SIPC Says It Has Serious Concerns About Robinhood's New Product

Re:SIPC Says It Has Serious Concerns About Robinhood's New P... by panarky on Friday December 14, 2018 @11:57AM (#18682287)

Robinhood's offering is indistinguishable from a cash management account at a brokerage. Short-term deposits, check writing, debit card, interest bearing, etc.

Fidelity Investments pioneered this product, and now it's available from others like Schwab.

But at Fidelity, the cash management account is distinct from the brokerage account. While the brokerage account is insured by the SIPC, cash management funds are swept into FDIC-insured balances at actual banks.

Looks like Robinhood is gonna lose on this one.

Source: https://www.fidelity.com/cash-management/faqs-cash-managemen...

[ Parent | on HN ]

Re:SIPC Says It Has Serious Concerns About Robinhood's New P... by acjohnson55 on Friday December 14, 2018 @12:17PM (#18682494)

It seems like RH is taking this to the next step (at least with respect to Fidelity) by building typical checking account features around it, with parameters that are best-in-class.

[ Parent | on HN ]

Re:SIPC Says It Has Serious Concerns About Robinhood's New P... by SpaethCo on Friday December 14, 2018 @04:24PM (#18684926)

Fidelity already has best-in-class checking account features?

The CMA account has mobile image deposit, free online bill pay, check writing (with free checks), free ACH transfers, free wire transfers, ATM/debit card (with ATM fee reimbursement at any ATM worldwide, no less), etc.

The only “best-in-class” factor that Robinhood has presented is setting the interest at 3%.

[ Parent | on HN ]

Re:SIPC Says It Has Serious Concerns About Robinhood's New P... by acjohnson55 on Friday December 14, 2018 @07:50PM (#18686289)

Good to know, I was reading briefly from their site and didn't see any of those things expressed upfront.

[ Parent | on HN ]