Robinhood cancels plan to offer no-fee banking after SIPC denies it planned to insure accounts
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Just a couple of days ago, we told you that commission-free trading app Robinhood was adding free no-fee banking and checking to its offerings. The company said it would pay 3% annual interest compared to the .8% that most banks pay out these days. In addition, there would be no minimum-deposit, access to free ATMs across the country, and a free debit card. Robinhood said that the accounts were going to be insured by the SIPC rather than the FDIC. The former is the insurance company that protects the cash and securities in brokerage accounts.
"We’re excited and humbled by the response to yesterday’s announcement of Robinhood’s cash management program launching in 2019. However, we realize the announcement may have caused some confusion.
As a licensed broker-dealer, we’re highly regulated and take clear communication very seriously. We plan to work closely with regulators as we prepare to launch our cash management program, and we’re revamping our marketing materials, including the name.
Our promise is unwavering—we always put our customers first—whether it’s deciding which features to build, keeping your cash and securities protected, or offering products that allow everyone to participate in and benefit from the financial system.
Stay tuned for updates."– Baiju Bhatt, Vlad Tenev, Co-Founders and Co-CEOs, Robinhood
As a licensed broker-dealer, we’re highly regulated and take clear communication very seriously. We plan to work closely with regulators as we prepare to launch our cash management program, and we’re revamping our marketing materials, including the name.
Our promise is unwavering—we always put our customers first—whether it’s deciding which features to build, keeping your cash and securities protected, or offering products that allow everyone to participate in and benefit from the financial system.
Stay tuned for updates."– Baiju Bhatt, Vlad Tenev, Co-Founders and Co-CEOs, Robinhood
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