Robinhood is Changing it's 3% Checking/Saving Service - Here's Why EXCERPT: Robinhood will rename and revamp its upcoming checking and banking features after encountering problems with its insurance. The company published a blog post this evening explaining “We plan to work closely with regulators as we prepare to launch our cash management program, and we’re revamping our marketing materials, including the name . . . Stay tuned for updates.” Robinhood’s new high-interest, zero-fee checking and savings feature seemed too good to be true. Users’ money wasn’t slated to fully protected. The CEO of the Securities Investor Protection Corporation, a nonprofit membership corporation that insures stock brokerages, tells TechCrunch its insurance would not apply to checking and savings accounts the way Robinhood originally claimed. “Robinhood would be buying securities for its account and sharing a portion of the proceeds with their customers, and that’s not what we cover,” says SIPC CEO Stephen Harbeck. “I’ve never seen a single document on this. I haven’t been consulted on this.” That info directly conflicts with comments from Robinhood’s comms team, which told me yesterday users would be protected because the SIPC insures brokerages and the checking/savings feature is offered via Robinhood’s brokerage that is a member of the SIPC. If Robinhood checking and savings is indeed ineligible for insurance coverage from the SIPC, and since it doesn’t qualify for FDIC protection like a standard bank, users’ funds would have been at risk. Robinhood co-CEO Baiju Bhatt told me that “Robinhood invests users’ checking and savings money into government-grade assets like U.S. treasuries and we collect yield from those assets and pay that back to customers in the form of 3 percent interest.” But Harbeck tells me that means users would effectively be loaning Robinhood their money, and the SIPC doesn’t cover loans. If a market downturn caused the values of those securities to decline and Robinhood couldn’t cover the losses, the SIPC wouldn’t necessarily help users get their money back. SOURCE: https://techcrunch.com/2018/12/14/robinhood-insurance-sipc/ ✔FREE STOCK HERE: http://share.robinhood.com/philipm72 ✔Earn Money To Be Healthy: http://sweatcoinapp.uk/i/phil180108 ✔Betterment: https://www.betterment.com/invite/philipmagliulo ✔Invest In Cryptocurrency: https://www.binance.com/?ref=27529551 Mr Modern Financials is a premier channel discussing and creating content on: Investing, Entrepreneurship, Digital Marketing, and much more! DISCLAIMER: This is not investment advice and is for entertainment or educational purposes only. I am not responsible for any profits or loses made through investing. Subscribe if ... https://www.youtube.com/watch?v=gHh9Yjhfpk8

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