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This is massive news. Banks are going to have to decide whether they want to raise their rates to compete, or face bleeding customers. The best part is that t

• abhiminator 8y ago
  >Banks are going to have to decide whether they want to raise their rates to compete, or face bleeding customers. I'm sure the big boy banks are here stay. Most of them are in the category of, "too big to fail" (as the crisis a decade ago highlighted) and upstarts like Robinhood are but a blip-in-the-radar than a real threat to the established players, imo.
  • talltimtom 8y ago
    To big to fail doesn’t really protect them if they lose their costumers. A bank with tons of customers that’s bleeding cash due to a market crash is salvageable(and remember the investment in bailing them out payed off), a bank that’s bleeding cash because it doesn’t have any customers is not salvageable and no longer “big”, so it will fail.
    • dunpeal 8y ago
      > To big to fail doesn’t really protect them if they lose their costumers. In fact, if they lose their customers they will no longer be "too big to fail".
  • bduerst 8y ago
    Yeah, there aren't many small players since everything consolidated in the early 2000s. RH likely won't sustain this interest rate, and it's more akin to a temporary promotional play to acquire new traders.
  • hbosch 8y ago
    Also consumer checking accounts aren’t really that important to bigger banks or even bigger credit unions. Banks own a large portion of property that doesn’t fall into a checking account. For instance if you own a home and pay a mortgage to Wells Fargo, they control a far greater amount of your wealth than whoever you bank with. Also, business banking and loans in general will never be something that happens on an Robinhood. At least not in this generation. These types of entities require a man in a suit in an office.
• pcdoodle 8y ago
  Hell yeah!
• kevstev 8y ago
  Eh lets not overstate it too much- this isn't the first time it has happened, paypal and a few other "internet banks" back in the early-mid 2000s was offering 5% interest rates when big banks weren't offering much. The big banks are as strong as ever. Generally, you really shouldn't be keeping much in a bank anyway, invest most of your money, even if only in ultra safe bonds.
  • a13n 8y ago
    Why would you lock your money up for years in a bond at a lower yield than you can now get with Robinhood?
    • kevstev 8y ago
      You can sell bounds, they can be fairly liquid, and the yields are higher, with a locked in rate for that time. Personally I am a bit concerned about the safety of keeping money at RH as well after their big F up last week. The real point though was that IMHO aside from your emergency money, you should really have as little in cash as possible. My other callout was that high interest rates didn't appear to steal any significant business from big banks in the past.