Once designed as an entry step into the world of investing, Robinhood has added additional services to become closer to an all-in-one banking app. One of their first steps in this process was adding the Robinhood checking account. Unfortunately, though, potential issues with regulators and insurance led to the checking account service transforming into a cash management one. To better understand if this new service is for you, check out our review below.
The Robinhood cash management service is similar to but differs from the original concept of the Robinhood checking account. While their cash management service contains many of the features of a traditional checking account, Robinhood is not a bank. Their bread and butter is investing. To have a cash management account with them, you’ll first need to open an investment account.
Even though Robinhood isn’t technically a bank, they do offer the same FDIC insurance that other financial institutions offer. This keeps your money secure even during periods of tumultuous economic uncertainty. The lack of insurance is what doomed Robinhood’s initial attempt at a checking account. Though the insurance issue has been resolved, the account is still considered a cash management service.
With a Robinhood cash management account, you can receive a physical or virtual debit card. Sutton bank backs the debit card, which helps provide additional assurances to the vendor accepting it. If you prefer a virtual card, you’ll have the ability to pair it with your Apple Pay, Google Pay, or Samsung Pay account.
Like the original concept of the Robinhood checking account, the cash management service offers a bevy of benefits to consumers:
- Zero monthly maintenance fees
- No minimum balances
- Competitive interest rates
- No foreign transaction fees
- Access to over 75,000 fee-free ATMs
- No inactive account fees
- No debit card fees
If you’re planning on using their investment services, this makes the Robinhood cash management account especially attractive to those with checking accounts that charge maintenance fees. Robinhood can offer competitive interest rates due to the way they hold your money. They don’t hold your money but instead transfer it to one of five banks to try to get you the best interest rate available.
As the cash management account is different than a traditional checking account, those looking for the latter may end up disappointed by some of the restrictions with the former. For instance, the only way to fund your cash management account is through an online transfer or direct deposit. That is, you can’t deposit cash or checks into your Robinhood cash management account.
Furthermore, while this account gives you access to an array of fee-free ATMs, Robinhood does not offer any reimbursement for ATM fees charged by out-of-network ATMs. They state they don’t profit from these fees, as they are assessed by the ATM, but the lack of reimbursement is a disappointment for those who’ve spent years practicing a care-free ATM mentality.
It should also be noted that the Robinhood app has suffered some recent outages that have left customers unable to access their cash. Any bank has occasional issues with their app but the rash of outages in a short period is concerning.
Finally, Robinhood’s customer service is limited to email. There’s no chat function or phone number to call. They do have a Twitter account designed for customer support issues, but response times can vary.
The Robinhood cash management account isn’t available to everyone. There is a waitlist you must join before opening the account, and the waitlist is only accessible to those already with a Robinhood investment account. This means the ideal Robinhood cash management account user is someone with an interest in investing, as well as someone who doesn’t need to regularly deposit cash or checks.Finding the right bank account can be an intimidating experience. However, with the help of the reviews and guides at BankingMash, you can easily find the ideal accounts for your needs. Check it out today!