Finance

Robinhood Unsettled Funds | What Can These Help You With and How?

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Users who are new to Robinhood are often confused about the usefulness of unsettled funds in their account and even what they actually mean.

Let’s talk a bit about Robinhood unsettled funds, what they are, and how you can put them to good use!

What are Robinhood Unsettled Funds – In a Nutshell

In simple words, unsettled funds are the stocks that are pending in the sale transactions. According to the rules and regulations set forward by SEC, investors or traders need to wait a period of time before they can receive these funds.

Until then, they would be known as unsettled funds Robinhood and can serve you in a number of ways.

Note! It is not possible to withdraw unsettled funds using a bank account. This can only be done once the funds are settled and typically that can take up to 2 days.

This means the unsettled funds are just like pending bank transactions that haven’t been settled yet.

Since you have not technically obtained the amount, it is termed as “unsettled” but unlike the money that is being transferred to your account can not be used, these can be utilized in an interesting manner.

Two main reasons for why you might be seeing these funds in your account are:

  • You just transferred some amount from your bank to Robinhood but the transaction is not complete yet.
  • You sold a stock in Robinhood and the money from the sale is pending or it hasn’t yet been delivered to your account.

Robinhood accountholders almost always have some funds of this sort associated to their name so this is not something to worry about.

The amount you have will vary from time to time depending on how frequently you trade or invest in stocks.

Robinhood Unsettled Funds Be Helpful In Trading and Investment

You heard that right! These funds can be utilized in trading. Although access to Robinhood funds is generally restricted, users with updated accounts can easily fetch these up to a certain limit.

After which they are free to use these to make more stock purchases.

This feature is open to Robinhood accountholders with margin accounts such as Instant or Robinhood Gold. Those who have Cash account need to forget about using their unsettled funds anywhere in the near future.

In a nutshell, here’s what Robinhood accountholders can do with their unsettled funds:

  • Robinhood Instant accountholders are allowed to withdraw $1,000 from unsettled funds.
  • Robinhood Gold accountholders are allowed to withdraw more than $1,000 from unsettled funds.

The important point here is that each fund has a limit which can be employed. As an investor, you should be aware of it before finalizing any transaction.

The restriction of a limit on withdrawing amount is applicable to Gold accountholders as well although it is a bit higher as compared to other types of accounts.

Moreover, Gold accounts carry an additional monthly fee that is not the case with Cash or Instant account. You need to keep these expenses in mind at all times.

Note! Although Robinhood Gold account comes at a higher cost, it offers additional benefits. These would include professional research reports and useful insights on how to make better investments in the future.

Attention! You Must Ensure That You Have Enough Buying Power

With Robinhood, buying power refers to the amount you have with which you can make a trade.

Your account would notify you with “not enough buying power” when you lack the funds to purchase the stock that you are are trying to buy.

It could also mean that the funds are currently unusable so you can try later.

Most of the times the issue of not being able to access the funds is faced by those with standard account. You can try to update your account to Gold or Instant and that would take care of the problem once and for all.

How To Access These Funds Through Your Account

All Robinhood accountholders with Instant or Gold accounts can immediately access the unsettled funds that become available from a deposit or a stock.

Luckily, there is no waiting period involved!

However, keep in mind that regardless of the type of the account that you own, it is not possible to withdraw these funds by any means. You have to utilize them directly from the account by making an investments or purchasing other stocks.

Take-Home Message

Unsettled funds in Robinhood account is something you can make use of quite efficiently. The amount you have there will determine your buying power. That, in turn, would decide what you can do with these funds.

All types of Robinhood unsettled funds can be employed in trading and investment. However, it is ideal to update your account if you wish to get access to the money immediately whenever it becomes available.

Frequently Asked Questions for Robinhood Unsettled Funds

When will my unsettled funds become available?

Typically, it can take up to 2 or 3 days with your bank account and trade.

If the transaction took place on a holiday or the weekend then the transfer would begin once the non-business days have passed.

Is it possible to withdraw unsettled funds?

It is not possible to withdraw unsettled funds using a bank account. This can only be done once the funds are settled and typically that can take up to 2 days.

What is the limit for Robinhood accountholders to withdraw funds?

Robinhood Instant accountholders are allowed to withdraw $1,000 from unsettled funds. Robinhood Gold accountholders are allowed to withdraw more than $1,000 from unsettled funds.

Why am I seeing unsettled funds in my account?

Two main reasons for why you might be seeing these funds in your account are that you just transferred some amount from your bank to Robinhood but the transaction is not complete yet or you sold a stock in Robinhood and the money from the sale is pending or it hasn’t yet been delivered to your account.

What is Robinhood buying power?

With Robinhood, buying power refers to the amount you have with which you can make a trade. Your account would notify you with “not enough buying power” when you lack the funds to purchase the stock that you are are trying to buy.