Robinhood Expands Services With Checking, Savings Accounts For Gold Subscribers

Robinhood, a prominent crypto trading platform, is expanding its financial services to cater to a broader range of retail investors. The company is set to introduce checking and savings accounts later this year for its paying “Gold” subscribers, marking its entry into the banking sector. This move is part of Robinhood's strategy to offer a more personalized, private-banking-like experience, differentiating itself from traditional banks.

Deepak Rao, vice president and general manager of Robinhood Money, highlighted the company's intention to provide high interest rates and unique features typically associated with private banking, such as estate planning and tax advice. Customers will also have the convenience of requesting cash to be delivered directly to their homes on the same day.

While Robinhood is venturing into banking, it is not an FDIC-insured bank. Instead, it will partner with Coastal Community Bank to provide Federal Deposit Insurance Corporation (FDIC) protection on customer deposits.

This expansion into banking aligns with Robinhood’s broader ambition to become a “one-stop-shop” for consumers’ financial needs, integrating investing, banking, retirement, and other financial products under one brand. CEO Vlad Tenev articulated this vision during the company’s investor day in December, and since then, Robinhood has also introduced sports-event contracts, further diversifying its offerings.

In addition to its banking expansion, Robinhood is rolling out a tailored wealth-management service. This service will cap fees for Gold subscribers at $250 per year, granting them access to both individual stocks and exchange-traded funds (ETFs), while minimizing taxable gains.

Steph Guild, president of Robinhood Asset Management, emphasized the company’s commitment to creating a hybrid model that combines the benefits of human advisors and robo-advisors. “We thought we’d take the best of those models and create something that doesn’t exist today,” Guild stated.

To further enhance its wealth-management services, Robinhood plans to launch an artificial intelligence tool named Robinhood Cortex. This feature will provide investors with advanced analysis and insights to help optimize their investment portfolios.

Robinhood's expansion into wealth management and AI-driven insights is a strategic move to attract a wider range of retail investors. By offering a comprehensive suite of financial services, including banking, investing, and wealth management, Robinhood aims to provide a seamless and personalized financial experience for its users. This move is likely to intensify competition in the financial services industry, as traditional banks and other fintech companies may need to innovate to keep up with Robinhood's offerings.