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How to Transfer Money from Robinhood to a Bank

Various financial platforms allow the transfer of money to a bank account, and Robinhood is one of them. Some of these institutions charge transfer fees, while others do not. Moreover, the charges depend on the transfer mode you use. For instance, Cash App instant transfer of funds to a bank account attracts a 1.5% fee while the standard method of 1-3 business days is free. I will show you how to transfer money from Robinhood to a bank account later.

The ability to transfer funds from an online financial platform to a bank account allows you to perform various transactions from your bank account. Most service providers trust payments from banks, and thus, if you have money in your Robinhood account, you will have to move the funds to such accounts. That is if you must make payments with your bank accounts. Furthermore, funds in your bank account are easy to withdraw either over the counter or in an ATM.

Usually, transfers from online money apps to a bank account require an internet connection. Moreover, you need a safe internet connection when performing online transfers since you might find yourself in a mess if hackers get hold of your account and steal everything from you. Some of the most dangerous internet connections are the public WiFis that open ways for hackers. Cybercriminals can easily read your money app details when online via an insecure internet.

What is Robinhood?

Robinhood is an American financial institution that operates from Menlo Park, California, in the United States. The company offers a commission-free stock trading platform and allows the exchange of traded money via a mobile app. The company started its operations in March 2015 under the Financial Industry Regulatory Authority (FINRA) regulations.

Robinhood started its operations on April 18, 2013, with its founders being Vladimir Tenev and Baiju Bhatt. The year 2020 statistics showed that Robinhood has 1,281 employees and estimated $20 billion assets under management. As we speak, the company has about 13 million users.

Robinhood has three primary sources of income. They include;

  • Interest from customers’ cash balances
  • Selling order information to the high-frequency traders
  • Margin lending

Which products does Robinhood offer?

transfer money from robinhood to bank

Robinhood offers various products, which include the following.

1) Stock and ETF trading

Robinhood offers commission-free investing to those interested in stock trading. You also get the tools needed to put your investment in motion. When you sign up, you get your first stock for free. Interestingly, you can invest as low as $1. Robinhood converts any amount of dollars to parts of a whole share. You are also able to trade in real-time and can benefit from the current prices of shares.

Furthermore, everything is online, and you can trade right from your smartphone, whereby you can meet sellers and buyer’s right in one place. Stockbrokers come in between the buyers and sellers and are the ones who place the trades. For your information, the stock market of the US has 13 exchanges, best known as the New York Stock Exchange and the Nasdaq.

The stock market has three main activities. They include;

i) Stock buying

Individual or institutional investors purchase shares from companies every day. There is usually lots of buying of shares every second, minute, hour, and so on.

ii) Stock selling

When investors buy shares from companies, they wait until the price is higher and sell to willing buyers. By doing so, the seller can make profits.

iii) Issuance of stocks

Issuance of stocks involves companies selling a portion of their companies to raise money.  A company may come back to a stock market platform to make a secondary public offering by selling more shares to raise more money.

Other activities include trading of exchange-traded funds (ETFs). ETFs refer to types of security that track a sector, an index, commodity, or other assets and can be purchased and sold on a stock exchange just like a regular stock.

2) Cash management

Robinhood offers cash management services to willing customers. The cash management feature on the Robinhood Financial LLC brokerage account allows you to earn interest on the cash swept to the program banks. Therefore, you can make a 0.30% annual percentage yield from some portion of your money as you invest other amounts in shares. One can get a Mastercard debit card from Sutton Bank.

Moreover, the cash management account allows you to pay bills, send checks, and receive your paycheck with ease. With the Robinhood Mastercard debit card, you can withdraw money from over 75,000 ATMs across the country. All 50 states have ATMs that support the Robinhood debit card.

Furthermore, Puerto Rico, the U.S. Virgin Islands, and some international locations have Robinhood debit card in-network ATMs. You can locate a nearby on-net ATM right from your app. To find an ATM near you, 

  • Navigate to the Cash Management option
  • Scroll to the bottom of your phone’s screen
  • Hit “See Nearby ATMs”

All in-net ATMs are free. Other net ATMs may charge you fees for using their services. However, Robinhood does not receive a share of those charges.

The good thing with Robinhood cash management accounts is that you can withdraw your uninvested money anytime and as many times as you may wish. Again, if you want to earn significant interest, and then ensure that the uninvested money stays with the program banks as long as possible.

Remember that Robinhood does not pay the interest rates: the partner banks are the ones to pay you interest on the money swept on their side. Other advantages of Robinhood cash management account include;

  • Zero account opening fees
  • No minimum balance
  • There are no account maintenance fees
  • Zero inactivity fees
  • No overdrafts
  • Zero foreign transaction fees

Is the Robinhood cash management account safe?

The cash management account from Robinhood is completely safe since the partner banks have FDIC insurance. Therefore, your money is safe up to $250,000 in each partner bank in case of anything. Furthermore, the Robinhood Mastercard debit card has Mastercard Zero Liability Protection, so that if someone uses your card to purchase goods and services unlawfully, you will not be liable for any loss. However, you must report a lost card to Robinhood as soon as possible.

