Robinhood is evolving into a comprehensive financial service platform. Recently, the company unveiled its upcoming online banking service, which will provide checking and savings accounts exclusively for Robinhood Gold subscribers, set to launch this fall.
The new banking platform, named Robinhood Banking, will enable users to manage their accounts and facilitate money transfers through the Robinhood Credit Card app. To compensate for the absence of physical branches, it offers the convenience of having cash delivered directly to your home. However, operational details remain limited, with Robinhood stating that availability will depend on geographic location.
Robinhood Banking promises an impressive 4 percent annual percentage yield (APY) and FDIC insurance coverage of up to $2.5 million on accounts. Although Robinhood is not an FDIC-insured bank, it offers “pass-through” insurance through FDIC member Coastal Community Bank. This means funds are insured by being held at an FDIC-insured institution via a third party, as explained by the FDIC.
The service will provide options for individual and joint bank accounts, along with the ability to create accounts for children. Deepak Rao, the general manager and vice president of Robinhood Money, emphasizes that the platform aims to address the challenges posed by traditional banks.
In addition to banking services, Robinhood is set to launch a new wealth management platform known as Robinhood Strategies. This platform will offer users a diverse selection of single stocks and exchange-traded funds (ETFs), actively managed to enhance investment opportunities. Robinhood Strategies will feature a 0.25 percent annual management fee, capped at $250 per year for Robinhood Gold members.
Currently available to Robinhood Gold members, Robinhood Strategies will be accessible to all customers next month. The Robinhood Gold program costs $5 per month or $50 annually, providing members with benefits like margin investing and larger instant deposits.
Later this year, Robinhood plans to introduce an AI-driven investment tool named Cortex for Gold subscribers. This tool will analyze market trends and provide insights on stock performance, helping users understand market movements and investment opportunities.
Over time, Robinhood has transformed from a basic investing app into an all-in-one financial hub, recently launching a credit card in 2024 as part of its strategy to encourage users to manage their finances within the expanding Robinhood ecosystem, where they can store and withdraw cash for investments directly via the app.
