Forbes.com's "In A Bold Asset Grab, Robinhood Offers 3% Interest On Checking And Savings Accounts" says, "More financial technology startups are wading into a crowded, stodgy business: checking accounts. Last spring, personal finance app Acorns and lending startup SoFi announced new debit cards. 'Neobank' Chime has been offering free online checking accounts since 2014, and it has 2.3 million users today. Now Robinhood is crashing the party, offering 3% interest on both checking and savings accounts. That's the highest rate on the market. It dwarfs the national average of 0.10% for savings accounts, and it's well above the second-highest rate of 2.25% offered by BBVA, according to Bankrate.com." The piece adds, "Founded in 2013, Robinhood has built a base of more than 6 million users by providing commission-free stock and cryptocurrency trades.... Across Robinhood's six million accounts, Forbes estimates its customers' assets are in the tens of billions of dollars (the company declined to comment on total assets). Why is Robinhood expanding into checking accounts? The main reason seems to be to seize market share. As competition for digital-first deposit accounts heats up, and as JPMorgan Chase walks further onto Robinhood's turf by offering free stock trades, Robinhood wants to hoard more customers for their long-term value, even if it loses money in the short term. Co-CEO Baiju Bhatt says Robinhood aims 'to make it so that customers don't need to go anywhere else for financial services.' To help fund the sky-high 3% rate, Bhatt says the startup will invest customers' deposits into other securities like Treasurys. But short-term Treasury yields are well below 3%, so Robinhood will initially take a loss on that spread. It will make up for some of that difference on the interchange fees (charged to merchants) it will collect when someone uses a Robinhood debit card to make a purchase. But the program likely won’t be profitable in the short term." See also, the misguided Bloomberg Opinion piece, "Robinhood's 3% Interest Checking Is Just a Money-Market Fund."

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