Robinhood just announced one of the juiciest checking and savings rate offers available.
On Thursday, the popular stock-trading app announced its “Robinhood Checking & Savings” services, which offer accounts with no fees and a 3 percent interest rate.
The new service, offered through Sutton Bank, will grant users on-the-go access to accounts with a Mastercard debit card.
High interest rates and no fees
Customers will earn 3 percent annually on both the checking and savings accounts, with interest paid out daily. Robinhood notes the interest will add up to “an extra $240 a year for the average American household with $8,000 in the bank.”
The 3 percent interest rate tops current rates offered on other savings products. The national average for savings and money market accounts this week was 0.10 percent and 0.21 percent, respectively, according to Bankrate.com at the time of Robinhood’s announcement.
Robinhood Checking & Savings also offers a number of fee-free services, including: overdrafts, foreign transactions and card replacement. There is no minimum balance required to open an account.
Customers will have access to over 75,000 fee ATMS, for free, in places like Target, Walgreens and 7-Eleven. The Robinhood app includes an ATM map to help customers find the nearest one.
Robinhood doesn’t have any brick-and-mortar locations, but customers have 24/7 live chat support through the app.
The new banking service will launch in 2019, but Robinhood is already offering customers early access sign-up.
Robinhood taking on big banks
Robinhood has been seeking to disrupt the financial industry since its launch in 2013. To date, the company has built a customer base of more than 6 million through its commission-free investing platform.
The fintech startup joins a list of others venturing into the banking space — including Acorns, Chime and SoFi — offering services ranging from debit cards to checking accounts.
The lure of free banking services seems to be growing due to missteps by big-name banks, including charging hidden fees.
Last week, a newly public report from 2017 by the Consumer Financial Protection Bureau revealed that colleges in marketing agreements with banks were charging student account holders as much as triple the average account fee. The fees were described as “legally dubious” in the report.
“Currently, traditional checking and savings accounts cost more for people who make less, are riddled with unfair and hidden fees, and earn you minimal returns on your savings,” reads Robinhood’s blog post on the new services. “We believe you should earn more on your money, and shouldn’t be charged fees to access it.”
Cash in Robinhood is insured up to $250,000 by the Securities Investor Protection Corporation (SIPC), according to the company.