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A comment on Robinhood launches 3% checking account. Parent comment

Re:Robinhood launches 3% checking account by danans on Thursday December 13, 2018 @10:59AM (#18673246)
Apparently, SIPC doesn't provide blanket coverage[1].

So no coverage against, i.e. fire, flood, robbery or embezzlement [2]. The first 3 may not be relevant with digital bank that doesn't handle cash, but the last one might be.

EDIT: I misread the second reference. apparently FDIC does not insure against theft or embezzlement, but according to the first link FDIC does provide blanket coverage unlike SPIC. it's still not clear to me what blanket coverage means in this instance.

[1] https://www.schwabmoneywise.com/public/moneywise/essentials/...

[2] https://www.fdic.gov/consumers/consumer/information/fdiciorn...

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Re:Robinhood launches 3% checking account by russell_h on Thursday December 13, 2018 @12:41PM (#18674274)
My understanding (which is limited, so someone please jump in if I'm wrong) is that SIPC does not protect against a decline in value of your assets.

I'm wondering:

First, whether Robin Hood is lending out deposits to margin traders. If not, what are they doing with the money? I don't think that they are, as the article implies, making > 3% on US treasuries.

Second, if that investment loses money, are those losses passed on to account holders? If not, someone must be insuring that investment. Who?

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Re:Robinhood launches 3% checking account by danans on Thursday December 13, 2018 @04:05PM (#18676107)
> SIPC does not protect against a decline in value of your assets.

Neither does FDIC, right? Still doesn't explain what FDIC "blanket" coverage offers that SPIC doesnt

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Re:Robinhood launches 3% checking account by Someone1234 on Thursday December 13, 2018 @11:16AM (#18673436)
Where did you get the "So no coverage against, i.e. fire, flood, robbery or embezzlement" claim from? It isn't in [1] or [2] and contradicts this:

https://www.fool.com/investing/brokerage/2014/05/11/what-sip...

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Re:Robinhood launches 3% checking account by intopieces on Thursday December 13, 2018 @10:54PM (#18678343)
From your link:

>SIPC does not protect customer funds placed with a broker-dealer just to earn interest.

In this case, doesn't that mean the people who just use Robinhood has a checking / savings account aren't covered?

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