Robinhood has revolutionized stock trading by offering commission-free trades and a user-friendly platform. However, understanding how to convert your investments back into cash is crucial. This guide will walk you through the process of selling your stocks and withdrawing the proceeds to your bank account, ensuring a smooth and informed experience.
Selling Your Stocks
To begin the cash-out process, you’ll need to sell your stocks. This can be done through the Robinhood app or website. Navigate to your portfolio, select the stock you wish to sell, and choose the “Sell” option. Enter the number of shares you want to sell and confirm the transaction. Once the sale is executed, the proceeds will appear as “Buying Power” in your account.
Understanding the Settlement Period
After selling your stocks, the funds are not immediately available for withdrawal. Robinhood follows a standard settlement period of two business days, known as T+2. This means if you sell your stocks on Monday, the funds will be available for withdrawal on Wednesday. During this period, the proceeds are considered unsettled and cannot be transferred to your bank account.
Withdrawing Funds to Your Bank Account
Once the settlement period has passed, you can initiate a withdrawal. In the Robinhood app, tap the “Account” icon, select “Transfers,” and then choose “Transfer to Your Bank.” Enter the amount you wish to withdraw and confirm the transaction. The funds will typically arrive in your bank account within 3 to 5 business days, depending on your bank’s processing times.
Instant Withdrawals
Robinhood offers an instant withdrawal option for eligible accounts. This allows you to transfer funds to your debit card or bank account immediately, for a fee. The fee is 1.75% of the transfer amount, with a minimum of $1 and a maximum of $150 per transaction. Keep in mind that instant withdrawals are subject to daily limits and may not be available for all accounts.
Withdrawal Limits and Restrictions
Robinhood imposes certain limits on withdrawals. You can make up to five withdrawals per business day, with a maximum total of $50,000. Additionally, if you’ve recently deposited funds into your account, you may need to wait up to five business days before those funds are available for withdrawal. It’s also important to note that if your account has any restrictions or holds, you may be unable to withdraw funds until those issues are resolved.
Special Considerations for Referral Stocks
If you’ve received free stocks through Robinhood’s referral program, there are specific rules regarding their withdrawal. After selling a referral stock, you must keep the cash value of that stock in your account for at least 30 days before you can withdraw the proceeds. This policy is in place to prevent abuse of the referral program.
Conclusion
Cashing out your stocks on Robinhood involves a few key steps: selling your stocks, waiting for the settlement period to pass, and then initiating a withdrawal to your bank account. By understanding the process and any associated fees or restrictions, you can ensure a smooth and timely transfer of your funds.
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