This morning, I received a notification from my Robinhood account that they are introducing checking and savings accounts on their platform at 3% interest, with no minimums or fees. I immediately signed up for early access (and I’m not being paid a single penny to promote this, it’s simply awesome). You can read more about the features here.
What’s incredible about this is the fact that the next best rate for a savings account is maybe 2.10%? And even then, there are usually $10K minimum balances and withdrawal limitations. A 3% interest rate with no restrictions or fees is pretty much unheard of. For context, as of the time of this writing, the 10 yr US treasury yield is 2.91%, and the 20 yr treasury is 3.05%. Instead of investing in a treasury and being subject to interest rate & inflation risk, you can simply park your cash in a checking account, which basically eliminates those risks and is insured up to $250K by the FDIC (in other words, insured by the US government). Even if you don’t invest or trade, taking advantage of Robinhood’s new banking seems like a no-brainer.
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