Robinhood Markets, Inc., operators of stock trading and cryptocurrency trading apps, will now furnish its users with regular checking and saving accounts. The company announced the latest feature in a blog post published on its website, on Thursday, Dec. 13.
The statement read:
“Since 2015, we’ve focused on making the financial system work for everyone by offering commission-free investing in stocks, ETFs, options, and cryptocurrencies. Today, we’re furthering our mission to democratize America’s financial system by introducing Robinhood Checking & Savings.”
Robinhood which is known for its zero-commission services stated that the accounts will also not attract any fee for the user. “You shouldn’t be charged fees to access, save, and invest your own money.” Robinhood wrote, explaining that they believe customers should earn more on their money, and shouldn’t be charged fees to access it.
Features of Robinhood Checking and Savings Accounts
Besides a commission-free service, the company posted highlighted a few interesting features of its accounts. The firm promised a 3 percent interest for deposits users make to the savings and checking accounts. The accounts also come with personalized debit cards which can be used to access ATM around the United States. The accounts are linked with the Robinhood app which can be used to access services including bill payments.
Disrupting Conventional Baking
Robinhood says it is seeking to disrupt the way and manner banking services get to customers. Its 3 percent interest stacks up nicely against traditional checking and savings accounts which offer gives 0.09 percent bar fees.
“Currently, traditional checking and savings accounts cost more for people who make less, are riddled with unfair and hidden fees, and earn you minimal returns on your savings. We believe you should earn more on your money, and shouldn’t be charged fees to access it.”
Robinhood Banking Charter
As Smartereum reported in June, Robinhood was said to be making moves towards offering banking services at the time. Anonymous sources, speaking to Bloomberg revealed that the financial firm was meeting with officials of the Office of the Comptroller of the Currency (OCC) to obtain necessary licenses for a national banking charter. There are no indications that that permit has been granted. Robinhood has worked out a way to provide users with checking and savings account within the limits of its current license.
The lack of a banking license may still limit the extent of its accounts. The firm, through its broker-dealer license and membership of the Securities Investor Protection Corporation, cannot protect cash accounts of more than $250,000. Unlike conventional banks which have a certain freedom to invest deposits, Robinhood will be restricted to safe assets.
For what it lacks in this area, Robinhood makes up for in innovation. Information on its website explains that it uses technology to cut the fat that makes other financial institutions costly then pass the savings on to the user in the form of no-commission trading and no-fee checking and savings. In May, the company raised $363 million to expand its products with a focus on its crypto trading platform.