Why Do Interactive Brokers' Customers Hold So Much More Money Than Robinhood's?

Interactive Brokers (NASDAQ:IBKR) and Robinhood Markets (NASDAQ:HOOD) are both online brokers. But the money sitting in their accounts looks nothing alike.

Interactive Brokers finished September with around $965 billion of client equity across about 5.6 million accounts. That comes out to around $173,000 an account. Robinhood, meanwhile, finished August (its latest monthly report) with $384 billion of platform assets and 28.6 million funded customers, or around $13,400 each.

Put another way, Robinhood has about five times as many customers, but Interactive Brokers holds about 2.5 times as much money. The average Interactive Brokers account holds around 13 times as much as the average Robinhood customer.

I think the gap boils down to who each broker was built for -- and that shapes how each makes money.

Image source: The Motley Fool.

Who uses Interactive Brokers?

In its annual report, Interactive Brokers says it is "especially attractive to sophisticated and active investors." Its customers live in over 200 countries and territories. And along with individuals, it serves hedge funds, financial advisors, proprietary trading firms, and introducing brokers (other brokerages that use Interactive Brokers' platform for their own customers).

The average U.S. stock trade by its IBKR Pro clients was around $23,700 in September, more than the average Robinhood customer holds altogether.

Interestingly, the average Interactive Brokers account has been shrinking a bit. A year earlier, its 4.13 million accounts held $757.5 billion, or around $184,000 each. That number fell to about $179,000 at the end of June and to about $173,000 at the end of September, as the account count grew 35% year over year while client equity rose 27%. It seems newer accounts tend to start smaller than older ones.

Robinhood's newer investors

"Many of our customers are just beginning their financial journeys," Robinhood wrote in its annual report.

And Robinhood counts people, not accounts. It had 29.9 million investment accounts at the end of June, versus 28.4 million funded customers, so its per-account number would be even lower.

But Robinhood's average is climbing. Its funded customers held around $11,400 each in August 2025, about $13,000 at the end of June, and about $13,400 in August -- an 18% gain in a year. Platform assets rose 26% over that time, and net deposits (money customers put in, minus what they pulled out) of $74.1 billion over the last 12 months accounted for about 24 points of that growth. Most of the gain, then, came from fresh money, not just rising markets.

Robinhood's also chasing bigger balances directly. Its retirement accounts held a record $34.5 billion at the end of June, up 82% year over year. And its platform assets now include money that independent advisors manage on TradePMR, the advisor platform Robinhood bought in February 2025, which had hit $50 billion by the company's second-quarter report. Financial advisors, of course, are among the groups Interactive Brokers already serves.

Bigger balances bring more interest income

Client cash and the loans clients take out against their investments both earn interest for a broker. And Interactive Brokers has lots of both: $182.4 billion of client credit balances (cash clients keep in their accounts) and $108.5 billion of margin loans at the end of June.

Showing how much this matters, Interactive Brokers' net interest income grew 23% year over year to $1.06 billion in the second quarter, around 56% of its $1.9 billion of net revenue.

Robinhood's revenue tilts the other way. Its transaction-based revenue (mainly from options, prediction markets, stock, and crypto trading) jumped 44% to $776 million in the second quarter, around 59% of its $1.31 billion of total net revenue. Net interest revenue climbed just 9% to $389 million.

And its second-quarter net income rose 48% to $573 million, but $129 million of that was from one-time gains.

Robinhood said it made $187 per funded customer on an annualized basis in the second quarter. Measured the same way, Interactive Brokers took in around $1,500 per account, or about eight times as much.

That's why Robinhood's drive to attract assets arguably matters more than any one trading product. Trading revenue can swing with how active customers feel. Interest on a growing pool of client money might be steadier, but it still depends on interest rates.

Investors already pay up for both stocks. Interactive Brokers trades at around 27 times next year's expected earnings.

Robinhood, priced more like a growth stock, trades at over 30 times next year's expected earnings.

At that valuation, investors seem to assume Robinhood's average balance keeps rising. But at around $13,400, its average customer still holds a fraction of the $173,000 in the average Interactive Brokers account. Closing much of the gap will likely take years.

Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Interactive Brokers Group. The Motley Fool recommends the following options: long January 2027 $43.75 calls on Interactive Brokers Group and short January 2027 $46.25 calls on Interactive Brokers Group. The Motley Fool has a disclosure policy.