018 | 2 posts since 2018

https://finance.yahoo.com/news/robinhood-start-upending-stock-trading-150000156.html

according to the information in this article its not meant to be a teaser

"Bhatt, who co-founded Robinhood in 2013 with Vlad Tenev, said that the yield is not a "teaser rate.""

JimDavis | Dec 13, 2018 | 61 posts since 2015

Wonder if you can keep $ in the savings and still trade against it as needed (sweep style)

Also, how protected is that money , since its not fdic, but sipc

al1950 | Dec 14, 2018 | 1 posts since 2014

do you think the SPIC would cover your cash ( if they go under or fraud etc) up to $250K like FDIC or credit union insurance? Allan

MidAtlantic | Dec 14, 2018 | 117 posts since 2012

There is serious doubt about whether it would be SIPC covered:
https://www.bloomberg.com/news/articles/2018-12-14/sipc-says-it-has-serious-concerns-about-robinhood-s-new-product

tipsy | Dec 14, 2018 | 2 posts since 2018

https://finance.yahoo.com/news/robinhood-3-interest-checking-just-194159824.html

a little more detail. If the account is really a MMF, that's probably more concerning since it's up to the institution not to break the buck. Though as the article noted if it's investing is treasuries it's not a big deal, but that's not a long term strategy. Likely we'll see a rate cute, or them taking on more risk to narrow the spread, which will increase the risk of breaking the buck if something does go wrong.

no such thing as a free lunch.

Blade | Dec 14, 2018 | 17 posts since 2018

And the SIPC is now stating it will not cover funds that are not actively being used to purchase securities while at the same time Robinhood is stating the funds do not have to used for that purpose.
https://www.axios.com/robinhoods-new-checking-account-b2b0df32-40c6-4bd1-b336-2408b27f16b0.html

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