Millions of users from all corners of the world make use of the Robinhood application to invest money.
Most traders and investors prefer using Robinhood to buy, trade, and sell stocks because the app is easy, efficient, and very profitable, particularly if you understand the things you need to do.
This is the reason why most traders and investors do not want any type of limitation on their brokerage account on Robinhood, even if it lasts for a very short while and will get lifted eventually.
If you are facing the Robinhood account restricted problem, you have come to the right page. In this article, we will talk about everything that you can do to solve this issue.
In this article, we will talk about everything you need to know so that you can start buying, selling, and trading stocks on Robinhood.
Robinhood Account Restrictions – What Is It?
Now, there are quite many reasons why you are facing the Robinhood account restricted problem.
As it happens, the Robinhood company needs to follow certain rules and regulations that have been placed for brokerage firms all around the US.
In most cases, you can get done with a wide range of operations like crypto trading, day trading, etc. during the main trading hours.
However, Robinhood will get the funds blocked or remove the Trade Stocks feature if the company detects something off about the users.
Overall, Robinhood reserves the right to block the features for any Robinhood user for a wide range of reasons.
You have the choice to check the account status of your Robinhood account. If you see that your account has been restricted, it means any one of the three criteria:
- You have deposited cash in less than six days
- You have withdrawn cash in less than six days
- You have not transferred funds to your account within three days
Additionally, your account may also get restricted if there are suspicious activities.
In this case, you will have to get in touch with the customer care support team where they will ask certain questions to lift the restriction on your Robinhood account.
How Long Do The Restriction On Your Robinhood Account Last?
The length of the restriction on your Robinhood account will depend on the reason why your account has been restricted in the first place.
If you have violated the terms and conditions of the service, the length of the restriction will depend on how severely you have violated the terms and the number of times you have done so.
In most cases, your account will be restricted or even terminated if you keep violating the terms more than once.
If your account has been restricted for any other reason, like protection from fraudulent activity or an issue with your bank, the access is restored well within a few days.
The same may take longer if there is an issue where you may have to provide more information for anything, like a bank-related issue.
What Are Some Reasons For Your Robinhood Account Getting Restricted From Purchasing? What Are Some Fixes?
If you make use of the Robinhood application daily and your account gets restricted, it can understandably cause some panic.
However, you do not have to worry about it. We will discuss everything you need to understand why this problem occurs and what are some possible fixes.
The reason why you first need to understand the origin of this problem is that you need to look for appropriate fixes that can help deal with this issue, for both traders and investors. Let us now learn further:
1. Bank Account Has Failed To Transfer
If you have failed to transfer money from your bank account to your Robinhood account, it may trigger a service warning on the latter.
This problem is commonly seen in all types of bank accounts and even credit cards that are used for stock and crypto operations.
In such cases, you will have to change your payment method. With this, you should be able to lift any restrictions or bans that your Robinhood account is facing.
Additionally, you need to add the right information on the Robinhood application or your account will get restricted and you will not be able to perform any action on the application.
2. Blocked From A Selected Stock
If you are the owner or top manager of a company, you need to declare your identity as a control person.
In such cases, the app will impose some restrictions on your daily trading features.
You may very well get blocked from a particular stock so that you will not be able to manipulate one stock on your platforms.
By restricting the Robinhood account, you will not be able to trade stocks of your company, thereby preventing any type of manipulation on the stock.
Unfortunately, this is a type of restriction that cannot be lifted. If you want, you can simply make a new Robinhood profile.
3. The Balance In Your Account Has Run To Negative
If you have less than no money in your Robinhood account (i.e. running on negative), it means that you are in no condition to make the payments to the brokers.
This means that your Robinhood account will get restricted until you can add some funds to your account.
If you are unable to add funds to your Robinhood account, this problem will not get resolved.
Therefore, your primary goal here is to add some funds to your Robinhood account. If you do not have any funds in your Robinhood account, your account will get restricted.
