What buying power is and where it comes from

Buying power on Robinhood is the amount of money you can use to buy stocks, options, or crypto without depositing new cash. It comes from three sources: cash you deposited, proceeds from sales you made, and margin borrowed against your holdings if you have a margin account.

When you sell a stock, the cash from that sale becomes buying power when ready — you do not have to wait for the trade to settle. If you have a standard cash account, your buying power equals your cash balance plus any unsettled proceeds. If you have a margin account, Robinhood lends you additional buying power based on the value of securities you already own.

The key distinction: buying power is not money in your bank account. It is purchasing capacity within Robinhood. To move money out of Robinhood entirely, you withdraw cash, which is a separate step.

Key Takeaways

  • Buying power is the amount you can spend on investments within Robinhood and comes from deposits, sales proceeds, or borrowed margin.
  • You cannot withdraw buying power directly — you must first sell securities to convert holdings into cash, then withdraw that cash to your bank account.
  • Cash from stock sales is available as buying power when ready, but withdrawals to your bank account take one to three business days to arrive.
  • Margin accounts offer more buying power than cash accounts but charge interest on borrowed funds and carry the risk of forced liquidation if your account value drops.

Converting holdings into cash buying power

If you want to use buying power that is currently tied up in stocks or crypto, you must sell those holdings first. Open the Robinhood app or website, find the security you own, tap or click "Sell," enter the number of shares or the dollar amount, and confirm the order.

Once the sale executes, the proceeds appear as buying power in your account within seconds. You can then use that buying power to buy other investments, or you can withdraw it to your bank account. There is no waiting period between selling and having the cash available to spend — this is different from traditional brokerages, where sales typically settle after two business days.

If you own fractional shares, you can sell those too. Robinhood allows you to sell down to the cent, so you can convert any portion of a holding into cash.

Withdrawing cash to your bank account

To move money out of Robinhood and into your bank account, you withdraw cash, not buying power. In the app, go to your Account tab, select "Transfers," then choose "Withdraw." Enter the amount and select your linked bank account.

Robinhood processes withdrawals within one to three business days. The exact timing depends on your bank — some banks post transfers faster than others. Weekends and bank holidays can extend the timeline. You will see the withdrawal status in the Transfers section of the app.

You can only withdraw cash that is actually in your account. If your buying power includes unsettled funds from a recent sale, those funds may not be available to withdraw when ready on some account types, though Robinhood's when ready settlement for most sales means this is rarely an issue for standard users.

How margin accounts increase buying power

A margin account on Robinhood allows you to borrow money to invest, which increases your buying power beyond your cash balance. The amount you can borrow depends on the value of securities you already own — typically you can borrow up to 50% of the value of may be able to access stocks you hold.

Margin comes with a cost: Robinhood charges interest on borrowed funds, and the rate varies based on the amount borrowed and market conditions. You can see your current margin interest rate in your Account settings. The interest accrues daily and is deducted from your account.

Margin also carries risk. If your account value drops and your equity falls below Robinhood's maintenance requirement (typically 30% of your total account value), Robinhood can force you to sell securities to bring your account back into compliance. This is called a margin call. You do not get to choose which securities sell — Robinhood liquidates positions automatically.

Buying power limits and how they reset

Robinhood sets a buying power limit based on your account type and history. New accounts typically start with lower limits. The limit increases over time as you build a history of deposits and trades.

Your available buying power can also be temporarily reduced if you have unsettled trades or pending withdrawals. For example, if you buy a stock and then when ready sell it (a same-day trade), that round-trip counts toward your day-trading limit if you have a cash account with less than $25,000. Once you hit the limit, your buying power is frozen until the settlement period ends or your account balance reaches $25,000.

If you deposit cash into your account, your buying power increases by that amount within minutes. If you withdraw cash, your buying power decreases by that amount.

The difference between buying power and cash balance

Your cash balance is the actual dollars in your Robinhood account that you have not invested. Your buying power is what you are allowed to spend, which may be higher if you have margin or lower if you have pending trades or withdrawals.

For example: you deposit $5,000 and buy $3,000 worth of stock. Your cash balance is $2,000. Your buying power is also $2,000 (in a cash account) or higher (in a margin account). If you then sell the $3,000 stock, your cash balance becomes $5,000 and your buying power becomes $5,000.

The app shows both figures in your Account tab. Cash balance appears under "Cash Available," and buying power appears as "Buying Power" or "Excess Liquidity" depending on your account type. If these numbers differ, check your Transfers tab to see if you have pending deposits or withdrawals.

Frequently Asked Questions

Can I withdraw buying power directly without selling stocks?

No. Buying power is spending capacity within Robinhood, not money you can move to your bank. You must sell securities first to convert them into cash, then withdraw that cash. Margin buying power is borrowed money and cannot be withdrawn at all — it must be repaid by selling securities.

How long does it take to withdraw cash after I sell a stock?

The cash from a sale becomes buying power when ready. However, withdrawing that cash to your bank account takes one to three business days, depending on your bank's processing speed. Robinhood initiates the transfer when ready, but your bank controls when it arrives in your account.

What happens to my buying power if I have a margin call?

When you receive a margin call, Robinhood automatically sells securities in your account to bring your equity back above the maintenance requirement. Your buying power drops as your account value decreases. You can avoid margin calls by keeping your account balance well above the maintenance threshold or by switching to a cash account.

Does Robinhood charge a fee to withdraw cash?

Robinhood does not charge a withdrawal fee. Your bank may charge a fee for incoming transfers, but this is rare for standard transfers. Check your bank's fee schedule if you are unsure.

Can I use buying power from a sale when ready, or do I have to wait for settlement?

You can use buying power from a sale when ready on Robinhood. Unlike traditional brokerages, Robinhood credits sale proceeds to your account right away, so you can buy other securities with that cash without waiting for the two-day settlement period.