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Last updated on September 25th, 2022 at 06:00 pm
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Investing has made a comeback in 2021 and Robinhood makes it accessible and easy for its users.
When investing money with Robinhood or depositing money into your Robinhood account to invest, you want it transferred instantly. The time to invest is NOW!
People use Robinhood because it takes many of the complications out of investing. It is said to be the Uber of stock investing, and has some pretty attractive features, including instant deposits.
Robinhood offers “instant deposits” but what actually happens is Robinhood loans you the money (for free) while your transfer is processing. So although you can trade with your deposited money immediately (up to a certain amount) that doesn’t mean that your transfer is instantaneous.
Money transfers will typically take a few days so while Robinhood loans you the money (or some of the money) to allow you to start trading immediately your bank won’t loan you the money when you transfer it back.
So when you transfer money out of Robinhood you will have to wait a few days (typically 3-4 business days) for the transfer to complete before the money will be usable in your bank account.
The word “instant” implies that in seconds funds can be available to you and while that may be true since Robinhood loans you the money when you make a deposit the transfer isn’t actually instant.
When is a Robinhood transfer instant and when does a transfer take time to reach its destination?
Robinhood Instant Deposits Are Easy, But Is It REALLY Instant?
It’s exciting to get $1000 of investment money deposited to your Robinhood account instantly once you initiate a deposit.
The catch is you MIGHT have access to these funds and the actual transfer from your bank can take up to 5 days so Robinhood actually loans you money in the meantime.
This can be confusing because it is inconsistent. You have to keep yourself accountable and be sure the money is there at the time of the actual withdrawal from your bank account.
So, to answer the question, Instant Deposits aren’t always instant and the amount of days the transfer takes to actually leave your account varies.
If you are just joining Robinhood you have to wait 5 days for your deposits to be transferred to your account to use the full amount (if it’s over $1,000).
Do not think that by initiating the transfer you will instantly have $1000 waiting for you to be transferred elsewhere. It will be accessible to you, but can only be used to invest on Robinhood.
That $1,000 can’t be taken out until it is fully transferred from your bank to Robinhood as well.
Are Bigger Instant Deposits With Robinhood Actually Instant?
GettingRobinhood Gold has its benefits and one of them is upgrading your instant deposit limit making higher funds available to you more quickly.
Keep in mind, you have to have a minimum of $2000 in your portfolio to make the upgrade.
When you are in need of a decent sum of money in an instant, the bigger instant deposits can be a deal breaker.
Robinhood Gold members have exclusivity where you can get up to $50,000 in deposits instantly depending on your account balance and status.
You get the money right away so that you can go take on that golden opportunity and start investing with a larger amount faster (without waiting for the transfer to process.
Those with Robinhood Gold have a great advantage because their instant deposit limit is higher so they can buy a stock or option a few days faster.
The Robinhood Gold instant deposit limits that apply to you will depend on your account balance. For example, you can have $30,000 instantly deposited if your portfolio is currently over $30,000.
The only discrepancy would be if you deposit more than what your instant deposit limit is. The additional deposit above the instant deposit limit can take up to five business days to show (the actual time frame a transfer takes).
You can increase your instant deposit limit by increasing your account balance on Robinhood.
It’s a tier system so you have to add a specific amount to your account to ensure that you reach the number you are looking to be able to deposit.
Risks To Avoid With Robinhood Instant Deposits
If there are any red flags on your account, then your access to instant deposits can be taken away.
Your instant deposit status is based on your pending transfers to and from the account.
Robinhood wants to ensure that you are a good investment so if you commonly have deposits that are settled then you stay in good standing.
If you are restricted and your instant deposit privileges get removed, they will be available once you settle the score with Robinhood or speak to their support team.
Are Instant Withdrawals Possible With Robinhood?
You cannot withdraw funds that have not settled within the settlement period which is the trade date, plus two trading days.
Even if you have made the deposit, it cannot be withdrawn unless it has actually landed into the account. You can withdraw your earnings on the third day.
The withdrawals are free, but it does take at least two days to make a withdrawal.
Withdrawals on Robinhood are not instant. Typically the money that you withdraw from your Robinhood account will take 3-4 business days before it is deposited into your bank account.
It takes even longer if you are trying to withdraw and place funds in a different bank account than the one that you originally signed up with.
Sixty days after making a deposit, you might have to input additional information to withdraw funds into an alternate bank account.
If your account becomes restricted for any reason, then you cannot make a withdrawal without speaking to Robinhood’s support team.
Phone tag with the Robinhood support team or scouring their website does not make withdrawals instant!
If you have a Robinhood Debit card you can go to an ATM to withdraw cash or by asking for cash back at participating vendors.
The debit option is also available in a mobile wallet. That IS instant as long as funds are available to cash out.
With their debit card, you cannot use instant deposits for withdrawals, debit card purchases, or transfers. You can only use instant deposits to make trades.
The Robinhood Instant Transfer Experience
Many people honestly think that Robinhood is a fantastic app and that it scores higher on their list than other stock and trading apps like Fidelity. Personally I am one of those people that prefers the Robinhood dashboard to other mobile trading apps.
One prior common complaint though is that there is a long delay for instant transfers and deposits to become available for stock trading. It used to take up to a week!
Six years ago, Robinhood’s magic number was 3. It took 3 business days to move funds in, 3 business days for funds to clear after a sale, and 3 business days to transfer out.
It might sound disenchanting, but there are other apps that take weeks for money to move.
They ditched the 3 business day waiting period because they knew that their consumers were unsatisfied. Patience is not always the name of the game when it comes to investing.
Today, an instant $1000 goes to the person who is making a deposit into Robinhood. That $1,000 is actually a loan while they are waiting for a deposit to clear. Although many people don’t realize it is a loan since there are no fees or charges associated with it.
There is also no minimum deposit for a Robinhood instant account. It is automatic when you sign up.
If you want to go for the gold though you need $2,000 and you can convert your cash account to upgrade. There is a $5 monthly fee…
The Bottom Line
Robinhood deposits can be instant, but not always. If you use your instant deposit option the money does arrive instantly, but within limits.
You can have access to the funds, but that does not mean that they have completely transferred.
Transfers of funds by deposit, withdrawal, trading, and selling all have their guidelines and how quickly they are just depends on the situation and your bank.