New Bank on the Block: Robinhood introduces banking with 3% interest
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. Big Brother has your back on this one.). Even if you don’t invest or trade, taking advantage of Robinhood’s new banking seems like a no-brainer.
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