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Through a smartphone app launched in March 2015, Robinhood Markets, Inc., an American financial services company with its main office in Menlo Park, California, enables commission-free trading of stocks, exchange-traded funds, and cryptocurrencies.
The U.S. Securities and Exchange Commission has registered Robinhood as a broker-dealer, and it is a part of the Securities Investor Protection Corporation.
Interest on cash balances of customers, selling order information to high-frequency traders (a practice for which the SEC started an investigation into the company in September 2020), and margin lending are the three main sources of the company's revenue.
Robinhood had 15.9 million monthly active users as of March 2022, and 22.8 million funded accounts. The brokerage provides cryptocurrency trading, making it a viable option for consumers seeking commission-free trading of assets like bitcoin and Ethereum.
Additionally, Robinhood has introduced a cash card that offers bonuses ranging from 10% to 100% and up to 8% cash back at participating retailers.
Even with these amazing features, some people still question this platform with doubts about their liability and how secured they are due to continuous modification of their platform and some limited features they provide.
Beginner stock market investors frequently choose Robinhood, however eventually you might wish to delete the app and unsubscribe from the service.
According to Jennifer Stein, Priebe Wealth's director of client engagement, "Robinhood has gained notoriety for deceiving novice investors and enabling them to engage in trades that are significantly riskier than they are comfortable with.
In addition, outside of a typical brokerage investment account, Robinhood does not provide retirement accounts, trust accounts, or many other types of investment vehicles."
This post will explain how to delete your account, whether you desire to, for the reasons mentioned above or for another reason.
How to Close and Delete a Robinhood Account
Why should you Delete your Robinhood Account?
You might be interested in learning how to close a Robinhood account if you have one of the following three types of complaints against Robinhood:
You wish to increase your daily trading.
By offering a trading platform with no frills, Robinhood simplifies trading. Many of the sophisticated day trading platforms and tools are not available; you can only trade equities, ETFs, and options. You might wish to deactivate your Robinhood account if you want to give day trading a try.
You prefer classic, less-risky brokerages.
As a retail trader, an individual, Robinhood makes trading simple. This implies that your investing strategy is entirely your responsibility; there is no broker or financial advisor in the Robinhood ecosystem that can provide you with personalized guidance.
You risk losing a lot of money if you don't know what you're doing. You might wish to close your Robinhood account if you want to move your account to a more established, institutional investing broker.
You desire more riskier and less conventional brokerages.
Early in 2021, Robinhood alienated a sizable portion of its customer base by taking the extraordinary action of prohibiting its consumers from purchasing certain stocks.
This action was perceived as "taking from the poor to give to the rich" by retail investors who used Robinhood as a substitute for conventional, institutional brokerages. You might wish to close your Robinhood account if you want to move your money to a stock trading app that still allows users to purchase these equities.
What to do Before Deleting Robinhood Account
You must decide what to do with your possessions before you can delete your account:
You can choose to move your shares to another brokerage account using the Automated Customer Account Transfer Service (ACATS) form rather than selling all of your shares and closing all positions.
If you have a debit card, cancel it now.
Remove all funds from your account to make it balance at $0.
Just bear in mind that you could lose money if you sell the stock for less than you paid for it. A transfer is often a preferable choice because doing so may result in capital gains taxes owing. According to Stein, this will enable investors to maintain their investment while changing brokerages. "They can then determine the best strategy for selling the shares and diversifying if that is their ultimate goal."
READ NOW: How to Transfer Money From Robinhood to Bank Account
How to deactivate your Robinhood account
If you want to close your positions in your brokerage accounts and withdraw your money. Within the app, you can ask to have your Robinhood account deactivated.
- Select Account (person icon) by tapping it.
- Select Settings.
- Select Account Information.
- Tap Deactivate Account after scrolling.
To close all of your brokerage positions and withdraw your remaining balance, follow these instructions.
You will be able to confirm your deactivation request after your balance is $0.00 and all of your open positions have been closed.
If you want to close your account, email a written request to Robinhood ([email protected]).
How Can I Switch My Robinhood Account to a Different Broker?
You have the option to transfer your positions to another brokerage if you don't want to sell them. Robinhood will immediately close your account after you have transferred all of your assets out.
At your newly selected brokerage business, the transfer procedure starts. A request for ACATS (Automated Customer Account Transfer Service) must be made, and you must complete any paperwork that your new brokerage firm asks. They will then send transfer instructions so that your assets and money can be transferred to the new brokerage firm.
The other brokerage may want your Robinhood Securities (RHS) account number. These specifics can be found in your mobile app:
- In the bottom right corner, tap the Account symbol.
- Investing via Tap
- Your screen's top will display your account number.
For your transfer, you might additionally need to use a DTC number. The DTC number for Robinhood is 6769.
Call the Robinhood customer service line at 1-650-940-2700 if you require assistance during the account transfer process.
Final Verdict on How to get rid of my Robinhood Account
You might eventually feel the need to close your Robinhood account. You must either sell your securities or transfer them to another brokerage before proceeding. Before choosing a course of action, you should consider potential capital gains taxes as well as Robinhood's $100 transfer charge.
By selecting the Deactivate Account option in the app, you will be prompted to sell all of your open positions and transfer the remaining balance from your account to your bank account.
To transfer your Robinhood data to an other brokerage if necessary, you must first start an automated customer account transfer service request. Even while Robinhood doesn't charge a fee for account cancellation, keep in mind that both options will cost you, the user, money.
With this, you can get rid of your account. And any assistance needed, you can contact the Robinhood customer support and they will assist you at any point of need.
Reference:
https://www.stilt.com/blog/2021/03/how-to-close-a-robinhood-account/
https://www.businessinsider.com/personal-finance/how-to-delete-robinhood-account
Frequently Asked Questions (FAQs) on how to Remove Robinhood Account
What is the cost of closing a Robinhood account?
Your account can be closed for free if you sell your investments and just send the proceeds to your bank. There is a $100 fee if you decide to transfer your assets using ACATS.
What happens to the records of my account?
Even after you've canceled your account, Robinhood will continue to keep track of your statements, trade confirmations, and tax records for regulatory purposes. You can still get to them through the app. Re-downloading the app won't bring back a closed account, so don't worry.
>How long does it take to terminate an account with Robinhood?
Robinhood estimates that it takes three to five business days to deactivate your account after you've sold or transferred all of your holdings, cleared all of your credit card debt, and made the request.