Robinhood shut down its checking and savings accounts in March 2021
Robinhood, the investment app, stopped offering checking and savings accounts to customers in March 2021. The company had launched these accounts in late 2018 as a way to compete with traditional banks, but discontinued the service after regulatory pressure and customer complaints about how the accounts were insured.
If you had money in a Robinhood checking or savings account when they closed it, your funds were not lost. Robinhood moved customer balances to partner banks and gave account holders time to withdraw their money or transfer it elsewhere. The company sent notifications to affected customers before the shutdown date.
The main issue that led to the closure was confusion over deposit insurance. Robinhood's accounts were held at multiple banks behind the scenes, which meant deposits were supposed to be insured separately at each bank under FDIC rules. Customers thought their money was insured as one account, which would have capped protection at $250,000. Regulators and customers pushed back, and Robinhood decided to exit the banking business rather than restructure how the accounts worked.
Key Takeaways
- Robinhood closed all checking and savings accounts in March 2021 and moved customer money to partner banks.
- Your deposits were protected during the transition because Robinhood coordinated with partner banks to hold your balance.
- You had to move your money out of the Robinhood account or it would sit at a partner bank earning little to no interest.
- Robinhood still operates as an investment brokerage and does not offer deposit accounts anymore.
What happened to money in Robinhood checking accounts
When Robinhood announced the closure, the company gave customers a deadline to withdraw their funds or authorize a transfer. Money that remained in the account after that date was moved to a partner bank — usually Sutton Bank or another institution Robinhood had worked with — where it sat in a holding account.
If you did not take action by the deadline, your money did not disappear, but it was no longer earning any interest and you could not access it through the Robinhood app. You would have had to contact the partner bank directly or reach out to Robinhood customer service to retrieve it. Some customers reported delays in getting their money back because the process required manual intervention.
The FDIC insured deposits at each partner bank up to $250,000 per depositor, per bank. This meant that if Robinhood had held your money at two different banks, each bank's portion was separately insured. However, the way Robinhood presented the accounts to customers made this structure unclear, which contributed to the regulatory complaints.
How to learn about you had a Robinhood checking account
If you used Robinhood between late 2018 and early 2021, you may have opened a checking or savings account through the app. These accounts were optional — many Robinhood users only had investment accounts and never opened a deposit account.
To check whether you had one, look at your old Robinhood statements or emails from that period. Robinhood sent notifications when the checking product launched and again when it was being shut down. If you received an email about account closure or fund transfer in early 2021, you had one of these accounts.
If you still have a Robinhood account and want to know whether any money is sitting in a closed checking account, contact Robinhood support directly through the app or website. They can tell you whether funds are still held at a partner bank and how to retrieve them. This is especially important if you opened the account years ago and forgot about it.
What to do if your money is still stuck at a partner bank
If you did not move your money out before the deadline and it has been sitting at a partner bank for months or years, you can still retrieve it. Contact Robinhood customer service and ask them to help you access the funds. Provide your account number and the email address associated with your Robinhood account.
Robinhood should be able to tell you which partner bank is holding your money and provide you with contact information for that bank. You may need to provide identification to the bank to prove you own the account. The process can take a few days to a week depending on how the partner bank handles dormant accounts.
If Robinhood is no longer responsive or you cannot reach them, contact the partner bank directly. If you know which bank it is, you can search for their customer service number online and explain that you have funds in a Robinhood transfer account. The bank should have records of the transfer and can help you claim the money.
Why Robinhood stopped offering checking accounts
Robinhood's checking and savings accounts were marketed as a way to give investors a place to park cash and earn interest. The company offered features like no minimum balance and no monthly fees, which appealed to younger investors who were already using Robinhood to trade stocks.
The regulatory issue centered on how the accounts were insured. Robinhood used a system called sweep technology, which automatically moved customer deposits across multiple partner banks to spread the FDIC insurance coverage. In theory, this meant a customer could have more than $250,000 insured. However, the way Robinhood explained this to customers was unclear, and regulators worried that customers did not understand the real limits of their protection.
After the SEC and other regulators raised concerns, Robinhood decided it was not worth the effort to restructure the accounts or improve the disclosures. The company chose to shut down the checking and savings business entirely and focus on its core investment platform. This decision also came during a period when Robinhood faced criticism over trading halts and other operational issues.
Robinhood's current banking options
Today, Robinhood operates only as an investment brokerage. You can open a brokerage account to buy and sell stocks, options, cryptocurrencies, and other investments, but you cannot open a checking or savings account.
If you want to keep cash in Robinhood, you can hold it in your brokerage account as cash or money market funds. Cash held in a brokerage account is typically insured by SIPC (Securities Investor Protection Corporation) up to $500,000, which is different from FDIC insurance. Money market funds are not insured the same way, but they are considered low-risk investments.
For a checking account, you would need to open one at a traditional bank or online bank. Many online banks offer checking accounts with no fees and competitive interest rates on savings. If you were using Robinhood's checking account for everyday banking, switching to a dedicated bank account is the better option.
Frequently Asked Questions
Can I still open a Robinhood checking account?
No. Robinhood closed its checking and savings account product in March 2021 and does not offer these accounts anymore. You can only open a brokerage account with Robinhood to invest in stocks and other securities.
What if I never withdrew my money from Robinhood checking?
Your money should still be at the partner bank where Robinhood transferred it. Contact Robinhood support with your account details and ask which bank is holding your funds. The bank can help you retrieve the money, though you may need to provide identification.
Was my money insured when Robinhood closed the accounts?
Yes. FDIC insurance covered deposits at each partner bank up to $250,000. Robinhood coordinated the transfer to ensure your money was protected during the shutdown. However, the way the insurance worked was more complex than a typical bank account, which is part of why Robinhood decided to exit the business.
Did Robinhood charge a fee to close the checking account?
No. Robinhood did not charge customers to close the accounts or transfer their money. However, if your money sat at a partner bank after the deadline, you may have lost interest earnings or faced other costs depending on the bank's policies.
Can I get interest on cash in my Robinhood brokerage account?
Robinhood offers money market funds that pay interest, but cash held as cash in your brokerage account typically does not earn interest. If you want to earn interest on money you are not investing, you should open a savings account at a bank instead.