Last Thursday, Robinhood announced that they were going to start offering a checking and savings account that had no fees and offered 3% interest.  Things have pivoted and Robinhood’s Checking and Savings is now Cash Management. 

I wrote about it last week because I thought it was an amazing deal.  I read a couple of articles and checked out the website.  Everything seemed like a great, no-brainer deal.  I signed up and encouraged everyone else to do it as well.

Well, it turns out that Robinhood might have bitten off more than it could chew before it launched the service.  I’m glad that none of my, my friends, or my readers got to the point where they gave the company.  

I don’t think anything underhanded happened, I think they were just excited about the service and maybe didn’t have all the clearance they needed to launch the service the way there were intending.  The CEO has since released a letter.  They are pivoting from calling it a checking and savings account to a “money management account.”  I just wish they would provide more details about what that will be.  

As it turns out, since Robinhood was a brokerage account, they didn’t have the right types of insurance to cover a typical banking account.  The SEC actually stepped in pretty quickly and stopped what could have been a big problem.  Read more about what happened in the link above

The Future of Robinhood

I mentioned earlier that I don’t think Robinhood had malice behind what they did or what went down. 

I’m definitely not going to pull out my money from the stock brokerage account I have with them that’s for sure.  I will be careful about what they announce going forward, and I think they will too.  

I’m not going to withdraw my name from the “Cash management account,” but I’m not going to throw all my money into the account either.  I’m going to go with a wait and see approach.  

I would like more information now about the new account to see if anything have changed, but I’d imagine they are going over everything with the SEC to make sure it is on the Up-and-Up. 

If you’re still interested or want to trade stocks for free, please still sign-up.  I think we need more companies like this that are willing to shake up the money market.