How to Turn Off Margin on Robinhood
Robinhood builds its entire investment model around instant deposits, which makes each brokerage account created on the platform a margin account by default.
This means that it’s possible to purchase securities and investing on margin, which is obviously later paid back to the platform.
Although the margin used can provide certain benefits, the truth is that some traders would like to turn Robinhood margin off.
This doesn’t mean that whenever you buy stocks, they are all listed as bought on total margin, but that your cash account is considered as margin type by Robinhood.
Luckily, turning these settings off is possible, and we are going to show you how.
Continue reading to get information that belongs to your interests about:
- How to turn off margin on Robinhood;
- Understanding margin trading on Robinhood;
- Step-by-step guidance for changing your account type.
What is Margin Investing in Robinhood?
Margin investing refers to borrowing money from Robinhood in order to acquire securities.
These additional funds go directly into your portfolio investments, and help you to increase your capital on the buying power screen.
It’s a way to access more money for your day trades in order to power your portfolio value through prior approval of a set borrowing limit.
Clearly, Robinhood margin involves interest and risk.
All risks associated with these services do not depend on your past performance - your future results vary depending on different factors.
Learn more about equity, margin interest rate, borrowing limits, margin call, and more, before you invest your money here, on the margin investing section of Robinhood: Robinhood Margin Overview.
Pro Tip: Do you need to deposit additional funds to Robinhood, but you don’t have a bank account available?
Learn how to Add Money to Robinhood without a Bank Account here!
3 Things You Must Know about Margin Accounts on Robinhood
Before you turn margin profiles into cash accounts, there are a couple of things you must take into account:
- Margin accounts give you extra buying power, which can be used to increase your account value by having the possibility of borrowing more funds from Robinhood ( Check Robinhood Not Enough Buying Power for more info);
- Your available margin changes depending on many factors, but the platform will always tell you your set maximum limit on the amount of money you can borrow;
- You need to pay back interest regarding margin, and these values are calculated daily and charged in your next billing cycle.
How to Turn Off Margin on Robinhood
One of the main reasons that might lead you to turn off margin on Robinhood is simply because you are not day trading.
The Pattern Day Trader rule prevents you from day trading by automatically settling your portfolio value.
If you want to get around this, turning your margin account into a cash account will do the trick.
Learn more about day trades here: Remove Pattern Day Status on Robinhood.
Read Also: Options trading can be complicated for newcomers, but with a really good strategy, you can sell your assets and obtain profit really fast.
Learn how to sell and manage your options by reading our related post here: Sell Call Option on Robinhood.
Step 1: Open the Robinhood App
Firstly, open your Robinhood margin account on your phone.
Access your profile as you usually do, and then proceed with the next step.
Step 2: Select Your Person Icon
On the bottom right corner, you will see a little person’s icon.
Tap it in your account, and this will lead you to a new window.
Then, on the top right corner of the screen, select the hamburger icon, which will take you directly to account settings.
Step 3: Go to the “Investing” Section
Here, you can manage the details related to your account on Robinhood.
The best way to turn off margin is by going to the “Investing” section.
Step 4: Select “Day Trade Settings”
Then, when you are on Investing, you need to go to “Day Trade Settings.” Remember that trading on Robinhood requires you to perform settlement of your funds.
Otherwise, standard and instant deposits cannot take place if you don’t get your available money settled correctly.
Since margin accounts depend on instant settlement, you need to get rid of these settings.
Step 5: Toggle “Turn Off Instant Settlement”
Finally, select “Turn Off Instant Settlement,” and the funds in your account won’t automatically settle after you sell stocks or perform any trading operation with securities or options.
Learn more about Unsettled Funds on Robinhood here. Turning off instant settlements is a permanent action that will take some days to fully complete.
You have just turned your margin account into a cash account. This brings some consequences that you must be aware of.
We highly recommend you go to Robinhood’s Official Website for more details about your cash account.
That’s all you need to know for now.
Keep in mind that, whatever you do on your Robinhood profile, you always need to perform your own research beforehand.
Otherwise, the consequences will directly impact your portfolio’s profit.
Every step you take must be backed up by trustable information in order to protect your investments.
For more Robinhood insights, GrowFollowing is here for you.
FAQ
Can I Upgrade to a Robinhood Gold Subscription?
Yes, you can, and you might as well try it for free before you do it.
Nonetheless, there are some details regarding Gold accounts that you must get to know before you upgrade.
Learn more about this here: Upgrading to Gold on Robinhood.
Steve specializes in cryptocurrency and finance. As a born researcher, he won’t leave any stone unturned when it comes to topics he covers.