4. Fraudulent Activity Detection
Financial platforms do impose restrictions and are quite common. For example, if you make use of any platform, like Coinbase, your account will get restricted if there is any fraudulent activity taking place.
Similarly, Robinhood will restrict your account if it detects any type of suspicious activity. In most cases, these restrictions are temporary and can easily be lifted.
All you need to do is get in touch with the customer care support agents and explain the situation to them.
5. Outdated Information
Yes, this is quite a common issue and can significantly limit your Robinhood profile. If you have not updated your information and data for a long time, you could face some restrictions on the Robinhood app.
For instance, you may have forgotten to update your expired credit card or you are using a bank account that you no longer use.
In such cases, it is advised that you update and/or correct the data so that your account does not get restricted and meets the Security Measures placed by Robinhood.
All you need to do here is to head over to your Robinhood account and update all the information.
Ensure that you add the right information as Robinhood makes use of a third-party application to review the details of your Robinhood account.
Why Is Your Robinhood Account Restricted From Cryptocurrency?
Now, there are quite a few reasons why your Robinhood account has been restricted from cryptocurrency. The most common reason here is that your Robinhood account has not yet been verified.
If you want to verify your Robinhood account, you are required to provide some personal information, such as your name and your social security number.
Depending on the case, you may have to provide some more info to get your Robinhood account verified.
Another reason why you may not be able to use cryptocurrency on Robinhood is that the state where you reside does not support the app’s cryptocurrency trading services. Currently, Robinhood offers crypto trading services in 30 US states.
If you want to check whether the crypto trading services are available in your area, you can click here.
The final reason behind this Robinhood account restricted issue is that your Robinhood account may be red-flagged due to suspicious behavior.
What Are Some Ways To Remove Day Trading Restrictions From Your Robinhood Account?
To get rid of the day trading restrictions on your Robinhood account, you will have to start by providing the correct information.
For instance, there are three main principles that you need to follow if you want to comply with the laws related to security; but you also need to know that day trading is not considered a part of the safety strategy.
According to the US securities law, you will have to provide strict assessment by brokerage firms as well as some documentation before you will be able to execute the day trades.
Getting this done is very important as you will be provided with some benefits over the market.
Finally, you also need to know that real-time day trading activities are associated with certain risks, particularly during significant events like periods of high volatility, etc.
What Are Some Other Reasons Your Robinhood Account Has Been Limited?
Of course, there are many other reasons why your Robinhood account has been restricted.
If none of the above-mentioned points are the reason behind the restriction, you need to get in touch with the Robinhood customer support team quickly.
However, you need to remember that Robinhood has a very transparent policy when it comes to the restriction of the user’s accounts.
Therefore, you will have to follow the instructions very carefully if you want to lift those restrictions from your Robinhood account.
As you can see, Robinhood is a free trading platform where you can do some trading without having to pay any additional fees.
However, there are many reasons why your account can get restricted from withdrawing or purchasing for additional protection.
If you want to remove these restrictions from your Robinhood account or unblock your purchase limit or withdrawal, you can follow the above-mentioned tips to help you deal with this problem.
If you are unable to remove the restrictions from your Robinhood account, even after following all these steps, you can always get in touch with the customer care support team.
If you have any other ideas that can help deal with this issue, you can let us know in the comment section below.
Here are some common FAQs related to the Robinhood account restricted problem:
How Long Do The Restrictions Typically Last?
The restrictions may last normally for up to 90 days. However, there have been cases where the restrictions have been lifted within a week.
Overall, how long your account has been restricted will depend on the reason behind the restriction in the first place.
I Am Unable To Withdraw My Funds By Bank Transfer? Why Does This Happen?
One of the most obvious reasons why you are unable to withdraw the funds from your Robinhood account to your bank account is because your account is restricted.
If you keep viewing this Robinhood account restricted problem, you can click here to learn how to solve it.