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Well guys just yesterday robin hood officially announced their cash management product is coming out to market a lot of you guys probably received an email around this product and what we got to talk about in today’s video is not just about the product but we got to talk about is this product safe if you put in your hard earned money into your robin hood account
And the money’s in this cash management account is your money even safe so that’s what we’re gonna discuss in today’s video along with what this product is okay now robin hood’s been in the news a lot over the past week okay but last week it was in the news for indirect reasons alright if you didn’t know last week charles schwab td ameritrade all these different
Guys a lot of these different brokerage firms also in last week cut commission’s on stock trades to $0 and so robin hood was naturally in the news last week indirectly because of this why because robin hood’s been the one that’s changed the game for commissions and first stock trading because they’ve always had a model where essentially you buy a stock or you sell
A stock and you pay $0 on that and it’s massively different than all the other brokerage firms that i’m showing you here all those other guys they’ve always historically charged between five and yeah i mean some of them could go all the way up to $20 every time you buy or sell a stock so robin hood’s definitely an app in just a service in general that’s trying to
Come in and disrupt industries and if you’re looking at this cash management product it’s definitely another product that robin hood is trying to come in with and disrupt another industry okay which is the banking system and so robin hood’s looking at this and they’re thinking what if we could be not only the place where people come to place stock trades or stock
Investments i should say but what if we’re also the place where people have their their main bank account and where they’re actually like like doing things as far as debit cards and they’re actually trying to get savings money and things like that so robin hood’s trying to expand in trying to differentiate themselves versus all the other online brokerages out there
Especially now if everybody has zero dollar you know trades okay what makes you different now at that point in time okay now only reason i’m pretty much talking about this to here today as far as the robin hood at cash management products because there’s so many people in my discord chat we’re asking me you know my opinion on it and things like that okay so if we
Look here this is from robin hoods they say we believe our financial system should work for you and do more for your money to help get us there we announced plans in december to launch a product now we covered that on the channel when they are talking about a 3% interest saving account and at that time there was a lot of confusion around this product i mean there
Was people thinking oh it was it was 3% was the money even guaranteed it turns out they didn’t have the insurances they were probably supposed to have for product like that and it was marketed in a way that wasn’t really too good let’s put it that way for what robin hood added at that time and so that’s why they ended up just you know kind of he’s taking a step
Back and saying you know what and they even talked about it here and i give respect to robin hood app for for mentioning that they made a mistake there they say we made mistakes with that announcement which led us to hit the reset button and start over from scratch which is essentially exactly what they did and respect to robin hood for doing that okay they say
Today we’re excited to announce cash management a new feature to give you more flexibility with your money invest spend and earn interest with a competitive annual percentage yield in all through your brokerage account join the waitlist today and get early access sign up when we launch okay so if you’re if you’re gonna even try to join this product right now right
You there’s a couple things to keep in mind one is you’re not gonna get the 3% they had talked about or at least it doesn’t look like you can get the 3% they talked about back in december when they announced the product and all those sorts of things okay so 3% highly unlikely and we’ll look at the percent they’re talking about here in just a moment but also you
Can’t just join the products here-today okay you get on a waitlist which i know i just showed you guys some of those pictures from some of the folks in my discord i mean this individual was you know number twelve thousand four hundred and fifty four out of a hundred fifty four thousand this person was seventy six thousand eight hundred fifteen out of one hundred
And fifty eight thousand so if you sign up for the product it’s not like all sudden you’re getting that product tomorrow or something like that okay so here we go with cash management you’re on invested cash is moved to program banks that pay you 2.0 5% per year as of october 8 2019 so right there you know not the 3% that they were talking about before but after
The same time interest rates a lot you know around the world that pretty much come down since that time so you know i don’t think it’s necessarily robin hood saying hey you’re getting a less you know percent but just the fact that interest rates have fallen since then it’s kind of natural because interest rates kind of dictate where savings account rates go and
Things like that okay so uninvested cash is money you have in your brokerage account that you plan to invest but haven’t yet invested or spent so that’s like your cash balance essentially that’s in your brokerage account so if you have you know let’s say five hundred dollars in your you know robin hood app right now but it’s not in a stock it’s just like in the
Cash portion and you have this cash management system set up basically that money you would earn interest money on so that is pretty darn cool you know in itself because i usually keep at least some level of cash in like my brokerage account and i don’t make any percent on it okay so if you make 2% on whatever money’s in there that’s definitely a pretty freakin
Cool thing and we’ll talk about if that money is even safe in just a moment okay interest is paid every month on every penny okay so that’s very interesting interest is going to be paid every month but still at the end of the day you’re gonna get around 2% on your money per year it sounds like but it’s still cool that the interest is paid every single month rather
Than on a three-month basis like most you know savings accounts do a lot of them do you know they basically will pay you out your savings on a three month basis rather than every month basis so that is definitely cool keep in mind like any variable rate it may go up or down over time at the bank’s discretion due to factors including market conditions and that’s
