Is Your Robinhood Account Restricted? Find Out Why and What to Do!
Discover why Robinhood accounts get restricted, how to lift restrictions, and tips on withdrawal issues in this comprehensive guide.
Why is my Robinhood account restricted?
Robinhood, a popular online trading platform, has gained widespread attention due to its user-friendly interface and commission-free trades. It has made investing more accessible to a broader audience, especially young and novice investors.
If your Robinhood account is restricted, you should contact Robinhood support to resolve the issue.
However, users sometimes encounter challenges when they find their Robinhood account restricted. Here are some common reasons your Robinhood account would get restricted:
Failed transfer from your bank account
If a transfer from your bank account to your Robinhood account fails, Robinhood may place restrictions on your account. This could be due to insufficient funds or incorrect bank account information.
Your account balance is negative
If your account balance becomes negative due to trading losses, margin calls, or fees, Robinhood may restrict your account until you deposit enough funds to cover the negative balance. You may also have $0 of withdrawable cash on Robinhood due to other reasons.
Control person
If you are considered a control person (an insider or affiliate of a publicly traded company), you may face trading restrictions due to regulatory requirements. This is to prevent potential conflicts of interest and insider trading.
Transfer reversals
If a transfer from your Robinhood account to your bank account is reversed, it may lead to account restrictions. This could happen if your bank rejects the transfer or if you initiate a reversal.
Incorrect or outdated information
If the personal information on your Robinhood account is incorrect or outdated, the platform may restrict your account to protect your security. You may need to update your personal information and verify your identity to resolve the issue.
Fraud inquiries
If Robinhood suspects fraudulent activity on your account, they may restrict it while conducting an investigation. This is to protect both you and the platform from potential financial losses and to maintain compliance with anti-money laundering regulations.
Account levies
It may be restricted if a government agency, creditor, or court order imposes a levy on your Robinhood account. This is usually the result of unpaid taxes, outstanding debts, or legal judgments.
How do I get out of 90-day restrictions on Robinhood?
The 90-day restriction is typically imposed when you violate certain trading rules, such as the pattern day trading (PDT) rule. This rule requires you to maintain a minimum account balance of $25,000 if you execute four or more day trades within five business days.
To lift the 90-day restriction, you can either wait for the 90 days to pass or deposit enough funds into your account to reach the $25,000 threshold. Remember that repeated PDT rule violations may result in longer restrictions or even account closure.
Why is my Robinhood account still restricted after 90 days?
If your Robinhood account remains restricted after the 90-day period, other underlying issues might be causing the restriction. These could include unresolved negative account balances, ongoing fraud investigations, or unaddressed account levies.
To resolve the issue, contact Robinhood's customer support team and inquire about the specific reason for the continued restriction. They will guide you on the necessary steps to resolve the problem and regain access to your account.
Why can’t I withdraw cash via a bank transfer using Robinhood?
1. Recently deposited funds: Robinhood requires a waiting period of up to five business days after depositing funds before you can withdraw them.
2. Pending or unsettled trades: You may need to wait for your trades to settle, which typically takes two business days, before withdrawing the proceeds.
3. Anti-money laundering (AML) regulations: Robinhood must adhere to AML regulations, which may impose withdrawal restrictions under certain circumstances.
Troubleshooting tips for withdrawal issues include:
1. Verify that your bank account information is correct and up-to-date.
2. Ensure you have sufficient settled funds available for withdrawal.
3. Check for any outstanding account restrictions or issues that might affect withdrawals.
How long do Robinhood restrictions last on day trading?
Day trading restrictions on Robinhood, such as the PDT rule, typically result in a 90-day restriction for first-time violations. However, if you continue to violate the rule, you may face longer restrictions or even account closure.
The duration of the restriction can vary depending on the specific issue and whether you take corrective action, such as depositing enough funds to meet the $25,000 minimum account balance requirement. In some cases, restrictions may be lifted sooner if you resolve the underlying issue.
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