Robinhood launched in March 2015 with three primary innovations:
- Robinhood was the first major broker that allowed customers to buy and sell stock with a $0 commission.
- Robinhood allowed the “little guys” to purchase fractional shares for as little as $1.
- Robinhood made trading stock super easy via a mobile app.
Today, Robinhood has 31 million users.
What Does Unsettled Funds Mean on the Robinhood app?
After you sell a stock, the money received from the sale cannot immediately be withdrawn or used for a new purchase. The money must sit in an unsettled state for two business days. So if you made a sale on Monday, the proceeds would be available on Wednesday.
The SEC mandates this waiting period for all sales to give time for stock ownership and money to be transferred and finalized. This period was especially important decades ago when the sale of shares involved sending paperwork from one firm to another. Over the years, as technology improved, the SEC has been reducing the number of days required for settlement. Since 2016, the policy has been T+2 (trade plus 2 business days).
Proceeds that are inside this T+2 waiting period will appear as “unsettled” in the Robinhood app. You will know the money is coming, but you can’t touch it yet. This is very similar to a “pending” deposit in a traditional checking account.
How to Check Unsettled Funds in Robinhood?
To view the amount of unsettled funds, open the Robinhood app, and go to the Account tab. This page shows how much money you have in stocks and cash. In the middle of the page, you will see the “Unsettled Funds” figure.
How do I Withdraw Unsettled Funds From Robinhood?
There is no way to withdraw unsettled funds to your traditional bank account. However, you may be able to use these funds to make a new stock purchase. If you have a Robinhood Instant account, the company will let you use up to $1,000 of unsettled funds to make a new stock purchase. Robinhood Gold members can use up to $5,000. If you have a plain Cash account, then you will not have early access to any unsettled funds.
The amount of funds you have available for early access will automatically appear in your “Buying Power” figure. No additional steps are necessary. You can make a new stock purchase up to the maximum Buying Power.
How Long Does it Take to Clear Unsettled Funds?
It will take two business days for your unsettled funds to clear. So if you make a sale on Monday, the money should be settled by Wednesday.
Will Robinhood Funds Settle Over the Weekend?
No, weekends and bank holidays do not count towards the two business day settlement period. So if you make a sale on Friday, the money should settle on Tuesday.
When Can I Withdraw Unsettled Funds?
Unsettled funds cannot be withdrawn to a traditional bank account. You must wait for the funds to settle, within two business days.
Can I Day Trade with Unsettled Funds?
Customers with Robinhood Cash accounts cannot day trade using unsettled funds. Customers that have an Instant account can trade with a max of $1,000 of unsettled funds, and those with a Golf account can trade a max of $5,000
Can I Buy Crypto on Robinhood with Unsettled Funds?
No, Robinhood will not let any account type (Cash, Instant, or Gold) have early access to unsettled funds for the purpose of buying crypto.
However, after you sell crypto, the funds will be instantly available. There is no SEC-mandated settlement period for selling crypto.
How to Fix Robinhood Unsettled Funds
The two-day settlement period is mandated by SEC regulation, so there is no way to “fix” this requirement. However, if you think a technical error has occurred, you can contact Robinhood support via: https://robinhood.com/contact
Related: Guide to Dividend Investing