Yesterday we posted about a new offer from Betterment offering a promotional rate of 2.69% on the savings account they offer. Hours after the launch Financial Industry Regulatory Authority (FINRA) contacted Betterment seeking clarity about the new offering, this is despite Betterment being in contact with both FINRA and the Securities and Exchange Commission (SEC) in the month leading up to the launch. It’s not clear what questions the FINRA was asking and if any last minute changes were made to the Betterment account that they were unhappy with.
At least Betterment talked to regulators before the launch of the product, unlike competitor Robinhood who promised SIPC insurance despite never contacting SIPC over a proposed 3% APY account (which Robinhood plans to relaunch).
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Betterment is showing me 2.44% now.. So much for the 2.69%. Short lived
Yup...same
FINRA is just giving Betterment free publicity with this.
There's been lots of fintechs partnering with banks and creating these kinds of accounts which send the funds off to FDIC banks. I wouldn't be shocked if regulators crack down on them, but I don't see why Betterment is different than the competition.
The novelty with the Robinhood idea was to NOT send the money to FDIC banks and invest it themselves in safe investments, all-the-while claiming SIPC-guaranteed insurance against any sort of loss which no other fund has (not even a safe money market fund).
FIRA or FINRA? FIRA is named 3 times in the article
They've added an N for no apparent reason
FINRA is the correct legal name, FIRA is a typo
Whats the source on this?
"hat tip to CNBC"
> Hat tip to CNBC via DDG