[abb1234etric]

I'd be shocked if RH can eventually launch this product in any form. People on HN seem to think its a marketing issue, but it isn't. The problem with the product is much deeper.

The core issue is that there is no way right now to provide savers with a 3% risk free interest rate. 1 year treasuries for e.g are at a 2.7% yield and that assumes you lock up your money for a year. Basically, their "novel" idea was to supplement the rate they would theoretically be getting from investing your money in t-bills with interchange revenue. But the interchange revenue wouldn't be a sure thing. It depends on the behavior of the customer. This in turn means that they would have to just pay depositors out from their VC money until they attract that type of customer that could support their interchange revenue assumptions.

There is a good reason that ideas like this are strictly regulated. If I could just set up a company and promise main street investors a guaranteed return based on my rosy view of the world, a lot of people could end up hurt. I'd be shocked if the product, after they finally launch it, offers any of the features that attracted people to the offering in the first place.

[russdpale]

The 3% was definitely interesting, but to me at least, moving money quickly between my account and trading/investing account would be nice. Especially when its all in one application.

To me, the 3% is not that interesting. 3% is chump change, 3k on 100k.. who cares? Most Americans don't even have 400 bucks in any of their accounts. I don't think most people are going to sign up with a bank for 10 bucks extra per year. Usually much less than that.