If you are a frequent buyer and seller of stocks or cryptocurrency, waking up to a restricted brokerage account might be very inconvenient. It has the potential to prevent you from making a profit.
Robinhood users, however, experience this all the time. When using Robinhood, why is my account limited, and how do I remove the limit?
Stocks, ETFs, options, and cryptocurrency may all be traded under a single Robinhood account, making it a favourite among individual investors.
Some of Robinhood’s most appealing features include the option to buy partial shares and make advance purchases on pre-IPO securities.
As of now, almost 13 million people have signed up to use the programme. You must be aware of the potential dangers posed by account restrictions and the steps you can take to avoid them.
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What Does “Robinhood Account Restricted” Mean?
When a user’s Robinhood account has been restricted for whatever reason, the company uses the term “Restricted” to describe the status of that account.
Whatever the cause—suspicious conduct, insufficient trading volume, incomplete registration information, etc.—the effect is the same: a limited account with no access to cash.
Why is My Robinhood Account Restricted?
In the web app, you can see how things are going with your account. The phrase “Your account is restricted” signifies that your account has been limited.
Because of one of the following reasons: You have not made a bank transfer to fill your account within the last 3 days.
It has been less than 6 days since your last cash withdrawal.
You have made an early deposit of funds (before the 6-day grace period has expired).
If Robinhood detects unusual behaviour, it may limit access to an account.
How Long is My Robinhood Account Restricted from Purchasing
For the next 90 days, you won’t be able to make any purchases using your Robinhood account. In most circumstances, the account lockout is just temporary, and you’ll be able to use the account again soon.
Contacting Robinhood’s support team is your best bet if you need help regaining access to your account earlier than 90 days after closing it.
A permanent account restriction means you will never be able to access your Robinhood account again. You will receive an email with the relevant information.
In the event that your access is permanently revoked, you can always sign up for an other app, such as Webull.
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Conclusion
A broker will prevent you from trading in the stock of a company in which you have identified yourself as a control person. This is done so that it complies with relevant laws and standards.
Only some stocks would be affected by such a limitation. If you are no longer a controlling shareholder, you will be able to trade your stock again.
