Robinhood boosts interest rate on uninvested cash balances to 5% for Gold tier customers amid rising US Treasury yields
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US stock trading app Robinhood recently revealed its latest operating data for the previous month, October 2023. The report revealed certain details regarding the app’s user activity and market trends. However, the company also decided to increase interest rates on uninvested cash balances to 5% for certain customers.
Details of Robinhood’s October 2023 report
According to Robinhood’s report, by the end of the last month, the Net Cumulative Funded Accounts (NCFA) climbed up to 23.3 million, which is around 30 thousand accounts higher than in September of this year. Meanwhile, Assets Under Custody went slightly down compared to September figures, sinking by 2% to $84.6 billion.
The company also revealed that it registered net deposits of $1 billion in October, which puts the annualized growth rate at around 14%. In the past twelve months, the company saw total net deposits climb by 24% compared to the year before, now sitting at $16.7 billion.
Robinhood also saw its trading volume go up significantly in October, even to the point where it outperformed in September 2023. The app saw a volume boost for crypto, options, and equities. Stocks saw a trading turnover of $50.8 billion, which is also a 15%increase, while options went up by 11% to $96.6 million, and crypto volume skyrocketed by 92% to $2.3 billion.
On the other hand, the app saw a 3% drop in margin balances compared to September, which totaled $3.5 billion in October 2023. Cash sweep balances saw a 2% increase, which took them up by around $0.3 billion, with a total of $13.9 billion in October, compared to September.
Robinhood increases interest rates for Gold customers
One interesting decision that the app has announced is the boost of interest rates on uninvested cash balances for its top customers. This includes users of the apps Gold tier, who pay $5 subscription fee every month. The company decided to boost interest rates by 5%, which came amid rising US Treasury yields.
Elevated rates will allow users to generate returns simply by depositing their funds into a savings account. As for non-Gold customers, the interest rates remain unchanged, sitting at 1.5% APY.
It is also worth noting that Robinhood recently revealed plans to expand its operations into the UK and EU, with further plans to launch crypto trading and brokerage in these regions. For the time being, it appears as if the company is still following these plans.
However, despite the fact that this would mean expansion into new markets, the company’s Q3 earnings report shows mixed results.