Archive · 12 Nov 2025
Robinhood's Instant Withdrawal Fees Highlight US Banking System Issues, Says Nithin Kamath
Imagine you have money in a stock account.
In America, if you want your money quickly after selling your stocks, companies like Robinhood charge a fee, which is a percentage of the money.
Nithin Kamath, who runs a company in India called Zerodha, was surprised that Robinhood could make a lot of money, around $100 million, just from these fees!
He thinks this shows that American banks are slow because it usually takes a few days for money to move.
In India, they have a system called UPI that lets people move money instantly and for free.
Kamath believes Americans are used to paying extra for speed, which is why companies there find ways to charge for it.
He feels the US system is 'broken' because it costs money for fast transfers, unlike in India where it's usually free.
Robinhood is projected to make $100 million in profit from instant withdrawal fees.
US brokers like Robinhood charge an average of 1.75% for instant withdrawals.
Nithin Kamath expressed surprise at customers paying fees for instant withdrawals in the US.
Kamath contrasted the US system with India's UPI, which offers free and instant deposits and withdrawals.
He suggested that the US banking system is 'broken' due to slow fund transfers and the prevalence of withdrawal fees.
- Who
- Nithin Kamath, co-founder of Zerodha
- What
- Criticized the US banking system after noting Robinhood's potential to make $100 million profit from instant withdrawal fees, contrasting it with India's free UPI system.
- When
- Recently, mentioned in a LinkedIn post
- Where
- United States and India
- Why
- To highlight the profitability of charging for instant withdrawals in the US and to point out the perceived inefficiency and higher costs in the US banking system compared to India's UPI.
- Robinhood's Projected Revenue from Instant Withdrawals
- $150 million
- Robinhood's Projected Profit from Instant Withdrawals
- $100 million
- Robinhood's Estimated Costs for Instant Withdrawals
- $35-40 million
- US Instant Withdrawal Fee
- 1.75%
- US Instant Withdrawal Fee Cost
- Approximately 1.75% per transaction
- Comparison to India's UPI System
- Offers instant and free deposits and withdrawals