Furthermore, Robinhood Financial LLC is a SIPC member, and you will not lose the invested money if the company collapses. Your securities up to $500,000 have insurance. When you sweep the balance to program banks, then the insurance policy moves to FDIC.

How do you join Robinhood?

You can sign up at Robinhood via a referral link or visit the “Open my Account” page. To get started, you need the following requirements.

  • Be at least 18 years old
  • Have a valid Social Security Number
  • Have a U.S. residential address within the 50 states or Puerto Rico

 The active U.S. military personnel stationed abroad may not count on this requirement.

  • Be a U.S. citizen or have a valid U.S. visa.

You also need a smartphone or tablet (Android or iOS) or a computer to open your account via the web.  The signup process involves the following steps.

1) Set up your account

You need to provide various personal information during this stage, including your full names and your email address. You also need to create your username and password. A smartphone or tablet is preferable to set up your account if you want to invest your money.

Robinhood will always ask you whether you are using android or iOS since all the trading services are done on a mobile phone. However, you can use your computer to sign up and sign in on a mobile phone app to begin trading.

2) Enter your contact information

You should enter contact information such as phone number, city, Zip, state, and home mailing address. You will also answer other questions, such as whether you have an immediate relative working at Financial Industry Regulatory Authority (FINRA) or any member firm such as the Robinhood brokerage itself, among other questions. Most probably, you will answer no.

3) Verify your identity

In this step, Robinhood will explain why they need your Social Security Number. The federal government’s Social Security Number collection is a requirement to prevent money laundering and terrorism in the stock market.

When verifying your account, you should provide your Social Security number, marital status, citizenship status, number of dependents, employment status, and date of birth. You need to provide accurate information in this stage to proceed.

4) Fund your account

You now need to fund your account since you have almost completed the signup process. Robinhood will explain that they do not charge you to add or withdraw money from your account. You can link and use your bank account to fund your Robinhood account. Supported banks include;

  • Wells Fargo
  • Chase Bank
  • Bank of America
  • Citi Bank, and
  • PNC etc.

 You can fund your account with as low as $1.

5) Submit the application

You are almost completing the process at this stage. Review the terms and conditions, and then hit “Submit Application.”

6) Download the Robinhood app

As soon as you have submitted your information, then a page opens up instructing you to download the Robinhood app. If using an Android OS phone, you can get it from the Google Play Store. For iOS phones and tablets, you can get it at the App Store. 

On this page, you will also get the message “Application Submitted,” and you will have to wait for approval or decline the message in your email address.

How to transfer money from Robinhood to a bank account

After trading and making lots of profit, you may want to withdraw your money from your Robinhood account to your bank account. You can add a different bank from the one you deposited money from by providing additional information.

To withdraw to another bank other than the one you added when opening, you will need to;

  • Explain why you cannot withdraw from your original bank account
  • Provide a photo of your front and back of your government-issued ID
  • Provide pictures or PDF documents showing the statements of the two banks to prove that you are the owner of all the accounts.

You will also include the amount to withdraw and the bank account to withdraw to. If your Robinhood account has some restrictions preventing withdrawals, you can contact customer care to help you with that.

To move funds to your bank account, choose between partial or a complete withdrawal and follow the steps below.

  • Tap on your “Account” in the bottom right corner of your screen
  • Tap on Transfers and select “Transfer to Your Bank.”
  • Choose the bank account you wish to transfer the money to.

If you are using the web, you have to follow the steps below.

  • Click “Account” in the top corner right of your screen
  • Select Banking
  • Initiate transfer to your bank Social Security Number collection from Robinhood using the panel on the right side.

Once you have submitted your withdrawal request, the money may remain visible for up to five trading days, but you cannot trade using it. If you withdraw money to a different bank than the one you opened an account with, it may take sixty days for Robinhood to verify the account, which means long waiting.

If there is no serious issue with your first bank, it remains the best option if you need the money in good time. There are many advantages of having money in your bank account, such as payment of bills, withdrawing in an ATM, among other uses. You can as well send money with a checking account number instantly to other accounts within your bank.

Can I withdraw my Robinhood referral earnings to my bank account?

Robinhood allows you to earn via referral links. Once your friend signs up and adds a bank account, then both of you earn some stocks. You can earn up to $500 each calendar year. However, you need to wait for 30 days after opening your account to cash out your rewards.

Unfortunately, Robinhood does not give you information about who joined via your referral link. You can trust that they will be honest and reward you for what you deserve.

Bottom line

Robinhood allows you to generate income by buying and selling shares. You can also open a cash management account and earn up to 0.30% APY. You can also earn from referrals up to $500 per calendar year. Money in the cash management account and your brokerage account has insurance. Opening a Robinhood account is free, and you can add as low as $1 to your account to start trading.

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