[Aunche]

I'm by no means an expert in this, but here's my rough understanding. Banks don't really touch the money in your consumer savings account. It's just used to expand their reserve. As a result, your money can only grow at the Fed fund rate. This is the interest rate of what a bank would get from lending money overnight and is targeted at 2-2.25% right now. The highest interest rate a bank can support without operating at a loss is about 2%, which is what most online-only banks like Marcus and Ally offer.

Basically, Robinhood is subsidizing this 3% interest rate with investor dollars. Of course, there having a higher reserve lets banks lend out more money, but I'm not sure that's worth paying a 1% premium over.