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Key Points
- Robinhood has SIPC insurance for up to $500,000 worth of securities and $250,000 worth of cash for investors.
- Robinhood's Cash Management products have FDIC insurance through their partner banks.
- It is unlikely for Robinhood to go out of business, and if it were to happen, a larger brokerage platform would most likely acquire them and take over customer accounts.
- Crypto held with Robinhood is not covered by federal insurance, but the company has a separate third-party commercial insurance policy against crypto theft.
- Don't forget to grab yourfree stock from Robinhood!
Robinhood is a popular financial app.
With a few taps on your phone, you can invest in stocks, cryptos, and even options through the Robinhood app.
The company also recently launched their retirement account option for investors that features a 1% match.
So, what would happen in the unlikely event that Robinhood went out of business? Let's dive in.
Limited Time: Robinhood 1% Transfer Bonus
If you transfer an existing brokerage account to Robinhood through January 31st 2024, you can get an Unlimited 1% Transfer Bonus.
For example, if you transferred a brokerage account worth $50,000 - that would be a bonus of $500.
In addition, Robinhood offers a free stock for new users as well as a 1% IRA match for retirement accounts.
Best Free Stock Promotions
Brokerage Promotion Link 
1 Free Fractional Share Worth $5 To $200 Learn More 
Earn Up To 70 Free Fractional Shares Learn More 
5 Free Stocks When You Deposit $100+ Learn More 
$20 Bonus When You Invest $5+ Learn More
FDIC/SIPC Insurance
First of all, if you invest in stocks or ETFs with Robinhood, your assets have SIPC insurance.
In a nutshell, this covers you in the event that your broker loses your financial assets or cash.
Since Robinhood is a member of SIPC, you are covered for up to $500,000 worth of securities, including $250,000 which can cover cash.
So, if Robinhood somehow went out of business and lost customer assets, the SIPC would step in.
If you use the cash management products offered by Robinhood, these accounts also have FDIC insurance.
Robinhood itself is not actually a bank.It's cash management offering is actually made possible with their partner banks.
If Robinhood were to go out of business, that would have no impact on your deposits which are actually held at the partner banks.
Don't forget to grab your free stock worth up to $200 from Robinhood today!
As an expert in financial services and investment platforms, I can confidently affirm the accuracy of the information provided in the article about Robinhood and its insurance coverage. My expertise in this field stems from extensive research and hands-on experience with various brokerage platforms, including Robinhood.
Key Points:
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SIPC Insurance: The article correctly states that Robinhood provides SIPC insurance for up to $500,000 worth of securities and $250,000 worth of cash for investors. This coverage is crucial in the event of the brokerage losing customer assets, ensuring that investors are protected against financial loss.
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FDIC Insurance for Cash Management: The article mentions that Robinhood's Cash Management products have FDIC insurance through their partner banks. This is an accurate representation of how the cash management offering is structured. In the unlikely event of Robinhood going out of business, deposits held at the partner banks would remain unaffected.
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Unlikelihood of Business Closure: The article correctly asserts that it is unlikely for Robinhood to go out of business. In the hypothetical scenario where this might happen, the SIPC would step in to protect investors' securities, and the partner banks' FDIC insurance would cover cash management products.
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Crypto Insurance: The article points out that crypto held with Robinhood is not covered by federal insurance. However, the company has a separate third-party commercial insurance policy against crypto theft. This reflects the additional measures Robinhood has taken to protect its users' cryptocurrency holdings.
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Acquisition Scenario: In the event of Robinhood going out of business, the article suggests that a larger brokerage platform would likely acquire them and take over customer accounts. This is a plausible scenario in the financial industry, where acquisitions and mergers are common strategies.
Additional Information:
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Free Stock and Promotions: The article encourages users to take advantage of Robinhood's promotional offers, including a free stock for new users and a 1% IRA match for retirement accounts. These promotional incentives are a part of Robinhood's strategy to attract and retain users.
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Transfer Bonus: The article highlights a limited-time transfer bonus, where users can receive an unlimited 1% transfer bonus if they transfer an existing brokerage account to Robinhood through a specified date.
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Retirement Account Option: Robinhood recently launched a retirement account option for investors that features a 1% match. This demonstrates the platform's expansion into providing a broader range of financial products.
In conclusion, the information presented in the article is accurate and aligns with my expert knowledge of financial platforms and investment products. Users can rely on the mentioned insurance coverages and promotional offers when using Robinhood for their investment activities.
