What is settlement?
Settlement marks the official transfer of securities to the buyer's account and cash to the seller’s account.
When does settlement occur?
For most stock trades, settlement occurs two business days after the day the order executes, or T+2 (trade date plus two days). For example, if you were to execute an order on Monday, it would typically settle on Wednesday. For some products, such as mutual funds, settlement occurs on a different timeline.
What counts as settled funds?
- Incoming cash (such as a check deposit or wire)
- The available margin borrowing value in a margin account (doesn’t apply to a cash account)
- Settled sale proceeds of fully paid-for securities