Robinhood users usually wonder how to transfer buying power from Robinhood to bank account. The process isn't difficult but there are some things you should take into consideration. Continue reading to know.
Robinhood is a popular financial application that lets you buy and sell (trade) cryptocurrency Bitcoin, Ethereum, and Dogecoin. Investors may still use Robinhood to buy stocks, options, and ETFs.
There are many trading and stock exchange apps on the market but Robinhood stands out to be the best because it offers these trading features for free — meaning, you get to trade with the app without paying any commission.
You cannot trade without capital funds and therefore, you will need to add money to the platform. The most common way of topping up a Robinhood account is with a bank account. However, you can still add money to Robinhood without a bank account.
Once you are done adding money to your account, you can now start buying and selling stock which is also known as trading on Robinhood. Your funds must settle after a sale before you may withdraw them to your bank account.
The trade date plus two trading days (T+2) is the settlement period, which is also known as regular-way settlement. On the third day, those amounts will be added to your buying power and will be available for withdrawal.
Once your cash is available for withdrawal, you can then transfer the money from Robinhood to your bank account.
In most cases, you might have a larger part of your money on Robinhood available as buying power. What if you want to withdraw your buying power? Can you transfer buying power to your bank account? That's what we are going to see today.
In this guide, I will show you how to transfer buying power from Robinhood to a bank account.
Table of Contents
What is Robinhood Buying Power?
The amount of money you have to buy stocks, options, or cryptocurrency is referred to as buying power.
Stock and options trading is done through your Robinhood Financial brokerage account, while cryptocurrency trading is done through a separate Robinhood Crypto account. In the app or on Robinhood Web, you can see all of your buying power in one spot.
What to Know Before Opening an Account and Trading with Robinhood
There are multiple stocks available on the market today that you can purchase. Robinhood, on the other hand, has positioned itself as the sole free stock trading app available.
There are a plethora of stock trading apps available nowadays from a variety of sources. Investing in and selling stocks is quickly becoming one of the most profitable businesses on the globe.
However, you should be aware of the dangers involved in trading before opening an account with Robinhood or any other similar trading app. Stock prices rise and fall dramatically, so you should always be prepared for the unexpected when it comes to trading.
For example, in its early days, Bitcoin was sold for as little as $0.0008 to $0.08 per coin in July 2010—as for the present date, one Bitcoin is worth $43,841.40 and its price keeps on fluctuating as the market value changes.
Getting Started and Opening a Robinhood Account
To be eligible to open a Robinhood account and make use of all of its fee-free trading features, you must meet a number of requirements.
The following are the requirements to open a Robinhood account:
- You must be 18 years of age or above
- Must have a Social Security Number (SSN)
- Must have a U.S. residential address (Active U.S. military personnel stationed abroad are exempted)
- Be a U.S. citizen, have a valid U.S. visa, or a U.S. permanent resident.
Once your account is established, you can now start trading with the Robinhood mobile app with your available buying power. Huh! Buying Power; let's see how you can transfer your buying power from Robinhood to the bank.
How to Transfer Buying Power from Robinhood to Bank Account
Under normal circumstances, buying power is the money you can use to buy stocks, options, or cryptocurrencies for trade. The money is not meant to be withdrawn as it serves its purpose.
However, you cannot directly transfer your buying power from Robinhood to the bank. You will have to sell your stocks, options, or crypto and wait for the money to "settle" before you can transfer it to your bank account.
The settlement period is usually 2 to 3 business days from the third day, you can now easily transfer the money from Robinhood to your bank account.
Withdrawing Buying Power from Robinhood to Bank
Following what we mentioned above, here is how to transfer buying power from Robinhood to bank:
- Buying trading assets with your buying power and selling them
- Wait for the money to settle which usually takes 2 to 3 days
- On the 3rd day, Open your Robinhood app and click on the Account profile at the right bottom corner
- Now click on "Transfers" and select "Transfer to Your Bank"
- Choose the bank account where you'd like to transfer the funds
- Enter the amount you'd like to withdraw or transfer
- Lastly, click "Submit" to transfer the money.
There is it, you just transferred your buying power from Robinhood to your bank account.
Why Can't I Withdraw My Buying Power on Robinhood?
Your money (buying power) on Robinhood becomes "withdrawable cash" when it has fully settled which generally takes 2 to 3 days. From there, you can easily withdraw your money to your bank account. However, the period required for cash settlement is the date of trade plus two more trading days generally represented as T+2.
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Final Thoughts on How to Transfer/Withdraw Buying Power from Robinhood to Bank
Buying power is the amount of money available to buy stocks and crypto for trade. You may not be able to withdraw this buying power directly but however, but you might be able to withdraw the buying from Robinhood to the bank with the clear Robinhood bank withdrawal process.
However, you will need to wait for your funds to settle before you can withdraw them which is generally T+2 days (trade period + 2 more days).