Robinhood Boosts Trading Volumes, Launches High-Yield 5% Savings

<p>In a
detailed performance breakdown for October 2023, Robinhood Markets, Inc.
(Robinhood) disclosed a mixed picture of its operational health. While on one
hand, the number of active users was increasing, the value of assets they held
was decreasing slightly.</p><p>Moreover,
the retail trading company also announced its new savings offering, introducing
5.0% Annualized Percentage Yield (APY) for Robinhood Gold Members.</p><p>Robinhood's October Data
Shows Mixed Financial Signals</p><p>The number
of Net Cumulative Funded Accounts (NCFA) marginally rose by 30,000 in October,
totaling 23.3 million. However, the Assets Under Custody (AUC) experienced a
slight contraction of 2% from the previous month, at $84.6 billion. Despite
this, net deposits remained robust at $1.0 billion for the month, signifying a
14% annualized growth rate against September's AUC.</p><p>Analyzing
the results on a year-over-year basis, we see that <a href="https://www.financemagnates.com/tag/robinhood/" target="_blank" rel="follow">Robinhood's </a>NCFA grew by 2% from the
level of 22.9 million reported in October 2022, while AUC increased by 21% from
$70.2 billion. On the other hand, users deposited $600 million more during the
same period a year earlier.</p><p>The data
emerged just under a week after Robinhood published its <a href="https://www.financemagnates.com/forex/robinhood-eyes-europe-for-expansion-q3-crypto-revenue-plunges-55-yoy/" target="_blank" rel="follow">financial report for Q3
2022</a>, in which it reported a net loss of $85 million and a 55% decrease in
cryptocurrency revenues. However, the broker turned a profit of $25 million in the <a href="https://www.financemagnates.com/forex/robinhoods-revenue-up-10-in-q2-but-active-users-drop-by-1m/" target="_self">second quarter of the ongoing year.</a></p><p>Robinhood's Customer
Activity and Market Engagement</p><p>Robinhood's
platform sustained active user engagement, with October witnessing a noteworthy
15% increase in Equity Notional Trading Volumes, which amounted to $50.8
billion. </p><p>Options
contracts traded were up by 11% to 96.6 million, and Crypto Notional Trading
Volumes leaped to $2.3 billion, marking a significant 92% rise from September
2023. This surge in crypto trading aligns with the broader market trends where
digital currencies have been experiencing heightened <a href="https://www.financemagnates.com/terms/v/volatility/">volatility</a> and interest.</p><p>Despite
these positive indicators, margin balances declined by 3%, totaling $3.5
billion at October's end. Conversely, the cash sweep balances, indicative of
the cash management services efficiency, moved upward by 2%, reaching $13.9
billion.</p><p>Robinhood Increases APY
for Gold Members</p><p>In the
meantime, Robinhood has announced an increase in the interest rate for its
Robinhood Gold service, now offering 5.0% APY, which is the company's highest
to date. This enhanced rate applies to both new and current Robinhood Gold
users, allowing them to accrue more interest on uninvested cash without
limitations on <a href="https://www.financemagnates.com/tag/earnings/" target="_blank" rel="follow">earnings</a>. Additionally, non-Gold members have the option to earn
a 1.5% interest rate on uninvested brokerage cash by enrolling in the cash
sweep program.</p><blockquote><p lang="en" dir="ltr">Say