T+1 settlements
As of May 28, 2024, the new standard settlement date for an open trade in your Robinhood investing account is the next business day after a trade (T+1). The past settlement date for stocks and ETFs was 2 business days after the trade date (T+2).
The settlement for options trades is already 1 business day, and that won’t change. Business days are Monday-Friday except for stock market holidays and half-days.
This is an industry-wide change for stock and ETF trades because of the rule amendments from the Securities and Exchange Commission (SEC) and FINRA. This rule change makes 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 is now shorter. As of May 28, it changed 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 are available on T+1. This means you may be able to use trade proceeds 1 day earlier for cash withdrawals. Keep in mind, buy trades now require payment to the seller 1 day earlier as well.
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 as of May 28, 2024.