How to Sell Stock on Robinhood and Cash Out

 

Selling stocks on Robinhood is a straightforward process, but many investors might wonder how to ensure the money gets transferred to their bank account quickly and efficiently. In this comprehensive guide, we'll walk through the step-by-step process of selling stocks on Robinhood and withdrawing your cash, making sure you avoid common pitfalls along the way.

How to Sell Stock on Robinhood and Transfer to Bank

Selling stock on Robinhood and transferring the proceeds to your bank involves a few simple steps. Here's a breakdown:

1. Log into your Robinhood account on the app or website.
2. Navigate to your "Portfolio" section, where you'll see all the stocks you own.
3. Select the stock you wish to sell by clicking on it.
4. Press the “Trade” button, then select "Sell".
5. Enter the number of shares you wish to sell or choose to sell all shares if desired.
6. Review your order and confirm the sale.
7. After your stock is sold, the funds from the sale will appear as "Buying Power" in your Robinhood account.
8. To transfer this cash to your bank, go to the "Account" tab (the person icon), select "Transfers", and initiate a bank transfer.

The transfer to your bank can take 3-5 business days, depending on your bank's processing time.

I Sold Stock on Robinhood, Where is My Money?

After you sell stock on Robinhood, you might wonder where your money is or why it hasn’t appeared in your bank account yet. Here’s what typically happens:

• Settlement period: The sale of stocks follows a T+2 rule, meaning the funds from a stock sale take two business days to fully settle. This is standard across all brokerage platforms.
• Buying Power: Once your sale is complete, the proceeds will show up as "Buying Power" in your Robinhood account almost instantly. However, this does not mean the money is immediately available for withdrawal.
• Withdrawal: After the settlement period, you can initiate a transfer to your bank, which can take an additional 1-3 business days to process.

If you still don’t see your funds after this timeline, ensure your bank account information is correct and contact Robinhood’s customer support.

How to Sell Stock on Cash App

Cash App also offers stock trading, but selling stocks on this platform is slightly different from Robinhood. Here's how you do it:

1. Open the Cash App and go to the “Investing” tab.
2. Choose the stock you want to sell.
3. Tap the "Sell" button and select the amount or number of shares you want to sell.
4. Confirm your sale by tapping the “Confirm” button.
5. Your sale will process, and the funds will be added to your Cash App balance.
6. You can then transfer the funds to your bank.

Just like with Robinhood, stock sales on Cash App follow the T+2 settlement rule, so your funds might not be available for withdrawal immediately.

Why Can't I Withdraw Money from Robinhood After Selling?

If you find yourself unable to withdraw money from Robinhood after selling stocks, here are some possible reasons:

1. Settlement period: As mentioned earlier, stock sales take two business days to settle. You cannot withdraw the proceeds until the settlement is complete.
2. Bank verification: If your bank account hasn’t been verified yet, Robinhood may place restrictions on withdrawals. Ensure your bank account is linked and verified within the app.
3. Transfer limits: Robinhood has daily transfer limits. You can only withdraw up to $50,000 per day.
4. Pending transfers: If you’ve initiated a withdrawal but it hasn’t reached your bank account, it might still be processing. Check your withdrawal history for updates.

How to Sell ETFs on Robinhood

Selling ETFs (Exchange-Traded Funds) on Robinhood is very similar to selling individual stocks:

1. Go to the "Portfolio" section of the Robinhood app.
2. Select the ETF you want to sell.
3. Click on the “Trade” button, then choose "Sell".
4. Enter the number of shares or the dollar amount you wish to sell.
5. Review your order and click "Confirm".

Just like stocks, the proceeds from ETF sales will be added to your Buying Power, and you’ll need to wait for the settlement period before you can withdraw the funds.

How to Withdraw Money from Robinhood Immediately

If you need to withdraw money from Robinhood immediately, there are some limitations. Robinhood offers instant deposits when transferring money into the platform, but for withdrawals, the process is not instant due to settlement periods and bank transfer times.

However, here are some tips to speed up the process:

• Ensure your bank account is verified and linked correctly to your Robinhood account.
• You can enable Robinhood Gold, which allows you to access up to $50,000 of your settled funds quicker, although instant withdrawal is not available.

If you need access to your funds immediately, consider planning ahead and initiating your sale and transfer in advance.

How to Sell Specific Shares on Robinhood

If you own multiple lots of a particular stock and want to sell specific shares, Robinhood currently does not allow you to specify which lot to sell from. Instead, Robinhood uses the FIFO (First In, First Out) method. This means that the first shares you purchased are the first ones to be sold.

If you have tax considerations or prefer to sell specific lots, you might need to use a different brokerage that allows lot selection for sales.

Can Robinhood Sell Your Stock Without Permission?

Robinhood cannot sell your stock without permission unless specific circumstances arise, such as:

1. Margin call: If you’re using Robinhood’s margin account (through Robinhood Gold), and the value of your portfolio drops significantly, the platform may initiate a margin call, forcing the sale of stocks to cover the loan.
2. Regulatory requirements: Under certain legal conditions, like fraud detection or unusual account activity, Robinhood might restrict or close positions, though this is rare.

In general, you remain in control of your stock transactions, and Robinhood will not sell your stocks without your explicit direction.

How to Transfer Buying Power from Robinhood to Bank

Buying Power on Robinhood is the available funds you have to purchase stocks. If you want to transfer this Buying Power (cash) to your bank account:

1. Go to the "Account" tab in the Robinhood app.
2. Select “Transfers” and choose the "Transfer to Your Bank" option.
3. Enter the amount of cash you wish to transfer.
4. Confirm the bank transfer.

Note that if your Buying Power is the result of recent stock sales, you may need to wait for the settlement period before you can withdraw the funds.

Conclusion

Selling stocks on Robinhood is an easy process, but understanding the settlement period and how to withdraw your funds to your bank account is key. Whether you're selling stocks, ETFs, or navigating the Cash App for stock sales, always make sure you’re aware of the settlement timelines, potential restrictions, and how to manage your funds efficiently.