Best CD & MM Rates Thread 2018 Archive

[teej1985]

Robin Hood has 3% checking and savings accounts.. https://checking.robinhood.com/ If you want to use my link, I move higher on the waiting list. https://share.robinhood.com/cs-kvvgcgX8bm8KUzFrqGewzm

 

[tulak]

Robin Hood has 3% checking and savings accounts.. https://checking.robinhood.com/ If you want to use my link, I move higher on the waiting list. https://share.robinhood.com/cs-kvvgcgX8bm8KUzFrqGewzm

Thanks for sharing!

Since I already have a RobinHood account, I signed up. It looks like there’s a wait though.

I can’t tell if there’s a cap on the 3% earnings.

All I found was:

Users of Robinhood Checking and Savings earn 3% interest annually on each of their Checking and Savings balances. Robinhood does not charge account maintenance, account minimum, overdraft, ATM, transaction, foreign transaction, transfer, or card replacement fees for Robinhood Checking and Savings.

If there really are no fees, then this could be a good back-up card for international ATM withdrawals.

 

[teej1985]

It has to be some sort of loss leader. I hope they can keep it going for a while. I did not see anything about a cap.

 

[tulak]

Best CD & MM Rates Thread 2018 - 2019 - Please Post Updates Here

It seems like all of RHs businesses are loss leaders. I’m really clueless on how they make money.

I use them for options trading and whenever I mention the no commissions, etc, to friends, they are sure they’re making their money on spreads. But the research I did on that months ago seemed to imply that they are not.

 

[tulak]

From the RH blog, they mention the 3% is for money "in both Checking & Savings and interest compounds daily and is paid out daily."

More details can be found here: https://support.robinhood.com/hc/en-us/categories/360000099323-Checking-Savings

What is interesting is that the money is SIPC insured, not FDIC. I'm not sure how I feel about that.

 

[jazz4cash]

That’s about as close to TGTBT as it gets. It’ll be interesting to hear how it plays out at RH.

 

[jim584672]

The SIPC site says cash is...

"How is my cash protected:

SIPC protects cash in a brokerage firm account from the sale of or for the purchase of securities. Cash held in connection with a commodities trade is not protected by SIPC. Money market mutual funds, often thought of as cash, are protected as securities by SIPC. SIPC protects cash held by the broker for customers in connection with the customers’ purchase or sale of securities whether the cash is in U.S. dollars or denominated in non-U.S. dollar currency."


The key phrase to me seems to be that the cash must be in connection with the purchase or sale of securities. So just putting cash into the account, without the intent to buy or sell securities, would not be protected. Maybe I am wrong and someone can chime in.

 

[audreyh1]

From the RH blog, they mention the 3% is for money "in both Checking & Savings and interest compounds daily and is paid out daily."

More details can be found here: https://support.robinhood.com/hc/en-us/categories/360000099323-Checking-Savings

What is interesting is that the money is SIPC insured, not FDIC. I'm not sure how I feel about that.

It’s not a bank or credit union, it’s a brokerage. Seems like using terms like checking and savings will confuse the customer. Is that intentional?

 

[almost there]

Run Forest........Run

 

[teej1985]

According to this article, it's a cash management account - Fidelity has one of those and I belive USAA as well. Aren't they linked to FDIC insured banks? https://www.marketwatch.com/story/r...uld-consumers-hand-over-their-cash-2018-12-13

 

[jim584672]

According to this article, it's a cash management account - Fidelity has one of those and I belive USAA as well. Aren't they linked to FDIC insured banks? https://www.marketwatch.com/story/r...uld-consumers-hand-over-their-cash-2018-12-13

It looks like it is just SIPC on their web site.

 

[teej1985]

It looks like it is just SIPC on their web site.

Interesting. Here's Schwab's article that describes SIPC insurance. https://www.schwabmoneywise.com/public/moneywise/essentials/understanding_fdic_and_sipc_insurance I don't know if the extra bps is worth going with this over say Vanguard Treasury Money market Fund which is at 2.25% with no state taxes.

 

[tulak]

It’s not a bank or credit union, it’s a brokerage. Seems like using terms like checking and savings will confuse the customer. Is that intentional?

I agree, it is confusing. I tend to think this is marketing: hey, we offer a checking/savings account, come bank with us!

I’m also curious to know what’s the difference between an RH checking and savings account?

If the checking account offers the same interest as a savings account, why do you need a savings account?

