Robinhood offered savings accounts with a 3% interest rate, but soon deleted all references to the product

On Thursday, Fintech-start-up Robinhood, which developed the same-name mobile application for trading securities and cryptocurrencies, announced the launch of an analogue of bank settlement / savings accounts with a 3% interest rate linked to them by debit card and no restrictions on monthly balances. Nevertheless, after a day of mention of the product on the official website and on social networks have been removed, according to Bloomberg .

Initially, Robinhood stressed that operations with a debit card will not be subject to a commission, and the company intends to receive profits by investing customer deposits in low-risk assets, such as US government bonds. At the same time, it was assumed that the deposit insurance would be handled by Securities Investor Protection Corp. (SIPC), which specializes in brokerage accounts, since the brokerage division of the Robinhood had to provide new services.

Nevertheless, the SIPC said that the Fintech startup did not contact them at all on the issue of insuring new accounts. SIPC President Stephen Harbeck questioned that the new product met the necessary requirements for his organization to insure potential loss of customers. He even contacted the US Securities and Exchange Commission (SEC) to make sure he was right.

“We only protect brokerage accounts that are used to buy securities. It is not necessary to invest in opening a current / savings account in Robinhood, so we cannot insure such accounts , ”explained Harbek.

After leading financial media outlets, such as Bloomberg and CNBC, reported bewilderment to SIPC and questioned the product concept, Robinhood removed any mention of savings accounts and soon published a short message.

A letter from our founders about yesterday's announcement. https://t.co/c0Bn5Hm439

– Robinhood (@RobinhoodApp) December 15, 2018

Robinhood co-founder Baiju Butt

“We understand that there has been some confusion. Our activities and public communications are carefully regulated, as we are a licensed broker-dealer. We intend to work closely with regulators to launch our asset management system and we will review the content of marketing materials, ”the company said in a statement.

Recall that Bitcoin support in the Robinhood mobile app appeared in February and in just one month its client base grew by 800 thousand people.

In May, it became known that Robinhood successfully closed a round of funding for the Series D, which was led by investment firm DST Global. Then the startup capitalization reached $ 5.6 billion.

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