ROBINHOOD STRIKES BACK - THEIR RESPONSE!

Robinhood responds back with a new Cash Management Account - here’s what they offer, and my thoughts whether or not it’s a good deal to invest in - enjoy! Add me on Instagram: GPStephan

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Robinhood strikes back, unveiling a new Cash Management Account paying a 2.05% interest rate.

Here’s how Cash Management works: It pools your money together, and then “Sweeps” it across other, affiliate banks which then have FDIC insurance. This means you can have one centralized location where you can view your money, even though - technically - it’s split between several partners.

In this case, Robinhood is partnering with Goldman Sachs, HSBC, Wells Fargo, Citibank, Bank of Baroda, and US Bank….that could potentially give you up to $1,250,000 worth of FDIC insurance, all at a 2.05% interest rate.

Now, besides the 2.05% interest paid on up to $1,250,000…they’ll also give you access to a debit card, linked to your Robinhood account, issued by Sutton Bank. According to Robinhood, they’ll offer access to 75,000 free ATM’s, all without foreign transaction fees, no maintenance fees, and no account minimums…

All things considered…this seems really good, and I’ve already signed up to join their waitlist because I want some of that 2.05% interest. And if you were wondering how they compared to other brokerages and banks out there….it’s decent. Not the best, not the worst… but decent.

For example, right now - the best return on a bank account comes from Vio Bank, paying 2.42% interest on your money.

You also have MySavingsDirect, offering 2.1% interest with absolutely no fees or minimums…

Or, you have Wealthfront Cash Management which is a 2.07% return - FDIC insured up to $1 million dollars - again, with no fees or minimums:

And then of course you have other, similar banks like CIT Bank…Citi Bank…

And, obviously…then you have Robinhood.

In my opinion, what they’re offering right now is good - It’s high enough to get your attention, without being UNBELIEVABLY high…and it’s competitive enough against other brokerages offering $0 trades, without being obnoxiously so. And I think this is a REALLY smart move on Robinhoods behalf to do this NOW, at a time where they really need it the most.

I really hope, in the future, that they can continue expanding their banking services - OR - perhaps give some trading incentives to people who open up a cash management account with them. OR - Maybe one day they begin offering low interest rate loans one day. And I REALLY hope they can eventually expand and improve their customer service, which is where I truly feel their overall platform is lacking…

As for me, I’ve already signed up for their cash management account and I’m like 80,000 on the list - but given all of this information, I’m going to give it a shot and put some money in to see what happens. I tested this out previously with Wealthfront and was incredibly happy with using their service in conjunction with Ally Bank…so, I’ll give Robinhood a shot, too, so I can report back and see how it goes.

For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness@gmail.com