How can I withdraw money from Robinhood?

How can I withdraw money from Robinhood?

One of the most common fears about trading online is, can I get my money back? And even if that's a given, will I face any extra costs, delays, or difficulties as I try to withdraw my uninvested funds?

Robinhood is a trustworthy broker that honors all withdrawal requests, but the process is not the most convenient. Read on to learn about potential costs, waiting times, or restrictions.

You can withdraw funds from Robinhood at any time.

Let me start with the good news: Robinhood is considered a legit and trustworthy broker, where your money is in good hands, and you can withdraw it whenever you want to.

How to tell if a broker is trustworthy? In our view, a broker is considered legit if its operations are overseen by at least one top-tier regulator.

You can only withdraw funds via bank transfer.

So how to withdraw funds from Robinhood? At Robinhood, you can only withdraw your money using a bank transfer. This puts Robinhood at a slight disadvantage over brokers that also offer withdrawal to credit/debit cards or electronic wallets such as PayPal.

Remember, you can only withdraw funds to bank accounts that are in your name.

Withdrawing money from Robinhood - a step-by-step guide

It usually takes no more than 1-2 days to receive your funds.

Whatever method you use, withdrawals from a brokerage account are rarely instant. That said, when I tested withdrawal at Robinhood, it took just one business day for the money to reach my account. That's about as good as it gets in this business.

Strict withdrawal times are not the only factor to keep in mind when you need to retrieve money from your broker account. The most important thing is that you can only withdraw uninvested cash-out from your Robinhood brokerage account. If all of your funds are invested, you need to close some or all of your positions first to make the necessary amount of cash available in your broker account.

Converting your assets to cash often takes additional time. For example, if you sell a stock, it will take another day (or most likely two) for the transaction to settle and for the cash proceeds to appear in your brokerage account.

So what I would normally do is think ahead depending on how urgently I needed the money. For example, if I needed $1,000 cash on Monday and it was still all tied down in stocks or some other assets at Robinhood, I would probably

log in to my Robinhood account as much as a week earlier, to sell stocks or other assets worth $1,000 (or maybe a bit more to cover any withdrawal fees; see next chapter).

Then I would check back a day or two later (around the middle of the week) to see if the asset sale has been completed and if the cash has appeared in my broker account.

If yes, I would then initiate the withdrawal, so that the money arrives in my personal bank account or on my card (whichever is applicable) by next Monday at the latest.

Basic withdrawals cost $0, but there may be exceptions.

While depositing money to a brokerage account is free in most cases, this is not necessarily always true for withdrawals. But I have good news: basic withdrawal at Robinhood is free of charge. See the table below for details and possible exceptions, and also how Robinhood's fees compare to some of its immediate competitors.

Conversion fees

In addition to any withdrawal fees, you should also be aware of potential conversion fees. These usually apply if your bank account or card is denominated in a different currency than the funds you are withdrawing from your broker.