Robinhood is taking on Bank of America, Citigroup, and JPMorgan
Robinhood (HOOD) is going after the big banks and their ATMs for deposits.
The trading platform turned quasi-bank and wealth manager unveiled two new products that will compete for business with America's largest legacy banks, including JPMorgan (JPM), Citigroup (C), and Bank of America (BAC).
Robinhood Banking will provide access to traditional checking and savings accounts with an annual percentage yield of 4%, provided one is a member of the platform's Gold service. FDIC insurance is on offer from Robinhood's tie-up with Coastal Community Bank.
Read more: 10 best high-yield online checking accounts for March 2025 (up to 7.00% APY)
Furthermore, the company is promising to deliver "cash to your door" through an app similar to Uber's (UBER) if you are a banking customer.
Robinhood co-founder and CEO Vlad Tenev told Yahoo Finance that the company wants to be a one-stop destination for people to manage their wealth (see video above).
He added that there is demand for home cash delivery as people try to avoid various ATM crimes, "especially in San Francisco." Instead, a person's cash will show up at their house in a large nondescript envelope, Tenev said.
Tenev didn't rule out exploring a bank charter down the line. The company originally explored the idea of one in 2019 but deemed it too costly.
Robinhood Strategies will serve as a wealth management service with a 0.25% annual fee, capped at $250, for its premium Gold subscribers. Users with as little as $50 can access portfolios with exchange-traded funds (ETFs) managed by the company's investment experts, or what it calls a "private banker." For a $500 minimum, investors will unlock access to individual stocks in the portfolios.
Read more: Robinhood Gold Credit Card review: 3% cash back for investors
Tenev and Robinhood have continued their breakneck pace of new products from last year.
Earlier this month, the company debuted a prediction markets hub in its app. The contracts allow users to wager on everything from what the fed funds rate could be in May to NCAA tournament games.
In October 2024, the company launched event contracts for the presidential election. Customers of the platform were able to trade on "who will win the 2024 presidential election."
The platform provider also debuted futures and index options trading.
And it has since released Robinhood Legend, billed as a sleeker platform that targets more sophisticated traders.
Robinhood Legend allows users to open up to eight charts in a single window, and it could elevate various technical indicators such as Bollinger Bands.
Watch: How TD Ameritrade's former CEO sees AI impacting trading
Tenev said he isn't worried that Robinhood won't be able to shake its meme stock image. But he did acknowledge the company has work to do to make its new services successful.
"We believe, investors under-appreciate Robinhood's broader financial/money platform, beyond its core focus on active traders," Bernstein analyst and Robinhood bull Gautam Chhugani wrote. "Robinhood is also leaning into disruptive technologies to bring down the cost of financial access, which has historically been only available to only the elite (high net-worth thresholds) within banking."
Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
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