How to Cash Out on Robinhood: A Comprehensive Guide
Robinhood is one of the most
popular trading platforms today, offering a user-friendly interface and
commission-free trades. However, once you've made your trades and watched your
investments grow, the next logical step is figuring out how to withdraw your
funds. In this guide, we will walk you through the process of how
to cash out in Robinhood effectively, ensuring that you understand
every step involved. We will cover everything from selling your stocks to
transferring your money into your bank account.
Understanding the
Cash Out Process on Robinhood
Before diving into the specifics, it's important to understand the
general process of how
to cash out of Robinhood. When you sell stocks or other assets, the
proceeds from those sales become available as "withdrawable cash."
This cash can then be transferred from your Robinhood account to your linked
bank account.
Step 1: Selling
Your Stocks
To begin the cashing out process, you first need to sell the
stocks or other assets you hold in your Robinhood account. Here's how:
- Open the Robinhood App: Start by
launching the Robinhood app on your mobile device or by logging in through
the Robinhood website.
- Go to Your Portfolio: Navigate to
your portfolio, where you can see all the stocks and assets you currently
own.
- Select the Stock to Sell: Click on the
stock you want to sell. This will bring up detailed information about the
stock, including its current market price.
- Choose the Sell Option: Tap on the
"Trade" button, then select "Sell."
- Enter the Amount to Sell: Decide how
many shares you want to sell or choose to sell the entire position. You
can either sell by dollar amount or by the number of shares.
- Confirm the Sale: Review your
sale details and confirm the transaction. The sale proceeds will be added
to your account as "withdrawable cash" once the trade is
settled.
Step 2: Waiting for
the Trade to Settle
After you've sold your stocks, the next step in how
to cash out stock on Robinhood is to wait for the trade to settle. In
the United States, stock trades typically take two business days to settle, a
period known as T+2. During this time, the proceeds from your sale are not yet
available for withdrawal.
Step 3: Withdrawing
Funds to Your Bank Account
Once the trade has settled, your funds are now available to withdraw.
Here's how
to get money out of Robinhood:
- Go to the Account Menu: Tap the
account icon in the bottom right corner of the Robinhood app.
- Select "Transfers": Under the
account menu, find and select the "Transfers" option.
- Choose "Transfer to Your Bank": This option allows you to move your withdrawable cash from
Robinhood to your linked bank account.
- Enter the Amount: Specify the
amount you want to transfer. You can withdraw the entire available balance
or a portion of it.
- Confirm the Transfer: Review the
details and confirm the transfer. The funds will usually take 1-3 business
days to appear in your bank account.
Step 4:
Understanding the Withdrawal Limits and Fees
When learning how
to pull money out of Robinhood, it's important to be aware of any
limits or fees associated with withdrawals:
- Withdrawal Limits: Robinhood
has a daily withdrawal limit of $50,000. If you need to withdraw more than
this amount, you'll have to do so over multiple days.
- Withdrawal Fees: Robinhood does not charge fees for standard
ACH transfers to your bank account. However, instant transfers, which
allow you to access funds immediately, may come with a fee.
Step 5: Tax
Implications of Cashing Out
One aspect that can't be overlooked when considering how
to cash out stock on Robinhood is the tax implications. When you sell
stocks, you may be subject to capital gains taxes. The rate at which you're
taxed depends on how long you've held the investment:
- Short-term Capital Gains: If you've
held the stock for less than a year, your gains will be taxed at your
ordinary income tax rate.
- Long-term Capital Gains: If you've
held the stock for more than a year, you'll benefit from a lower tax rate
on your gains.
It's crucial to consult with a tax professional or use tax software to
understand your obligations when cashing out investments.
Frequently Asked
Questions (FAQs) About Cashing Out on Robinhood
How Long Does It
Take to Cash Out on Robinhood?
Typically, it takes 1-3 business days for funds to transfer to your bank
account after you initiate a withdrawal. The initial sale of your stocks
requires a 2-day settlement period before you can access the funds.
Are There Any Fees
for Cashing Out on Robinhood?
No, Robinhood does not charge any fees for standard ACH withdrawals to
your bank account. However, if you choose to use an instant transfer, there may
be a fee.
Can I Cash Out on
Robinhood Without Selling My Stocks?
No, to cash out your investments on Robinhood, you must first sell your
stocks or assets. Once sold, the proceeds become withdrawable cash.
What Is the Maximum
Amount I Can Withdraw from Robinhood?
Robinhood allows you to withdraw up to $50,000 per day. If you need to
withdraw more, you will have to do so in separate transactions over multiple
days.
Is It Safe to Cash
Out on Robinhood?
Yes, Robinhood is a registered broker-dealer and a member of the
Financial Industry Regulatory Authority (FINRA) and the Securities Investor
Protection Corporation (SIPC), which provides protection to your assets up to a
certain amount.
How do i
withdraw money from Robinhood?
Here are the steps to follow to withdraw
money from Robinhood to bank account on your phone:
·
Tap “Account”
·
Tap “Transfers”
·
Select “Transfer to your bank” (or “Transfer to
debit card”)
·
Select your bank account (or debit card)
·
Enter the amount you'd like to withdraw.
·
Confirm the amount and details.
·
Tap “Transfer”
Conclusion
Cashing
out on Robinhood is a straightforward process, provided you
understand the steps involved. Whether you're looking to sell a portion of your
portfolio or cash out entirely, Robinhood offers a user-friendly platform to
manage your investments. By following the steps outlined above, you can ensure
a smooth and efficient withdrawal process, allowing you to access your funds
when needed
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