If you find it somewhat surprising that Robinhood requests your bank login details when you sign-up to open an account, you're certainly not all alone. We've been taught to guard such sensitive information, and with reasons that are legitimate!
There is a legitimate and solid reason the reasons Robinhood solicits this information.
If you submit your bank's login information to Robinhood when you set up an account for the first time this makes it much easier for Robinhood to confirm that you're the owner of the account. It's all part of the security procedure and it's absolutely safe to provide this information to Robinhood.
Crypto exchanges and online brokerages adhere to the KYC known as Know Your Customer rules. It is a lawful requirement in the USA Patriot Act of 2001 and permits financial platforms to guard against money laundering and other criminal actions. This may not be the best option however, providing your bank's login information to Robinhood is a good idea for.
Why does Robinhood need my bank login?
Like most things in the crypto and financial industries the process of providing your bank account details to Robinhood is about security. It is important to note that it lets the company confirm that you're older than 17 and, more importantly, that it proves that you're who you are. Everybody wants their bank to be safe, but I'm sure you feel that providing your bank login is just a little too much information worth giving away.
You could decide to opt-out of giving your banking information to Robinhood. Select the ‘My Bank Isn't Listed' option that allows you to manually input your routing information and account numbers. Don't be expecting to be confirmed by Robinhood in the same way as you would if you provided the bank with your login.
The truth is that by giving your bank login details and connecting to your account at the banks directly with Robinhood and making your life much simpler. You can transfer funds and deposits directly from and to your bank account. This allows you to trade cryptocurrency and stocks through Robinhood's platform.
Is it safe to gift Robinhood your bank login?
Let's face it; Robinhood does not have the most appealing public image following its involvement in the meme stock short squeeze that took place in 2022. However, Robinhood is a licensed platform that abides by the regulations that are enforced by and FINRA as well as the SEC. In addition, Robinhood is also now a publicly traded company; therefore it must be legitimate or suffer the ire of its shareholders.
One issue that has been affecting Robinhood is that the application has been compromised a number of times in its existence. There have been a number of instances when user information has been compromised, which could include your bank login. This is the reason people are cautious about giving this sensitive information to sites such as Robinhood.
It is therefore appropriate to share with Robinhood your bank's login?
Similar to the time you provided Robinhood with the same information as when you provide Robinhood with your SSN the risk remains entirely with the customer. It is possible to take into consideration things like the history of Robinhood being targeted by hackers, but be aware that if signing with another brokerage, you'll likely need to give the same information.
Can you use Robinhood without having a bank account?
You could! The whole fuss about bank account logins and you are able to utilize Robinhood without having any bank accounts!
How is this possible? Since Robinhood is a platform that runs on the internet that accepts all kinds of payment methods that are digital.
You can make use of a range of methods which aren't bank accounts. This includes apps such as Skrill or the PayPal Cash Card, or any other debit card that is pre-loaded. You may also be able to transfer some of your pay directly to Robinhood's Cash management system. This Robinhood Cash Management account has an account number and routing number and functions as an account in a bank in the event that you require it to.
In the age of digital there are plenty of options to transfer money. With online brokerages and DeFi, there's no longer the need to have an account with a traditional bank like it used to be.
How do you link your bank account to Robinhood
Like everything else related to Robinhood this is no exception. The process of connecting to your account on bank with the Robinhood application is easy and easy. After you've signed-up to create an account on the Robinhood account, you'll be required to confirm that your account is linked to a bank.
When you have done this, Robinhood will send two micro-deposits to the bank account in the next 48 hours. Once the two deposits are received, you will be able to verify them on either the web or mobile application.
From here, follow the following steps to connect your bank account with Robinhood:
- Click the Account button at the lower right-hand corner of your Robinhood dashboard.
- Click on Transfers
- Click on the link to connect your Accounts
- Click Verify
- Enter the two amounts of deposits you received in your banking account through Robinhood
- Click Enter
Your bank account as well as Robinhood accounts are now connected, so that you are able to transfer money to and from each other!
Conclusion what is the reason Robinhood require my Bank Login?
As you've probably guessed, the process of submitting your bank's login information to Robinhood is concerned with security, and verification. This is all part of the larger area of the Know Your Customer regulation that all US banks must adhere to.
If you're not at ease sharing this information, you don't need to! It makes the transfer of funds between accounts more simple. Be aware that Robinhood is subject to the oversight of each of FINRA along with the SEC. I've provided other options like making use of Robinhood without the conventional bank account. It's your choice whether you're willing to risk it all!