Robinhood to Launch Retirement Investment Accounts
Over the years, fans of the FinTech app Robinhood have gained a reputation (accurate or not) for being risky and impulsive market players. However, the company will soon look to promote long-term investments by introducing retirement accounts on the platform.
During a third quarter earnings conference call with investors, co-founder CEO Vlad Tenev formally announced plans to roll out Robinhood Retirement accounts soon. Specifically, Teniv stated that the company is working toward launching the feature in time for tax season. Furthermore, he confirmed that Roth IRAs would be offered alongside traditional ones.
The launch of Robinhood Retirement will mark the latest expansion for the company, which was unveiled a number of new features so far this year. Most recently, the company emphasized its premium Robinhood Gold product by offering 3% APY on uninvested funds to Gold members (Tenev noted that this rate will now be rising following the Federal Reserve’s recent hike). Elsewhere, the company has begun rolling out its non-custodial web3 wallet to waitlist customers, with plans to take this app global in the future. Robinhood has also been testing an instant withdrawal options for users, which began making its way to select users last month. While this speedier option comes at a cost of 1.5%, Tenev stated that the free transfer option would remain available.
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In a press release announcing the FinTech’s earnings for the quarter, Tenev stated, “In the third quarter we achieved our goal of reaching adjusted EBITDA profitability, a quarter earlier than planned. We delivered on top feature requests for customers including advanced charts, options in cash accounts, instant withdrawals and our self-custody, web3 wallet.” He added, “In the next week, we are raising the yield on uninvested cash for Gold members – making it one of the best rates in the industry.” Robinhood CFO Jason Warnick also said of the quarter, “We drove positive Adjusted EBITDA by increasing revenues and reducing expenses. We also continued to deliver on our 2022 product roadmap, which helped maintain steady net funded accounts and drive strong net deposits.”
Robinhood Retirement seems to be a logical extension for the popular app as it continues to diversify its offerings. In fact, it seems like a feature that would have arrived earlier than now. Nevertheless, it will be interesting to see what Robinhood’s retirement accounts look like, what types of investments they allow (will crypto holdings be offered in IRAs?), and whether consumers respond well to these long-term investment products.