T+1 settlements
For an open trade in your Robinhood investing account, the current settlement date for stocks and ETFs is 2 business days after the trade date (T+2). Starting May 28, 2024, the new standard settlement date for these securities will be the next business day after a trade (T+1).
The settlement for options trades is already 1 business day, and that won’t change. Business days are Monday through Friday except for stock market holidays and half-days.
This is an industry-wide change for stock and ETF trades because of the recent rule amendments from the Securities and Exchange Commission (SEC) and FINRA. This upcoming rule change will soon make the settlement cycle 1 day shorter. This means the difference between the date you trade a stock or ETF and the date the transaction settles will be shorter. Starting May 28, it’ll change from T+2 to T+1 (within 1 business day after a trade).
If you place a trade that executes on Monday, the transaction will settle on Tuesday (unless it is a stock market holiday).
Generally, you won’t see changes in your account balances as a result of the change in the standard settlement date. However, sale proceeds that are currently only available on T+2 will be available instead on T+1. This means you may be able to use trade proceeds 1 day earlier for cash withdrawals. Keep in mind, buy trades will require payment to the seller 1 day earlier as well.
This rule change requires no action on your part. The new T+1 settlement period will automatically be applied for any new trades executed in your Robinhood investing account on or after May 28, 2024.
Once settlement is complete, your cost basis is set for tax purposes. You’ll only have 1 business day (not 2) to adjust any cost basis decisions starting on May 28, 2024.