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Written by Cari Scribner on August 20, 2023
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What Happens If Robinhood Goes Out Of Business?

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 your free 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.

Learn More: Robinhood Retirement 3% Match

Robinhood is a popular "all-in-one" investing app.

While they are most well-known for their commission free stock trading, they've recently shaken up the Retirement Investing World too.

Introducing Robinhood Retirement; home of the biggest IRA match on the market.

Robinhood IRA Boost

Here's what you need to know:

  • Robinhood offers 2 types of retirement accounts - the Roth IRA and Traditional IRA
  • All Robinhood investors will get a 1% Match on what they Contribute or Transfer
  • Robinhood Gold members will get a 3% Match - the biggest on the market

And don't worry, this comes with a Portfolio Builder Tool. You don't have to construct your investment portfolio from scratch if you don't want to.

Lastly, you'll even get a free stock worth up to $200 when you open a new Robinhood account using our link.

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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!

Article written by Cari Scribner

Read more

Power Your Investing

Choosing the right product and service is essential for your investing. Here are some of the tools and services to help your portfolio grow.
Robinhood
Robinhood provides an easy-to-use free trading platform for beginner investors. Robinhood has $0 account minimums. Get a free stock when you open an account below.
Try Robinhood
M1 Finance
M1 Finance offers a free investing platform where users can build portfolios of stocks and ETFs. Users can also choose from a variety of pre-built portfolios offered for free.
Try M1 Finance
Fundrise
Passively invest in private real estate deals with as little as $10. Fundrise allows you to own residential and commercial real estate across the U.S. starting at a 1% annual fee.
Try Fundrise
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Get 1 Free Stock Worth Up To $200 From Robinhood!

Don't Miss This Opportunity!

Investing Simple readers can claim a free stock from Robinhood worth up to $200 when they open a brokerage account and deposit any amount.

For US Residents only. Investing Simple is affiliated with Robinhood, and we may earn a commission when you sign up for Robinhood.

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