Charles Schwab (SCHW), Interactive Brokers Group (IBKR) and Robinhood Markets (HOOD) all have businesses exposed to interest rates, but none is a simple bet on higher Treasury yields. Their earnings depend on which rates move, how quickly assets and funding costs reprice, and whether customers move cash, borrow on margin or trade. These are examples of brokerage stocks with rate exposure—not a ranking or a forecast that rising yields will lift their share prices.
How higher Treasury yields can affect brokerage stocks
Brokerages can earn interest on customer cash, securities and loans, while paying interest to customers or other funding providers. When rates rise, income on some short-duration or floating-rate assets may increase. But funding costs can rise too, and customer cash may shift out of low-yield sweep accounts into money-market funds or other investments. The result depends on the balances involved and how quickly each side reprices.
“Treasury yields” also needs qualification. A change in a particular Treasury maturity is not interchangeable with a change in the federal funds rate, a broker’s customer cash rate or its borrowing costs. Company disclosures discuss exposures to short-term benchmarks, floating-rate assets and hypothetical rate shocks; they do not establish that a given Treasury yield move will produce a particular earnings result.
- Asset mix: Short-term investments, margin loans and other interest-earning balances may respond differently to rate changes.
- Funding and customer rates: Interest paid on deposits, sweep cash and borrowings can offset asset income.
- Customer behavior: Cash leaving a sweep program can reduce balances available to earn interest or increase the need for replacement funding.
- Other business lines: Commissions, trading, lending and other revenue can matter as much as interest income.
Three brokerage stocks with disclosed rate exposure
Charles Schwab (SCHW)
Schwab says its net interest revenue depends on the amount and mix of interest-earning assets and interest-bearing liabilities, the spreads earned and paid, the timing of rate repricing, and the spread between short- and long-term rates. Its 2025 annual report says higher prevailing short-term rates generally improve yields on shorter-duration earning assets. It also describes the countervailing risk: when rates rise rapidly, clients may move cash from sweep products into higher-yielding investments or money-market funds. That can shrink on-balance-sheet earning assets or require more expensive replacement funding. Falling rates can also pressure results if asset yields decline faster than funding costs.
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Schwab reported $11.90 trillion in client assets and 38.5 million active brokerage accounts as of December 31, 2025. Those company-reported figures describe the scale of the business, not a measure of its rate sensitivity.
Results can move for reasons other than rising rates. In its second-quarter 2026 filing, Schwab reported that net interest revenue increased $535 million, or 19%, in the quarter and $973 million, or 18%, in the first six months, compared with the corresponding 2025 periods. The company attributed the increases primarily to growth in margin and bank lending, lower average wholesale borrowings and lower yields on most funding sources. Lower floating-asset yields, reflecting lower market rates, and lower balances in some securities and segregated cash partly offset those factors.
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Interactive Brokers Group (IBKR)
Interactive Brokers earns interest on customer credit balances and other assets and charges interest on margin loans. Its 2025 Form 10-K says lower U.S. benchmark rates reduce interest earned on segregated cash, invested mainly in short-term U.S. government securities and related instruments, and limit margin-loan interest income.
Net interest income rose 13% to $3.563 billion in 2025, according to the company. Higher average margin loans and customer credit balances, along with stronger securities-lending activity, drove the increase; lower benchmark rates partly offset it. The result illustrates why a broker’s interest revenue can grow even when one rate-related factor is moving against it.
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Robinhood Markets (HOOD)
Robinhood’s 2025 Form 10-K describes interest income from margin loans, segregated cash and securities, corporate cash and investments, cash sweep, credit-card balances and securities lending. It says lower short-term rates reduced revenue from corporate cash and investments and that future Federal Reserve cuts could negatively affect net interest revenue.
Robinhood’s second-quarter 2026 Form 10-Q reported $389 million in net interest revenue for the quarter ended June 30, 2026, up 9% from the same quarter of 2025. The components did not move together:
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| Robinhood interest-revenue component | Q2 2026 result | Year-over-year change |
|---|---|---|
| Margin interest | $215 million | Up 89% |
| Interest on cash sweep | $41 million | Down 32% |
| Interest on corporate cash and investments | $31 million | Down 33% |
| Net securities-lending revenue | $10 million | Down 81% |
Robinhood attributed the overall increase primarily to higher margin interest and net credit-card interest, partly offset by declines in securities lending, cash sweep and corporate cash revenue. It says the cash-sweep spread is managed in large part by adjusting the rate offered to users as partner-bank rates change. So the quarter’s 9% increase cannot be read as a direct measure of the effect of Treasury yields.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What the companies’ rate-sensitivity estimates do—and do not—show
The companies’ modeled estimates use different shocks, balance dates and financial measures. They should not be compared as if they ranked which stock benefits most from a rate increase.
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| Company | Rate scenario and modeled effect | Balance date and stated assumptions |
|---|---|---|
| Charles Schwab | A comparable quantified sensitivity estimate is not stated in the cited 2025 annual report. | Not stated in that report. |
| Interactive Brokers | A 0.25-percentage-point increase in U.S. dollar rates was estimated to add $77 million to annualized net interest income. A separate 0.25-point increase in relevant non-U.S.-dollar benchmark rates was estimated to add $30 million annualized. | Uses customer balances and investments at December 31, 2025; assumes maturing instruments are reinvested in short-duration instruments. |
| Robinhood | A hypothetical 100-basis-point rate change was estimated to change pre-tax total net revenues, net income and cash flows by $350 million. | Applies to modeled balances at June 30, 2026. Cash-sweep balances are excluded from short-term rate sensitivity because Robinhood says it can adjust user rates for most of that program. |
Interactive Brokers’ figure is an annualized net-interest-income estimate; Robinhood’s is a modeled effect across three financial measures. Neither is a forecast of realized annual results or of stock returns. Robinhood says actual effects may differ as balances, timing, rates, market conditions and management actions change.
How to interpret the rate exposure before investing
A filing’s rate sensitivity describes a modeled operating exposure, not a share-price target. Stock performance also depends on valuation, expectations, trading activity, client growth, expenses and broader market conditions. A useful comparison is therefore not simply “which broker has the biggest rate number?” but how each business earns interest, what it pays to retain or fund balances, and what else drove recent results.
Quick Recap
- Check whether the stated exposure concerns short-term benchmarks, a specific currency or a hypothetical parallel rate move—not a particular Treasury maturity.
- Look for how customer cash, margin lending and funding costs could offset interest earned on assets.
- Separate net interest revenue from commissions, trading and other sources of growth before attributing a company’s results to rates.
- Treat each sensitivity estimate on its own terms: its date, shock size, financial measure and assumptions are part of the figure.
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