For those who don't know Robinhood is a fairly well established app and desktop investment broker
Sounds like a great New Year's resolution! Thanks for sharing this.
The 3% is nice and above current money market rates, but the rate is not fixed and will have to be lowered or raised as conditions warrant, as the Robinhood executives have mentioned. But the plan has many appealing features, save for the inability to write a check using a personal checkbook, since the company will write the check and mail it to whomever. Then again, who writes checks that often anymore.
"Using the Robinhood app, which also links with customers’ investing accounts, consumers can deposit checks. And while account holders won’t receive checkbooks, they can order individual checks through the app that then are cut and mailed by Robinhood."
Interesting about the checks (I didn't read all the details). Then again, many banks, even some brick-and-mortars, also send physical checks as part of their bill pay services in lieu of transmitting funds electronically when that can't be done for some reason, and that seems to work well for many folks.
https://www.reddit.com/r/RobinHood/comments/a5uky5/did_this_huge_fail_make_the_news/
There is a funny moment around 2m:15s:
Sounds great! I haven't read the full offering yet. Do they have a cap, (Tiers like most credit unions do; the first $xxxx will get %3 the next level $xxx only gets %.05????) There are credit union accounts that offer similar rates. They usually come with a bunch of hoops one has to jump through
such as tiered interest rates on differing levels of savings. Requirements for direct deposits. A certain minimum or maximum of transactions per month and of course credit unions also change the interest rate earned based on a number of factors.
Thanks in advance if you have already read the fine print and can answer before I go wading thru all the T and C gobbledygook.
Good point about credit unions. I haven't read the fine print yet and cannot answer you questions about caps, etc., but wanted to mention that I have used a credit union for many years with free checking and other services, superior interest rates compared to banks, and stellar customer service, and it was easy, at least in my case, to join. Also wanted to mention that that there are some saving accounts, such as American Express Personal savings( anyone can open an account), that currently offer %2+ rates, which are lower than the %3 but nothing to slouch at.
Just be aware that this is more like a money market account which is not as safe as a regular savings account as a bank. But the risk should be minimal.
And note I am not endorsing the company itself as I have never used them nor do I know that much about them.
I don't think there is a cap.
Distinction between a money market account and money market funds.
SIPC Says It Has Serious Concerns About Robinhood's New Product
Oh, don't forget T-Mobile Money is 4% for deposit up to $3K.
Robinhood Announces 3% Checking & Savings - Major Things to Consider
"When Robinhood Checking & Savings become available, is it worth the risk? In today’s rate environment, it’s easy to get an online savings account from an FDIC-insured bank with yields between 2.25% and 2.50%. In another month, we may see even higher yields. Even if the SIPC eventually confirms SIPC coverage of the Robinhood Checking & Savings, these accounts will still seem to me to be more risky than money market funds. As a general rule, when you’re yield chasing, be very careful when you are considering institutions that are not federally-insured banks or credit unions. It makes sense to first consider all possible ways to maximize yield with federally-insured deposit accounts."
I guess it's back to the drawing board on how to give 3% to the poor, and the 850,000 people on the waiting list are out of luck for now. Maybe tomorrow or next year.
