Robinhood is a smartphone-forward brokerage that has taken the millennial investment market by storm.

It’s easy to see why Robinhood’s user base has grown dramatically, with $0 commission, and access to ETF and cryptocurrency trades in the US and Australia. 

However, Robinhood isn’t a perfect platform, and you may be thinking about closing your account for multiple reasons.

This article will take you through all the steps to close your Robinhood account and give you the important information you need to know. 

Before You Close Your Robinhood Account

You must first choose whether you wish to permanently delete your account or simply disable it.

You can only use the Robinhood app to examine your historical account statements, tax forms, and transaction confirmations after you close your account.

You will need to go through the application process again if you later decide you want to trade using Robinhood.

Even if you deactivate your account, you will still be able to check all of your documentation, and you don’t have to leave any funds in your account.

Your Robinhood account balance must be zero to close or deactivate your account.

This means that you must either liquidate all of your positions and deposit the proceeds into your bank account, or you must move all your assets from Robinhood to another brokerage.

Keep in mind that if you sell your shares for less than you purchased them, you may lose money.

You may also owe capital gains tax after selling. Consider transferring to a different brokerage account if it’s not the right time to sell.

Reasons For Closing Your Robinhood Account

Everyone has their own reasons for closing their Robinhood account, but one of these complaints might contribute to your decision.

More Day Trading

Your reason might be as simple as wanting to try your hand at day trading.

Robinhood makes trading easy with a user-friendly interface, allowing you to trade in stocks, ETFs, and options without the complex day trading platforms and tools.

After some time trading with them, you might want to move on to bigger and better things.

Less Risk, More Traditional

Robinhood makes you completely responsible for your own investments.

Without a broker or financial advisor, you could see yourself losing a lot of money if you’re not experienced in investing.

If you want to use a more traditional investment broker, you might want to close your account with Robinhood.

More Risk, Less Traditional

Robinhood cut out a large part of its client base when it blocked users from buying certain stocks in 2021.

Many investors saw this move as greedy, not allowing small investors to trade in high value stocks.

You might want to transfer to a brokerage that has more stocks available to trade without limitations.

How To Close Your Account

How To Close Your Account

iOS

  • Open the Robinhood app on your phone, and from the home screen, click on the “Account” icon in the bottom right corner of the screen.
  • Click on the three lines located at the top right corner.
  • Scroll down to “Settings”.
  • Click on “Account Information”
  • Scroll down and click on “Deactivate your account”.
  • Click on “Close Account”. The app will ask for confirmation and then your deactivation request will take 3 to 5 days to process.

Android

  • Open the Robinhood app and go to your profile.
  • Click on the three lines located at the top right corner.
  • Click on the three lines located at the top right corner.
  • Scroll down to “Settings”.
  • Click on “Account Information”
  • Scroll down and click on “Deactivate your account”. The app will ask for confirmation and then your deactivation request will take 3 to 5 days to process.

Transferring To Another Broker

You have the option to transfer your positions to another brokerage if you don’t want to sell them.

Robinhood will close your account after you have transferred all of your assets out.

At your newly selected brokerage business, you can start the transfer procedure.

A request for ACATS (Automated Customer Account Transfer Service) must be made, and you must complete any paperwork that your new brokerage firm asks for.

They will then send you transfer instructions so that your assets and money can be transferred to the new brokerage firm.

Some brokerages might ask for your Robinhood Securities account number before you can transfer.

They might also require a DTC number to make the transfer. Robinhood’s DTC number is 6769.

Cancellation Fee

While Robinhood doesn’t charge account closure fees, closing your account will still cost you money.

Robinhood doesn’t charge commissions when you sell your assets.

However, like most brokerages, they will pass the SEC and FINRA sales charges on to you. Selling your positions might also affect your capital gains tax bill.

Changing to another brokerage will also incur transfer fees.

Although transferring your trading account to Robinhood is free, transferring to another brokerage will cost you $75.

Sometimes this is offset by brokerage firms who offer incentives for you to transfer your assets to them.

Final Word

Finding out how to close a Robinhood account is simple, regardless of the reason you wish to stop using the trading platform.

By selecting the “Deactivate your 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.

You must start an automatic customer account transfer service request to transfer your Robinhood data to a new brokerage if you do not wish to sell your trading positions.

Although Robinhood does not charge a fee for account cancellation, keep in mind that both options will cost you money.