Fintechs Slash Rates and Lose Potential Selling Point

Fintechs have started to follow the Fed and slash rates on savings accounts by an average of 1 percent; the move could remove a big selling point for fintech challengers who used big rates as a customer acquisition strategy; Robinhood dropped rates from 1.3 percent to 0.3 percent, SoFi dropped from 1.10 percent to 0.1 percent and Betterment sent a not to clients signaling a coming change; some fintechs are seeing an influx of customers due to the crisis but with rates dropping that might start to slow down; Adam Grealish, Director of Investing at Betterment, talks to Forbes about rates, “From time to time, the Federal Reserve makes cuts to help bolster the financial markets. While this isn’t ideal for high-yield accounts, it’s an important part of supporting the economy when business activity is expected to be slow,” said Grealish. “Of course when rates begin to increase again, we will follow along quickly.” Forbes

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