How to Close Your Robinhood Account: A Step-by-Step Guide

Are you ready to say goodbye to Robinhood? Maybe you’ve decided to switch to a different brokerage, or perhaps you’re just taking a break from trading for a while. Whatever your reason may be, closing your Robinhood account is a relatively straightforward process.

In this step-by-step guide, we’ll walk you through the process of closing your Robinhood account. From deciding whether to deactivate or close your account, to selling your positions and withdrawing your balance, we’ve got you covered.

But before we dive into the nitty-gritty details, let’s take a moment to appreciate the fact that you’re taking control of your financial future. Deciding to close your Robinhood account is a brave and responsible decision that not everyone has the courage to make. So, kudos to you!

Now, let’s get down to business. Closing your Robinhood account involves a few key steps, and it’s important to understand the differences between deactivating and closing your account, as well as the potential fees and tax implications that come with selling your positions.

So, grab a cup of coffee (or tea, or whatever your beverage of choice may be), sit back, and let’s walk through the process of closing your Robinhood account, one step at a time.

Reasons to Close a Robinhood Account

There are several reasons why someone might consider closing their Robinhood account. Here are three broad categories of complaints that might explain why:

Wanting to do more day trading:

• Robinhood provides a trading platform without bells and whistles, making it easy to trade stocks, ETFs, and options. However, this eliminates many of the advanced day trade platforms and tools, which might not suit everyone’s needs. If you’re interested in trying your hand at day trading, you might want to consider closing your Robinhood account and looking for a platform with more advanced tools.
• Additionally, Robinhood doesn’t allow for trading before or after market hours, which could be a dealbreaker for some day traders.

Wanting less risky, more traditional brokerages:

• As a smartphone-first brokerage, Robinhood makes trading easy for individual, retail traders. However, this also means that users are completely responsible for their investment strategy without the guidance of a broker or financial advisor. If you’re unsure about your investment strategy or looking for more traditional investment options, you might want to consider transferring your account to a more institutional investment broker that can provide individual advice.

Wanting more risky, less traditional brokerages:

• Robinhood recently faced backlash after blocking its users from buying certain stocks, alienating a large part of its customer base. Retail investors who were using Robinhood as a way of getting away from traditional, institutional brokerages saw this move as “stealing from the poor to give to the rich”. If you’re looking for a more unconventional approach to trading, you might want to consider closing your Robinhood account and finding a stock trading app that hasn’t blocked its users from buying certain stocks.

It’s important to carefully consider your reasons for wanting to close your Robinhood account and ensure that you fully understand the implications of doing so before taking any action.

Steps to Take Before Closing Your Account

Before closing a Robinhood account, there are some important steps that need to be taken. This includes deciding whether to close or deactivate the account and ensuring that the account balance is $0. Here are the steps to take before closing your Robinhood account:

1. Decide whether to close or deactivate the account: When you close your Robinhood account, you will no longer be able to use the app for trading. However, you can still access your account statements, tax documents, and trade confirmations. If you deactivate your account, you can still access all of your documentation and reactivate your account in the future if you want to start trading again.
2. Ensure that the account balance is $0: Whether you choose to close or deactivate your account, you need to make sure that your account balance is $0. This means you have to sell all of your positions and withdraw the balance to your bank account, or transfer all of your assets to another brokerage.
3. Sell all of your positions and withdraw the balance to your bank account: If you decide to close your account, you can do so within the Robinhood app. Start by tapping the Account (person) icon, then selecting Account Information, and finally scrolling down and tapping Deactivate Account. Follow the steps to close all your positions and withdraw your outstanding balance. Once your balance is $0.00 and your positions are closed, you will be able to confirm your deactivation request.
4. Transfer all of your assets to another brokerage: If you do not want to sell your positions, you can choose to transfer them to another brokerage instead. The transfer process begins at your new brokerage firm. You will need to initiate an ACATS (Automated Customer Account Transfer Service) request and fill out any required paperwork. Once the transfer is complete, Robinhood will automatically close your account.

It’s important to note that Robinhood is required by law to preserve certain books and records, so your account will still exist in the Robinhood system even after it is closed or deactivated. However, you will no longer be able to trade or invest through the app.

How to Close a Robinhood Account?

