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The company announced that it was changing its plans and considering labelling the new product "cash management accounts" instead of checking and savings. This comes after SIPC (a member organization that protects consumers when a brokerage shuts down) stated they would not insure the funds. No plans have been publicly stated to partner with an FDIC insured bank.
The accounts were not going to be bank accounts, nor insured by the Federal Deposit Insurance Corp., facts you had to dig around on the website to learn. Robinhood was not going to begin accepting funds for the new accounts until January but had started a waiting list. It said people who get their friends to sign up can move up on the list and also get “a free stock,” but it wasn’t clear what stock they would get. The SEC and FDIC declined to comment. Robinhood did not return requests for comment, but on Friday, it published a blog post acknowledging that the announcement “may have caused some confusion.”
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