Robinhood's whole business model is making money from people who think they're getting a free lunch. You're still paying money for the trade. But instead of paying a direct fee, you're paying more money via the bid-ask spread.
Everytime you make a trade, Robinhood sells that trade to a market maker. Robin hood charges more money for forwarding this trade than most other brokers. To make up for this increased cost to market makers, they then pass the cost to you by charging more money for the trade.
This is akin to restaurants that claim you get free delivery. You don't really get free delivery. They just increased the price of the food.
Looks like they were trying to play a similar game with that 3% savings account by claiming your money was risk-free when it really wasn't.
Everytime you make a trade, Robinhood sells that trade to a market maker. Robin hood charges more money for forwarding this trade than most other brokers. To make up for this increased cost to market makers, they then pass the cost to you by charging more money for the trade.
This is akin to restaurants that claim you get free delivery. You don't really get free delivery. They just increased the price of the food.
Looks like they were trying to play a similar game with that 3% savings account by claiming your money was risk-free when it really wasn't.
https://www.wsj.com/articles/why-free-trading-on-robinhood-i...