How to Withdraw Money From Robinhood Account?
Managing your investments and accessing your funds is an essential aspect of online trading platforms like Robinhood. So, one of the many questions emerges: how to withdraw money from a Robinhood account?
In this guide, we’ll introduce the Robinhood app and walk you through the steps to help you easily and efficiently withdraw money from your Robinhood brokerage account.
Table of Contents
What is Robinhood?
2018 was the year when Robinhood first emerged on the stock investing scene. The trading platform gained popularity among many young investors for its easy-to-use app and commission-free trading.
The Robinhood account lets you buy and sell crypto and stocks. However, even though depositing and investing processes are simple, withdrawing money from Robinhood to your bank account can be a challenge.
How to withdraw money from Robinhood?
You can withdraw funds from a Robinhood account either by a debit card or a bank account transfer.
The first method is considerably fast. You can expect your transfer to reach your debit card in 30 minutes. However, Robinhood charges a 1.5% fee. Therefore, the other method is for you if you are not in a rush.
You can always withdraw money by bank transfer. It’s a free option. However, this option may take up to five business days.
Moreover, note that you can make only up to five withdrawals per business day. Also, it is better to withdraw money to the same bank account you used for depositing funds to your Robinhood account.
Withdrawing money on the phone
Transferring money from a Robinhood account on the phone is a convenient option especially because the process is the same for iOS and Android users. Here are the steps you need to follow:
- Open the Robinhood app and tap on the account icon.
- Look for Transfers on the menu.
- Select Transfer Money.
- Choose your bank account or debit card from the list.
- Enter the withdrawal amount.
- Double-check all details and select Transfer.
Money withdrawals on the computer
If you feel more comfortable withdrawing funds on the computer, know that the withdrawal process is quite similar. Just log in to your account on the Robinhood website and follow these steps:
- Find the Account in the top right corner and click it.
- Tap Transfers.
- Choose either Transfer to your bank or Transfer to a debit card.
- Select where you want to send your money from Robinhood.
- Enter the amount you want to withdraw.
- Make sure all details are correct and confirm the transfer.
Things you should know before withdrawing funds from Robinhood
People using Robinhood should be aware that some rules may limit their account usage. Here are some aspects you may want to consider before you withdraw money from Robinhood.
As mentioned before, Robinhood doesn’t charge anything for bank transfers. However, if you withdraw money to your debit card, you must pay a 1.5% fee.
Moreover, you’ll be charged if you transfer money to another brokerage. You can do it through Automated Customer Account Transfer Service (ACATS). This method will cost you $100 per transaction, and it doesn’t matter whether it is a full or partial transfer.
Nonetheless, you can avoid some fees by selling your positions. This way you’ll need to wait till the funds are settled and then transfer funds to your bank account. After you get the money, you can deposit it into your new brokerage account.
Robinhood withdrawal limit
Even though everyone can withdraw money from Robinhood, there are several restrictions. First of all, there is a limit of five withdrawals you can make every business day.
Additionally, the maximum amount that can be withdrawn by bank transfer every day is $50,000. When it comes to debit cards, the limit, on the other hand, is reduced to $5,000 per day.
If you have a significant balance that is greater than the limit, you will be required to make your withdrawals in one lump sum.
Time to settle the trade
There is a time lag between selling stock and receiving your money. Securities transactions in the United States often settle, or become final, after three business days. It includes stock and ETF purchases and sales, as well as option transactions.
Instant settlement allows you to withdraw funds quickly following the sale of stocks, ETFs, or options and is available to users of Robinhood Gold and Robinhood Instant.
Free stock from Robinhood’s Referral program
Robinhood provides you with free stock from its Referral program. With Robinhood, you can instantly liquidate your holding if you choose to.
However, there is a catch. You are free to sell that stock, but the money you made can only be withdrawn from your account once you have kept it there for 30 days.
Switching bank accounts
There can be account restrictions when you change your linked bank account or the platform notices unusual trading patterns. It occurs when you move your money to another bank account than the one you used to fund your Robinhood account.
This activity may raise suspicion of potential fraud. As a result, Robinhood may ask you for some documents (like sending pictures of your photo ID or bank statements) that prove the legal ownership of both of your bank accounts.
If you want to avoid this situation, the best solution would be to withdraw money from Robinhood to the same bank account you used to make a deposit.
If you make a mistake or just made up your mind, Robinhood lets you cancel transfers before they are processed. However, you have to do it within 24 hours, depending on when you initiate the withdrawal.
To cancel a transfer, follow these steps:
- Click the Account.
- Open the menu and find History.
- After selecting the pending withdrawal, tap Cancel Transfer.
How long after selling on Robinhood can I withdraw?
For stocks, the settlement term is the trade date plus two trading days (T+2), often known as regular-way settlement. Those funds will be immediately withdrawable as cash on the third day.
How long do Robinhood transfers take?
The standard processing time for a Robinhood withdrawal to a bank account is two to five business days. Both deposits and withdrawals are subject to these limitations on your Robinhood account.
Why can’t I withdraw my money from Robinhood?
Several common reasons could be at play if you’re experiencing difficulty withdrawing money from Robinhood. Here’s a consolidated list of potential issues:
Withdrawal limit: Robinhood imposes a withdrawal limit of $50,000 or five withdrawal transactions per day. If you exceed this limit, you’ll encounter an error when trying to withdraw funds.
Settlement period: After making a trade or deposit, it takes 2-3 days for the funds to settle into your account. Only after this period, you can withdraw the money to your preferred bank account.
Account restrictions: Although not common, account restrictions can prevent withdrawals. Such restrictions might occur due to unusual trading patterns, changing your linked bank account, or security breaches.
Transaction wait times: Some transactions, like those involving referral stocks or equities sales, require a waiting period for settlement before you can withdraw the funds. It typically takes two days.
Recent deposits: If you’ve recently deposited money from your bank, it usually takes five trading days for these funds to become available for withdrawal or further transactions.
Pending withdrawal requests: If you’ve already initiated a withdrawal request, it may still be in the processing stage.
Changing bank account: Attempting to withdraw to a different bank account within 60 days of your initial deposit can also lead to issues.
For some issues, the only solution is to wait. However, if the time can’t resolve the problem, contact Robinhood’s customer support.