As for the checking account, it’s really a brokerage account with cash management features. That’s not unique to RH.

What is interesting is that the cash portion is insured by SIPC and what was posted above implies that cash is fully insured, so the downside risk should be minimal. Plus, you’re not dealing with MM fund that could theoretically break the buck.

Personally, I’m going to try it out with a smaller amount and see how well it works. I’m already using their platform for trading options, so it’s easy enough for me to try this out too.

 

[jazz4cash]

According to this article, it's a cash management account - Fidelity has one of those and I belive USAA as well. Aren't they linked to FDIC insured banks? https://www.marketwatch.com/story/r...uld-consumers-hand-over-their-cash-2018-12-13

I think that’s kind of the point. Fido calls it cash management not checking or savings and they have Choice of FDIC or non-FDIC accounts for holding cash.

 

[Debinnov a]

I'm setting up an account and it wants me to log into my regular bank account through their site to fund the new RH account. Is that safe? And I'm 296,000+ in line for the 3% checking/savings. Is it even worth the effort? Lol

 

[njhowie]

I'm setting up an account and it wants me to log into my regular bank account through their site to fund the new RH account. Is that safe? And I'm 296,000+ in line for the 3% checking/savings. Is it even worth the effort? Lol

You can choose not to do that - I don't do that for systems that provide that option, and didn't when I created my RH account about 6 weeks ago.

You can skip that step, and then once the account is set up, you can log in and set up the external bank link as you do on most other sites. When you set up the external bank link, they send the small trial deposits which you have to verify. So, doing it that way takes a few days longer than if you use the login procedure. However, I had security concerns similar to you, so didn't care that it took a few days longer.

They must have a ton of interest in the new checking/savings account. When I signed up earlier today I was in the 184,000s

 

[teej1985]

I'm setting up an account and it wants me to log into my regular bank account through their site to fund the new RH account. Is that safe? And I'm 296,000+ in line for the 3% checking/savings. Is it even worth the effort? Lol

Haha, they must have had a lot of signups today. I was 26,000 when I signed up this morning.

 

[Spock]

https://www.barrons.com/articles/ro...nterest-rate-to-take-on-the-banks-51544723146

“SIPC protects cash that is deposited with a brokerage firm for one limited purpose...the purpose of purchasing securities,” wrote Stephen P. Harbeck, the president and CEO of SIPC. “Cash deposited for other reasons would not be protected.”

Where Robinhood makes its money:

https://www.zerohedge.com/news/2018-10-16/robinhood-said-get-40-revenue-hft-firms-citadel

Robinhood app sells user customer data to make a quick buck from the high-frequency trading (HFT) firms on Wall Street," that is what we wrote last month, in one of the first articles that expressed concern over the popular Robinhood investing app for millennials, which has shady ties to HFT firms and undermines its image of an anti-Wall Street ethos. Almost a month after our report, Bloomberg has now confirmed that more than 40% of Robinhood's revenues earlier this year were derived from selling its customers' orders to firms, like Citadel Securities and Two Sigma Securities.

 

[audreyh1]

Wow - that's pretty shocking!

 

[Rianne]

You can choose not to do that - I don't do that for systems that provide that option, and didn't when I created my RH account about 6 weeks ago.

You can skip that step, and then once the account is set up, you can log in and set up the external bank link as you do on most other sites. When you set up the external bank link, they send the small trial deposits which you have to verify. So, doing it that way takes a few days longer than if you use the login procedure. However, I had security concerns similar to you, so didn't care that it took a few days longer.

They must have a ton of interest in the new checking/savings account. When I signed up earlier today I was in the 184,000s

As Bob Brinker would say, "shark attack."

 

[Gotadimple]

Just to change the subject.

Today American Express Savings is paying 2.0% (up from 1.95% last month) on their savings account. That's only 100 basis points away from the Robin Hood brokerage, and you don't have to wait behind 100,000 other people to open an account. Also FDIC insured up to $250k (just a snarky comment here).

 

[tulak]

I’ll add that VMMXX is at 2.34%.

 

[TDub]

So much for that Robin Hood deal. Some things are too good to be true.

https://www.cnbc.com/amp/2018/12/15...-account-plan-after-widespread-criticism.html

 

[Free bird]

And the search continues for the elusive free lunch. If its free its me.

 

[jazz4cash]

Hmm.... sounds familiar.....

That’s about as close to TGTBT as it gets. It’ll be interesting to hear how it plays out at RH.