If you’re ready to close your Robinhood account, it’s important to understand the process. Fortunately, the steps are simple and straightforward. Here is a step-by-step guide on how to close your Robinhood account:

1. Open the Robinhood app on your mobile device and log in to your account.
2. Tap on your profile icon in the top left corner of the screen.
3. Select “Account Information” from the menu that appears.
4. Scroll down and tap on “Deactivate Account.”
5. Follow the prompts to sell all of your positions and withdraw any remaining funds from your account.
6. Once your account balance is zero and all positions have been closed, you will be able to confirm your deactivation request.
7. If you want to close your account completely, send an email request to Robinhood at support@robinhood.com.

It’s important to note that your account balance must be zero before you can close your account. This means that you’ll need to sell all of your positions and withdraw any remaining funds. Additionally, once you close your account, you will no longer be able to access the Robinhood app for trading or investing purposes. However, you will still be able to view your account statements, tax documents, and trade confirmations through the app.

How to Transfer a Robinhood Account to Another Broker?

If you’re considering moving your investments from Robinhood to another brokerage, transferring your account is a great option. It allows you to keep your existing portfolio intact and avoid selling your holdings, which can trigger taxable gains or losses. Here’s a step-by-step guide on how to transfer a Robinhood account to another broker:

1. Choose your new brokerage: The first step is to select the brokerage to which you want to transfer your Robinhood account. Make sure that the new broker offers the services and investment options that you want.
2. Initiate the transfer process: Once you’ve decided on the new brokerage, you’ll need to initiate the transfer process by contacting them. Most brokers have a transfer request form that you’ll need to fill out.
3. Provide your account information: As part of the transfer process, you’ll need to provide your Robinhood Securities (RHS) account number. You can find this information in your Robinhood mobile app by tapping the Account icon in the bottom right corner, then selecting Investing. Your account number will be displayed at the top of the screen. You may also need to reference Robinhood’s Depository Trust Company (DTC) number, which is 6769.
4. Wait for the transfer to complete: Once you’ve initiated the transfer, it can take several days or even weeks for the process to complete. During this time, your assets will be frozen and you won’t be able to trade.
5. Verify that the transfer is complete: Once the transfer is complete, verify that all of your holdings and account information have been transferred over correctly. Make sure to update any automatic investment or contribution plans you may have set up with the new brokerage.

It’s important to note that while Robinhood doesn’t charge a fee for transferring your account to another brokerage, some brokers may charge a transfer fee. Additionally, transferring your account may cause tax implications, so it’s always a good idea to consult a tax professional before making any moves. If you need assistance during the account transfer process, you can contact Robinhood customer service for help.

Does Robinhood Have a Cancellation Fee?

If you’re considering closing or transferring your Robinhood account, it’s important to understand the associated fees. While Robinhood doesn’t charge a specific account closure fee, there are other costs to consider.

Here’s what you need to know:

Fees for Selling Positions:

If you choose to sell all of your positions before closing your account, Robinhood won’t charge you any commissions, which is a bonus. However, you’ll still have to pay the SEC and FINRA sales charges.

Capital Gains Taxes:

Selling your positions could also affect your capital gains tax position, so it’s important to consult with a tax professional before making any moves.

Transfer Fees:

If you choose to transfer your positions to another brokerage instead of selling them, Robinhood won’t charge you for the transfer. However, the new brokerage firm may charge a transfer fee of around $75.

Offsetting Transfer Fees:

In some cases, the new brokerage firm may offer incentives to offset the transfer fee. It’s worth checking with them to see if they have any promotions or bonuses available for new customers.

Overall, while Robinhood doesn’t have a cancellation fee, there are still financial costs associated with closing or transferring your account. It’s important to weigh the pros and cons of each option and consider any potential fees before making a decision.

Conclusion | How to Close Your Robinhood Account?

In conclusion, closing a Robinhood account can be done in a few simple steps, but it’s important to consider all the options and take necessary precautions before doing so. Whether you’re looking to do more day trading, want less or more risky brokerages, or simply want to transfer your account to another brokerage, there are steps you can take to ensure a smooth process.

Remember, before closing or deactivating your account, make sure your account balance is $0 by either selling your positions or transferring them to another brokerage. Additionally, Robinhood does not charge an account closure fee, but other fees may apply, so it’s important to check with your new brokerage or financial advisor before making any final decisions.

FAQS | How to Close Your Robinhood Account?