Banks are going to have to decide whether they want to raise their rates to compete, or face bleeding customers.
The best part is that the money comes from merchants and credit card companies, and is being returned to consumers.
Robinhood truly is living up to their name: stealing from the rich and giving to the poor.
I'm sure the big boy banks are here stay. Most of them are in the category of, "too big to fail" (as the crisis a decade ago highlighted) and upstarts like Robinhood are but a blip-in-the-radar than a real threat to the established players, imo.
In fact, if they lose their customers they will no longer be "too big to fail".
RH likely won't sustain this interest rate, and it's more akin to a temporary promotional play to acquire new traders.
Also, business banking and loans in general will never be something that happens on an Robinhood. At least not in this generation. These types of entities require a man in a suit in an office.
Generally, you really shouldn't be keeping much in a bank anyway, invest most of your money, even if only in ultra safe bonds.
The real point though was that IMHO aside from your emergency money, you should really have as little in cash as possible. My other callout was that high interest rates didn't appear to steal any significant business from big banks in the past.