[DennisP]

I think that just keeps people from making claims against the stocks they bought going down in price. A checking account holding dollars isn't going to lose protection because Robinhood the company invested in some stocks.

Aside from that, it appears they're investing this money in short-term treasuries rather than stocks, making up the difference in merchant fees for debit card transactions, and maybe treating this as a loss leader. They've partnered with Sutton Bank since they don't have their own banking license.

https://www.forbes.com/sites/jeffkauflin/2018/12/13/in-a-bol...