Robinhood online brokerage (Hood) is rolling out retirement accounts to users of its mobile app, a move that comes as the retail craze that lifted the company’s fortunes last year has faded.
Robinhood will offer customers a 1% match on traditional Roth IRAs, the company said Tuesday. Users can start investing on deposits of up to $1,000 before settling contributions into their account.
The launch brings Robinhood closer to competing directly with well-known brokerages like Fidelity, Charles Schwab, and Morgan Stanley’s E*TRADE, which have been involved in the online retirement account market for years.
Potential customers can apply to be placed on Robinhood’s retirement waiting list starting Tuesday and can expect to receive access on a rolling basis in the coming weeks, but full availability of the offering is scheduled to begin in January.
Robinhood benefited from a retail trading boom at the beginning of the COVID pandemic as lockdowns and stimulus checks drove droves of retail investors to trade online. But as the economy reopened, and monetary tightening by the Federal Reserve dealt a rout in stock markets this year, the popularity of his business has faded.
In August, the platform announced that it was Cut 23% of its workforcea second round of layoffs after the cut 9% of full-time employees in April.
The total number of monthly active users was 12.2 million in the third quarter, according to the company Latest quarterly report available – Down by 1.8 million users from the previous quarter.
on Robinhood’s Third quarter earnings callCEO, Vlad Tenev, said retirement accounts will be available to users “just in time for the New Year and the heart of IRA season.”
“I think you’ll really like what the product and customer value pillar will look like,” Tenev said during the call. “And we polish it up and make sure it looks great, but we feel good about bringing it up just in time for tax season.”
Executives said in previous earnings calls that the company promised to roll out retirement account options by the middle of 2022.
The company said retirement accounts will provide access to stocks and exchange-traded funds (ETFs).
“In terms of bonds and adding more tools to Robinhood, we haven’t heard a lot of customers specifically request that,” Tenev said on the third quarter call. “However, we understand that as we retire and as we continue to add more tools for long-term investors who are diversifying, we may start to see more commentary about that.”
Robinhood shares are down nearly 48% year-to-date as of Monday’s close.
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Alexandra Semenova is a correspondent at Yahoo Finance. Follow her on Twitter @tweet
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