Robinhood users can have three types of accounts, namely, Robinhood gold, instant, or cash account. For Robinhood gold and instant accounts, instant Settlement is one of the most loved features offered to the users.
Instant Settlement allows you to have access to a few instant funds directly from the savings and use them for trading stocks.
Once you start using your account on Robinhood, by default your account is of Instant type with some initial money deposit which can be utilized to kick start your trading on Robinhood.
Thus, providing you access to some instant assets for trading in stocks, mutual funds, EFTS, and many more.
The major advantage of having access to these instant benefits is that you can carry out your trade and fetch the resources right away.
What Is Instant Settlement In Robinhood?
Usually, the time is taken for the transaction to be successful ranges from 3-4 days. However, if you have Robinhood gold or an instant account, you have an instant Settlement feature.
Robinhood Instant Settlement allows you to utilize the profits you earned from selling stocks on the same day of the transaction. Initially, your account is credited with thousand dollars which you can instantly use for trading stocks.
Instant Settlement is a very beneficial feature of the Robinhood app to ensure that the users get quick access to the profit they earn.
The basic form of trading of crypto, EFTs, etc. Require at least 3 days to complete the procedure. However, in the Robinhood instant account features, you can easily complete these processes in a much lesser time.
However, banking holidays can vividly affect the Settlement timings on the Robinhood app. Also, the users must remember that instant Settlement is only available for instant and gold accounts and not for cash accounts on Robinhood.
However, you can easily switch from one kind of Robinhood account to another at your convenience.
Also Read: How to Set Stocks/ Crypto Alerts on Robinhood?
How To Turn Off Instant Settlement In Robinhood?
Instant Settlement is one of the excellent features of the Robinhood premium account. However, many users find the need to turn off the instant Settlement option on their Robinhood account.
Once you successfully login into your account, go to the menu and then turn to invest option then look for a day trading option where you can easily turn off the instant Settlement of your account
You can follow the given steps in case you wish to turn off instant Settlement in Robinhood.
Steps to Turn Off Instant Settlement In Robinhood:
Step 1: Go to the profile of your Robinhood instant or gold account
Step 2: Once you successfully login into your account, go to the menu and then turn to invest option
Step 4: This page will redirect you to a different page where you can easily turn off the instant Settlement of your account
These steps can easily help you to turn off your instant Settlement. However, you must have passed certain criteria so that you can turn it off.
The Robinhood allows you to turn it off if you have no deposit bills due or have not traded in the last 3 days. Thus, if you wish to turn it off, you need to stop trading 3 days prior.
Why Can’t I Turn Off Instant Settlement In Robinhood?
It can be a technical glitch from the server-side. Turning off instant Settlement in Robinhood is a simple procedure. However, if you have followed it and are still not able to turn off the instant Settlement option, it can be a glitch and you need to wait for some time.
The other case can be if Robinhood does not allow you to turn off the instant Settlement option on your Robinhood account.
In such a case, it must be something with your account. Robinhood does not allow you to turn off the instant Settlement option if you have unpaid deposits in your account.
If there is any bill due, make sure you settle it before you try to turn it off. Also, another reason can be that you trade often.
If you have made even a single trade in 3 days Or less before you attempt to turn it off for your Robinhood account, it will not happen.
You can’t turn off instant Settlement because you have recent or pending orders
Robinhood gives you at least 3 days to be able to turn off the instant Settlement option for your gold or instant account. There must not be any trade, purchase, or selling on your gold account for 3 days Or more when you try to turn it off.
For the traders who put different orders on different stocks, it is important to note that there must be no pending orders on any stocks when you try to turn off the instant Settlement option.
Any sort of pending order can not be accessed Or processed when you try to turn off the instant Settlement option for your premium account on Robinhood.
Also Read: Robinhood Margin Maintenance
What Happens If You Turn Off Instant Settlement On Robinhood?
Once you switch to a cash account by turning off the instant Settlement option for your account, you will not be able to get instant transactions of the trades you make in a day.
Instant allows you to get transactions processed in a day which further is beneficial to the traders. However, if you turn it off, it will take the usual 1-3 days for the app to complete your processes and trades.
You can either convert your instant account to a gold one or a cash one. If you decide to change your instant account to a gold account, you will get this feature added with a few more.
However, if you switch it to a cash account, it will not be available and hence, you will have to wait for the usual time process to be completed.
Do You Have To Wait For Funds To Be Settle On Robinhood?
Robinhood allows you to trade stocks and crypto alike. Also, when you trade on Robinhood, you can not instantly transfer these funds to your savings account. The process of funds settling in your account is different.
Majorly, the traders trading in stocks and these types of securities, have to wait for about two days for their funds. It takes around 48 hours during the business days for Robinhood to make your trade profits transferable.
Robinhood allows you to access your funds on the third day of the process. Also, Robinhood allows only a fixed number of transactions in a day.
The maximum number of transactions that you can make in a day is limited to 5 by the Robinhood app. The total capital generated in these transactions must be less than fifty thousand dollars.
If you want instant access to your funds you can join the premium accounts of Robinhood and make your funds transferable within the day itself.
Also Read: How To Buy Warrants on Robinhood?
What Happens If I Trade With Unsettled Funds?
Robinhood takes a certain fixed amount of time to settle your funds if you are using a Robinhood cash account. During this day, the funds under the transaction or process of being settled are termed as unsettled funds.
You can use unsettled funds for easily buying certain securities right after one and another. However, it should be kept in mind that this can not be a part of the day trade.
In easier words, yes you can purchase certain securities with your unsettled funds but only if it does not fall on the same trading day. Because you can not use your unsettled funds for day trading on Robinhood.
How Long Does It Take For Unsettled Funds To Be Settle Robinhood
The minimum amount of time taken by Robinhood to convert your unsettled funds to settled funds on your account is two days. This fine includes two business days starting from the day you put in your trade.
Thus, it can be largely affected if you make a trade at the end of the week as if you make a trade on Friday, it will take more than 2 days for Robinhood to settle it.
This is because only the business days and working days are considered in this period for settling your funds. Therefore, it can range from 2 days to 3 days depending on the day you trade.
How Do You Do Day Trade With Unsettled Funds?
You can do day trading on Robinhood for the trading of stocks and crypto. For the cash account holders on Robinhood, using their unsettled funds on day trading is not feasible.
They have to either wait for their funds to be settled or they can switch to gold or instant accounts. As for the gold and instant account holders, they can make day trades with the additional 1000 dollars they have in their instant account.
They can make up to 5000 worth of day trades using their gold and instant account on Robinhood. Only gold and instant account members of Robinhood are allowed to use their unsettled funds for day trading on the platform.
Also Read: How to Add Money to Robinhood Without a Bank Account?
Conclusion
Robinhood instant account allows you to do day trading and swing trading using three different accounts.
The instant account gives you access to instant Settlement of funds and also some instant initial funds to start your trading on the upper scale.
However, you can switch off this instant Settlement and change your account type as you require with time.
