Robinhood Crypto Trading App Launches Checking And Savings Account Services To US Customers
Robinhood is primarily known for the crypto trading platform and the stock trading service that it offers. They boast a “fee-free, commitment-free, and surprise-free” experience that many companies could adapt to their own use. However, in an effort to continue with their impressive innovation, the company has decided to provide a new service to their US-based consumers – the option to get a checking and/or savings account. Based on reports from the company, there’s going to be a 3% interest payment assessed to them whenever they make a deposit to either kind of account.
On the company blog, the team writes,
“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.”
The rumors started flying about Robinhood’s intent to launch banking services back in June, when their customer base already included six million accounts. Bloomberg referenced anonymous sources back then, saying that the platform had been working to offer services through discussions with the US Office of the Comptroller of the Currency (OCC). Presently, even with the announcement by Robinhood in the most recent blog post, they still haven’t received official permission to operate as a bank. Instead of waiting on that approval, they have modified the accounts to work with the licenses that they presently have in place.
According to Robinhood news, new accounts for customers will also allow them access to a linked debit card, which is compatible with over 75,000 ATMs. Falling in line with their “fee free” protocols, there are no fees for withdrawing funds with this debit card. If the user isn’t sure about nearby compatible ATMs, they can turn to the Robinhood app to find one.
Right now, the license in place allows Robinhood to act as a broker-dealer for these accounts, and their membership with the Securities Investor Protection Corporation gives them protection for accounts up to $250,000. Unfortunately, they are limited by the investments they can offer right now, but they will be able to offer investments in US Treasury bonds and other safe assets.
With all of the progress that Robinhood has made in both cryptocurrency and the stock market, they can add their banking services now as well, exclusively for US customers. Similar services are presently being offered by a digital banking alternative in the UK called Revolut.
CEO and founder Nikolay Storonsky commented,
“Our vision is simple: one app with tens of millions of users, where you can manage every aspect of your financial life with the best value and technology.”