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Robinhood new 3% Cash Management account

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Robinhood's new 3% Cash Management program is launching in early 2019 but you can get on the waiting list now.

Earn 3% on your money, pay no fees, and access over 75,000 free ATMs.

Popular online stock-trading platform Robinhood is offering Cash Management account with an interest rate that's roughly thirty times higher than the national average.

Robinhood Cash Management account has no fees or account minimums, building off of the company's free stock-trading model that ushered in 6 million users and a $5.6 billion valuation in its five-year existence.

The company is launching a new app on Thursday that will house its stock trading alongside the Cash Management account.

You have to download the Robinhood app or follow the link below to take advantage of it.

Robinhood [robinhood.com]
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Created 12-13-2018 at 07:18 AM by shade45
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Last Edited by shade45 December 15, 2018 at 09:16 PM
They changed the name to Cash Management and you can still get on the waiting list.

SIPC Says It Has Serious Concerns About Robinhood's New Product
Details: https://www.bloomberg.com/news/ar...ew-product

Is my money insured?

No. Robinhood did not confer with SIPC before the announcement, and SIPC does not appear to be insuring the money.


BREAKING... may be risky!


In an email to Barron's the head of the SIPC cast doubt on the idea that it would insure checking or savings accounts.

"SIPC protects cash that is deposited with a brokerage firm for one limited purpose...the purpose of purchasing securities," wrote Stephen P. Harbeck, the president and CEO of SIPC. "Cash deposited for other reasons would not be protected."

As quoted from this Barron's article [barrons.com].

CNBC article [cnbc.com] with SIPC CEO saying more of the same
"Brokerage firms often offer accounts for customers to hold cash until it can be invested in securities, but those accounts aren't meant to be strictly for savings, Harbeck said. Money sitting in such accounts but not intended to buy securities may not be covered by the SIPC"

Just got Barrons newsletter with some of the same details as mentioned above: https://www.barrons.com/articles/...1544723146


From CNN: SIPC does not protect this [cnn.com]

The Securities Investor Protection Corporation, a Washington-based nonprofit organization that protects investors from losses at member brokerage firms, said Friday that the new Robinhood products would not be protected.

"SIPC protects cash that is deposited with a brokerage firm for one limited purpose ... the purpose of purchasing securities," said Stephen P. Harbeck, president and CEO of SIPC, in a statement to CNN Business.

"Cash deposited for other reasons would not be protected. SIPC does not protect checking and savings accounts since the money has not been deposited for a protected purpose," Harbeck added

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12-13-2018 at 07:29 AM
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#4
This is very interesting.

There are a few online banks that offer %1.85 interest.

3% is basically unheard of (without having 100k in the bank / invested)

This seems like a great deal for anyone with money siting in a big name bank!!
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#5
With a name like "Robin Hood" you have to be careful....lol
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#6
Quote :
Robinhood Checking and Savings is an added feature to existing Robinhood accounts and is not a separate account or a bank account.
So as part of a brokerage account this clearly will NEVER be FDIC insured... so if this company goes under, they take your money with it... I'll stick with my insured 2% bank TYVM...
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#7
Wonder if it's limited with deposit or interest like some others.
Some money market accounts have 2% depending on balance, like capital one 360 and HSBC which I saw on top of SD home page
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#8
Quote from ChillO8033
:
damn I reserved the wrong color card
Which one?
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#9
Edit: Maybe stick to Ally/other online banks until this gets resolved:

https://www.bloomberg.com/news/ar...ew-product

At the same time there is the theory that major financial websites/TV channels are purposely trying to take down this product because of their relationships with the big banks.




Wow that's incredible considering I thought the way they made money (since they do free stock trading) was to keep the interest on uninvested cash balances in brokerage accounts. It also says in the fine print of their YouTube promo that there's no foreign transaction fees, which is cool for a checking account. You mostly see that on credit cards. My hope is that this encourages other online banks to up their game so I dont have to switch banks!

https://www.youtube.com/watch?tim...48SglGrpEg
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Last edited by ArseneWenger December 14, 2018 at 09:53 AM.

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#10
39,619....wow there is a big line. This is gonna take a while.
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#11
Quote from ArseneWenger
:
Wow that's incredible considering I thought the way they made money (since they do free stock trading) was to keep the interest on uninvested cash balances in brokerage accounts. It also says in the fine print of their YouTube promo that there's no foreign transaction fees, which is cool for a checking account. You mostly see that on credit cards. My hope is that this encourages other online banks to up their game so I dont have to switch banks!

https://www.youtube.com/watch?tim...48SglGrpEg
Do they have margin account?
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Last edited by leno December 14, 2018 at 06:23 AM.
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#12
If your wondering if robinhood is a safe app to use it absolutely is. It is regulated by the SEC and guarantees funds of up to 250k. It currently has no trading commission fees which is why its the best.Aug 29, 2017

(from google search)

How does Robinhood make their money?
Robinhood generates revenue from its margin trading service, Robinhood Gold, which starts at $6 a month. Robinhood also receives interest income from customer cash and stocks, much like a bank collects interest on cash deposits, and it receives rebates from executing brokers.
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Last edited by likeaw December 13, 2018 at 08:03 AM.
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#13
Quote from likeaw
:
Which one?
I got the green but I wanted the murica

edit- nvm problem solved

If you've changed your mind about what type of card you'd like, no problem! You'll be able to change this after you've moved off the waitlist. Once you're ready to go, we'll ask you to confirm that you'd still like the card and which color you'd like it in.
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#14
These accounts claim they are SIPC insured up to $250K cash. That seems just as good as FDIC in these circumstances. While SIPC doesn't protect the value of your securities themselves, it does protect you from the investment firm itself collapsing (in this case Robinhood) and loss of any cash held by them, and as you own your securities and not RH if they did collapse you should still continue to be able to sell them etc.
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#15
# 49,215 in the queue .. Frown
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