Robinhood has a great reputation as a brokerage firm that offers various shares to investors and traders with zero commission on traded US stocks. However, getting money in and out of a Robinhood trading account may be very tasking due to the platform’s regulation policies that guide the transfer process hence, leading to traders going through a long transfer time. In view of this, what are the reasons why Robinhood takes so long to transfer money from your trading account to your bank account or from your bank account to your Robinhood account?
When you make a sale on your Robinhood, it takes two trading days for the money to be settled before you can withdraw the money. If you initiate an instant deposit, it may also take up to five business days for the funds to be settled in your account. These processes cause transfers to take longer.
In this article, I’ll explain in detail why Robinhood takes time to complete transfer processes. Keep in mind that there are protocols that mandate Robinhood to make sure each transaction on the platform is confirmed to avoid scams.
How Long Does It Take To Transfer Money On Robinhood?
If you’re performing an instant deposit, a withdrawal to your own bank or another bank, or a transfer of assets from Robinhood to another broker, each transaction process does have a time limit it takes for completion on Robinhood.
Usually, it takes up to five business days to complete pending deposits. But if you initiate an ACH (automatic clearing house) transfer, the ACH withdrawal could take about 1-2 business days after you initiate the transfer. Then it’ll take 5 business days for the transfer to reflect in your Robinhood account, totaling about 7 business days in total to complete your deposit.
The process doesn’t take that long if you follow the right processes and your transfer process doesn’t seem like a scam. During the time your deposit is processed, you won’t be able to spend or withdraw these funds.
Before you’re able to withdraw cash after you’ve made a sale on Robinhood, it’ll take two business days for the cash to be available as withdrawable cash in your account. These two business days are known as the settlement period.
After the settlement period, your funds will be available to be transferred to your bank account immediately.
Transfer From Robinhood To Other Brokers
If you want to transfer your funds from Robinhood to other brokers, it may take about five to seven business days for the process to be completed.
This process may take longer depending on if you’re only transferring your funds or you’re transferring your whole account from Robinhood to another broker. There can be long delays if you’re trying to transfer options that expire within 5 business days.
After you initiate the transfer, if you also try to buy or sell your possessions in your Robinhood account, your transfer process will be delayed for longer.
Why Does It Take So Long To Transfer Money On Robinhood?
There are various reasons why transfer processes from and to your Robinhood account. These reasons may affect your deposit or withdrawal process if you do not take note of them. The following are the reasons:
If you’re trying to deposit money into your Robinhood account and you initiate an ACH withdrawal in your bank account, it may take 1-2 business days after you initiate the transfer for the deposit into your Robinhood account to begin processing.
After processing the transfer within 1-2 business days, it could take 5 business days for your deposit to appear in your Robinhood account.
However, if you initiate the instant deposit feature, you’re allowed to get up to $1,000 in your Robinhood account immediately after you initiate a transfer. If your pending deposit exceeds $1,000, it will take a settlement time of five business days.
During the deposit settlement time, you will not be able to withdraw or use the funds while it’s in-flight unless you got the initial $1,000 from the instant deposit feature. This means you won’t be able to use your funds to purchase stocks when the deposit is still processing but if you got $1,000 from the instant deposit feature, you can use that to perform some trading action.
You will be unable to withdraw your deposited funds during the settlement period until the deposit is completed and your money appears as withdrawable cash in your account.
Whenever you make a sale from your Robinhood account- for instance, you sold a stock for cash, it takes a while for the funds to be settled in your account as withdrawable cash. This is why it takes some time for withdrawal transfer processes to be completed.
It takes an average of two trading days for the funds to be settled in your account. During this settlement period, you cannot withdraw the funds from your account.
Consistent attempts to withdraw your funds during the settlement period may get your account restricted. Hence, you need to be patient during the settlement period.
Robinhood also allows you to make five withdrawals daily, as long as they total below $50,000.
Withdrawing Funds To A Different Bank Account
If the original bank account you used to make a deposit to your Robinhood account is closed, or you’re unable to access it, this may lead to a delay in transferring funds from your Robinhood to the bank account.
To change the bank account details, you’ll need to contact Robinhood’s support with the following information to complete the process:
- A description of the reason why you are withdrawing funds to a new bank account instead of the one you deposited the funds from.
- An identity document- your driver’s license, national ID card, international passport, or any other means of identification.
- Bank statements to show that you own both bank accounts.
- The details of the bank account you want to transfer the funds to.
- The amount you want to transfer.