Definitely accurate i mean if you think about it if interest rates start to go up that would be a good thing for savings account rates okay sometimes you know a lot of people worry about could it hurt the economy but if interest rates were to go up likely you would probably start making more money on your money and maybe if interest rates actually start to go up
You could get closer to a 3% yield right now the feds talking more about maybe lowering interest rates more or something like that so if the fed was to lower interest rates even lower there’s a good chance you could actually get less and two percent on your money if the fed was to do that okay so that’s kind of the good thing and bad thing with the fed if they
Raise interest rates hey you make a lot more money in your savings accounts but sometimes it can slow down the economy which is bad so it’s like a trade out there on the flip side if they keep lowering interest rates maybe the economy can do a little better but at the same time you don’t make anything on your money so you know that it is what it is but hey 2% as
Of right now and that’s what it is and so the next question we got to ask ourselves is is your money safe okay is it safe if you have you know it doesn’t matter what amount of money you have right you care about it whether you have a thousand dollars on this cash management side or whether you have ten thousand dollars a hundred thousand dollars you know a small
Amount of money big about money is that money safe at the end of the day very very important and it looks like it is okay fdic insurance your uninvested cash at these program banks is eligible for fdic insurance up to 1.25 million dollars or up to two hundred and fifty thousand dollars per bank so that is very very good news there now it’s hard to see like like you
Know if your money in two different banks or one bank but just know that’s okay your money is fdic insured at least up to 250 thousand dollars okay and 97 percent of you guys are gonna have you know less than two hundred and fifty thousand dollars ninety seven percent of you watching this video will have less and you know a quarter million just cash in your robin
Hood account so which means essentially if you’re worried about robin hood going down or something like that which we just did a video last week on the you know scott galloway saying that you know a robin hood was a service that you know could lose eighty four seven plus of their value or completely disappear when you hear things like that it definitely could make
You worried like robin hood could they go bankrupt what happens to my money if robin hood goes bankrupt like what happens what if i have you know what if you’re in a situation where you’re like you got you know your majority of your savings money in robin hood not just through you know stocks but maybe you have like $10,000 in cash when you have it in there and
You’re like dude what if robin hood went out of business and my is my money even is even safe yes it looks like it isn’t sure by the fdic which is basically backed by the us government of up to 250,000 dollars so if something happened to robin hood he made a lot of financial mistakes they couldn’t get backing they literally went out of business you should still
Get your money up to two hundred and fifty thousand dollars now if they spread it around a bunch of different banks you could get up to 1.25 million for my two to three percent you guys watch this video that have way too much money it looks like you could be insured up to a certain amount but i think it’s i think it’s better to if you have a lot of money you know
Put that money individually in different banks rather than just through this because you don’t really know like what banks it in and things like that so it is insured to up to 250 k from most you guys out there and so that is definitely good news and then you know a lot of other folks are going to ask you know if i’m usually this is like my main debit card like
Like can i you know pull out money out of atms and it looks like they’re gonna have a network of over 75,000 in network atms and it doesn’t look like you’re gonna have to pay a fee at those particular atms so to recap here it’s a good product okay it looks like a very good product the cash management product it looks like they’re doing it right this time okay looks
Like you’re gonna earn 2% plus on your money which is you know it is what it is i mean that’s actually a pretty good rate in today’s environment with interest rates being so low like 2% in your money is 2% on your money so that’s definitely a good thing especially if it’s money that’s just sitting in your account anyways like why not have it and earning interest
So it’s a it’s a good product from that perspective fdic insured up to at least 250 k so that is very good news and so if i’m looking at this product and then it’s the the ease of use if you’re especially if you’re someone that buys a lot of stocks or sells a lot of stocks it’s definitely a product that you know i’m looking at it and it looks like a very very good
Product we’ll see how they rolled out what not i would imagine robin hood will do a good job like this they’ve always done a good job with the online brokerage with you know no fees and whatnot so i imagine they’ll do a pretty good job with this and so what if i look at this it looks like a good product and it looks like a safe product when you have fdic insurance
It’s the same exact insurance that you should get from you know a big bank like a wells fargo if you had a savings account with them or you know a bank of america or something like that so when you ever you have the same insurance that some of those big guys have that’s always definitely a very very good thing so robin hood app cash management gets two thumbs up
From me well i personally use it probably not because i don’t even use robin hood as like my main brokerage account and for me to swap seven different accounts over to robin hood would be quite a pain needless to say but i could potentially sign up for the cash management product just to use it as like a savings account we do have an ally savings account which i
Think pays us two point one five percent of two point zero five may be the same exact rate that robin hood does right now so you know it’s possibility that you know if i could end up getting more from my money through robin hood app then i what i get from ally for savings money i could potentially sign up for that you know robin hood cash management and use it
Just as like a savings account or something like that guys so hope you enjoyed this is always make sure you smash the thumbs up button let me know if you have any questions down there in that comment section as always in myself i’ll get back to you or you know the other robin hood folks out here that i’m imagine a lot of you guys actually use robin hood you guys
Should get back to people in the comments as well and help individuals out all right thank you for watching and have a great day
Transcribed from video
Is Robinhood Cash Management SAFE?! ROBINHOOD APP REVIEW By Financial Education
