I'll move my ~$100K emergency fund into there just to get free money. And move it out somewhere else when the rates change. Over the years I've moved accounts between Dollar Savings, Emigrant, Orange, Ally, and probably 2 or 3 others...

Would you really move your emergency funds into a less secure more likely problematic service though?

I would have to read up on the transfer times. If it's reasonably standard (2-3 days) and doesn't have any daily limits, then yes. It's a US company, FINRA approved, SIPC insured, so the risk is minimal.

SIPC says they don't think they have to insure this.

Not to make you feel bad, but at $150k/year salary (average in SV) one should be able to save $100k within 5 years, with little impact on quality of life.

It wasn't meant to be. I'm in my early 40's. I just saved and invested a bit each year.

They may be playing this on two sides: the more obvious one which is acquiring customers to feed their trading business, and simply trying to evolve into a financial institution, which should bolster their valuation in their inevitable IPO in 2019 or 2020. Their backers might be content to burn money for a year or so to get a larger multiplier at some point in the future.

They might be able to actually make a profit off the float in this case, too

Or maybe they're going to be able to sell people's transaction histories...

> Right, but that incentive is only substantial if you’re going to park a lot of money there,

You are assuming that customers make this decision rationally; marketing very often leverages the fact that humans very often don't do that.