Robinhood poses an excellent broker in stock and related investment. It functions just like your bank or any other brokerage company like Ameritrade, ETrade, etc.
The platforms are instructed by the government to obtain personal information and SSN about their customers to keep a file for each year of transaction or earning.
You’ve learned about Robinhood exchange and their free buying and selling, you then decided to create an account and enjoy this benefit as well while it lasts.
Yes, it’s true, buying and selling are without charge and they offer accessible stock for registering a new account.
Still, you can’t tell why they require your Social Security Number while setting up your account. This is your private property, but why do they ask for it?
The simple explanation is that every merchandiser, not just in Robinhood, is expected to have an SSN according to the law passed by the United States government.
Away from that law by the US administration, obtaining this data is also a commendation strategy for self-operating institutions in the Financial sector, such as the “Financial Industry Regulatory Association” – FINRA.
Why Does Robinhood Need My Social Security Number?
There are about three major purposes for requiring you SSN, they are:
1. Keeping Records
Securities & Exchange Commission – SEC expects dealers to obtain confidential information about anybody who wants to register an account; this information is your name, date of birth, address, net worth, I’d card issued by the government, and your social security number.
In a real sense, it’s not right for a broker to ask for your SSN but to own any financial servicing account, you must provide the broker with this confidential information about you.
2. As A Money Laundering Preventive Strategy
The USDT and SEC in combination enforced the customer verification rule. This rule requires all financial organizations to take your Social Security Number before you can open an account.
It expects exchangers to have methods of verifying the originality of anybody creating an account and also specify that the person is not on any list of suspects or wanted terrorists.
This goes ahead to combat “money laundering” which is a fundamental funding pattern of terrorist groups.
3. To Report Your Profit To IRS
Keeping an “SSN” on record enables Robinhood to give tax-associated information to users and the “IRS.” Robinhood users get tax records like 1099, and the “IRS” obtains information relevant to point out tax avoidance.
Main Reason Behind SSN number Because Robinhood is required to report any profit that your investments generate to the IRS.
Note: Individuals can still attain their set financial goals and targets with this income track system.
Can You Trust Robinhood With Your Social Security Number?
Every information you provide Robinhood stays in a backend where no one has access to it; So the answer to this question is Yes!, you can confide in Robinhood with sensitive information about you (Age, SSN, name, address, etc), your money and stocks. Robinhood has built a strong network of security you would never imagine it has, this kind of security is only applicable to gigantic financial institutions.
Also Read: What Happens if Robinhood Shuts Down?
What Do I Do If Robinhood Won’t Accept My Social Security Number?
Robinhood can bounce back your SSN due to several reasons, either a misspelled name, incorrect SSN, or transfer of account.
There is a form called the “1099 form”, It is a form used to document “non-employment income” which includes dividends spent from acquiring stock or profit that you received as a sovereign contractor.
When Robinhood rejects your SSN, it is recommended you pick this form and check the inaccuracies in it then apply for a corrected “1099” which you will be able to see in 1-2 weeks following the correction day.
If your social security number is incorrect follow the steps below
How To Correct Your Social Security Number?
If your SSN on the 1099 form is inaccurate do this;
Steps to Correct Your Social Security Number:
Step 1: Download an empty “W-9 order” from the Internal Revenue Service (IRS) website,
Step 2: Fill the form with the correct.
Step 3: Send the correct “W-9 order” to Robinhood support service ASAP.
Step 4: Immediately you get the corrected copy of the “1099 form”, repeat your account opening process with the corrected Social Security Number.
Also Read: Fix: Robinhood Not Enough Buying Power
How Do I Use Robinhood Without A Social Security Number?
It is impossible to use the Robinhood exchange without an SSN because there is no alternative to it.
You must provide a valid SSN document before you can proceed to open an account with Robinhood; failure to do this, your account opening procedures will not be completed.
Take note: The document that shows your tax payment status (Tax Identification Number) is not accepted, as this cannot stand in place of your social security number. Summarily, no SSN, no Robinhood account.
Conclusion
Social Security Number is a must for every Robinhood enthusiast. To own an account with them, you must provide it, following the law issued by the US government which governs every financial institution in the United States.
This SSN qualifies you as a citizen and permanent resident of the state, so non-citizens are advised to obtain the social security number to perform any monetary transaction.
