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No. Upstanding retail brokerages (such as Interactive Brokers) don’t make interest on their customers’ balances.
by QuackingJimbo 7y ago
No. Upstanding retail brokerages (such as Interactive Brokers) don’t make interest on their customers’ balances.
- notyourday 7y agoHuh? That's just not how this works. There's always a spread between the cash interest that the custodial firm gets on the balances it holds and the interest it pays to the customers.
- usmannk 7y agoWoah that is totally untrue. Brokerages make a lot of money by investing your balance. In particular, IB makes 49% of its revenue this way. https://www.kalzumeus.com/2019/6/26/how-brokerages-make-money/ https://www.kalzumeus.com/2019/6/26/how-brokerages-make-mone...
- benj111 7y agoInteractive Brokers makes 49% of revenues from customer balances. https://www.kalzumeus.com/2019/6/26/how-brokerages-make-money/ https://www.kalzumeus.com/2019/6/26/how-brokerages-make-mone...
- Youden 7y agoTo add an even clearer source to the other replies: https://www.interactivebrokers.com/en/index.php?f=1595 https://www.interactivebrokers.com/en/index.php?f=1595 IB is abundantly clear that it makes money from cash balances. I'm not sure where you got this idea from.
- gtfratteus 7y agoAssuming that's true, how would that make RobinHood a predatory lending scheme?