Nithin Kamath says Robinhood makes $100 million profit from instant withdrawals, claims US banking system ‘broken’

Zerodha co-founder Nithin Kamath on Tuesday weighed in on how brokerage companies in the United States charge customers for processing instant client withdrawals and how they differ from those in India.

In a post on X, Kamath stated that US-based Robinhood Markets Inc. is expected to generate approximately $150 million in revenue from these charges, which could translate to a $100 million profit.

“I just discovered that Robinhood will generate approximately $150 million (~ ₹1,300 crores) in revenue from the fees it charges for processing instant client withdrawals. Their cost to process these is around $35–40 million, which means a clean $100 million to the bottom line, and that’s just from instant withdrawals,” Nithin Kamath said.

India far behind US in this aspect

In the post, Nithin Kamath highlighted how India is far behind the US when it comes to customers ready to pay for add-on services, even as startups hungry for revenue offer other products.

“As an Indian startup with some scale, founders dream of generating revenue like this from non-core products. Hence the rush to introduce everything: loans, insurance, payments, and other financial services," the Zerodha CEO said.

"But nothing really works outside the core offering. It just shows how far behind India is compared to the US when it comes to customers willing to pay for add-ons,” he added.

Nithin Kamath hails UPI

Expressing his shock over transaction fees paid by people in the US, Nithin Kamath hailed India's UPI, which is not only instant but also free of charge. In the US, investors pay 1.75% as charges for instant withdrawal.

“By the way, I’m still shocked that people pay 1.75% on an instant withdrawal transaction. This really shows how broken the US banking system is. Even in 2025, there’s still no full-fledged instant payments system like UPI — most fund transfers take a couple of days,” he said.

The Zerodha co-founder attached a note stating that Robinhood charges 1.75% per transaction for instant withdrawals from customers. The minimum amount payable for instant withdrawals is $1 per transaction. The maximum can reach as much as $150.Other brokers like Charles Schwab and Fidelity also charge their customers a cut for instant withdrawals, the chart showed.

Lauding the UPI system, Nithin Kamath said that it enables Zerodha clients to make deposits or instant withdrawals without incurring any fees.

“For comparison, we don’t charge Zerodha clients for deposits (thanks to UPI) or instant withdrawals. We’ve processed over ₹50,000 crores in instant withdrawals in <2 years, at zero cost,” he added.