Robinhood 3% Savings/Checking account?!

Robinhood announced this week they will be offering a savings and checking account with a 3% interest rate in early 2019. If you are familiar with the current bond rates, that is an insane number. Signing up for email updates displayed this screen:

Confirmation after I signed up for the email list on Robinhood.
Confirmation after I signed up for the email list on Robinhood.

However this was short lived as they took down the page today. From what Yahoo is reporting, the Securities Investor Protection Corporation (SIPC) was not aware of this and their insurance is only meant to cover accounts that are used for the intention of investing in securities and not for general checking and savings accounts. I will be curious to see what ends up happening and if they will pull the plug. Apparently their trading service also had a major outage today.

If this does happen, using their savings account for an emergency fund might be a great option. But it doesn’t seem like they have done enough preparation before the announcement, so who knows what is going to happen. If it does go through, I will definitely consider putting our emergency fund into this account when we get to that stage. It is a lot less risky than investing the money, would provide quick access to the funds and would grow a significant amount.

In any case, it still is worth getting on their email list for this service if you haven’t already. You can use my share link and it will bump me up on their priority list.

Update (12/18/18): They posted a blog entry addressing some of the controversy. No clear direction yet, but it is good they didn’t try to ignore response.

Have you heard about this? Do you think this is a good emergency fund option?

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Floyd McGregor
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Floyd McGregor

Hey Chris, great page. I will check l follow the link. I currently use an online bank with checking/savings that hads a 1% interest rate called Aspiration.com

Thanks
Floyd McGregor