Opening a Robinhood savings account? It may not be insured
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by Business Solution
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22nd December 2018
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New York (CNN Business)Robinhood, the extremely popular investing app, revealed brand-new monitoring and cost savings accounts Thursday that have no charges, access to 75,000 totally free ATMs and– here’s the kicker– a rates of interest that makes 3% for customers who put cash in the item.
But there might be a huge issue with Robinhood’s offerings: They might not be guaranteed.
The Securities Investor Protection Corporation, a Washington-based not-for-profit company that secures financiers from losses at member brokerage companies, stated Friday that the brand-new Robinhood items would not be safeguarded.
In a
declaration on its site, Robinhood stated: “As a certified broker-dealer, we’re extremely controlled and take clear interaction really seriously. We prepare to work carefully with regulators as we prepare to release our money management program, and we’re revamping our marketing products, consisting of the name.”
Robinhood has actually made waves in the monetary services market, triggering numerous huge banks and brokerage companies to begin making lower-cost accounts offered to Millennials. Vlad Tenev, the business’s co-founder,
composed in an article in October that Robinhood now has more than 6 million consumers.
But Robinhood is not signed up as a bank. Any deposits that clients make with the business would not be safeguarded with the Federal Deposit Insurance Corporation either.
Robinhood is providing the monitoring and cost savings consumers a debit card, however it remains in collaboration with Ohio-based Sutton Bank.
According to the
assistance center area of Robinhood’s website , the business states that it is not a bank and it is providing its monitoring and cost savings account through a brokerage account. That appears to be why Robinhood believes it’s qualified for SIPC security.
