In this Forbes op-ed Ron Shelvin shares his thoughts on how the Robinhood checking account was doomed to fail; besides the fact that the account wasn’t insured by the SIPC, the company would have never been able to turn a profit on the new offering; most banks are offering around 1.5% or lower which would have resulted in losses for the company due to declining interchange rates, reward costs, delivery and support costs, and marketing costs; Shevlin also shares his thoughts on changing consumer behavior where the checking account is simply a temporary holding place for money or “paycheck motels” as he calls them; these funds are quickly allocated to other investments, HSA accounts, and saving tools. Source
