Understanding your Cash App Investing Account
Opening and utilizing your Cash App Investing account can come with a lot of different questions. You may wonder about what happens when you sell a stock; or how money moves to and from your Cash Balance. This article covers the basics of your Cash App Investing account and what you should know when opening your account.
What is a Cash App Investing account?
When you start investing with Cash App, you create a brokerage account with Cash App Investing LLC. Opening a brokerage account, sometimes referred to as an Investing account, allows you to buy and sell stocks and exchange traded funds (ETFs).
A few things to keep in mind about your Investing account:
The balance associated with your Investing account is different from your Cash App balance. This “stock balance” is the total current value of investments you’ve made. The securities in your Investing account are held by a third-party custodian, DriveWealth, LLC. The value of your Investing account is shown separately from your general Cash App balance.
When making a stock or ETF purchase, funds from your Cash App Balance are used to purchase the stock or ETF. If more funds are needed to cover the remainder of the transaction, they are pulled from your linked debit card to your Cash App Balance.
Any purchased stock or ETF bought through Cash App Investing LLC is held by our carrying broker, DriveWealth, LLC.
What happens to my Cash App Balance when I sell a stock?
Once your stocks and/or ETFs are officially sold, the funds from the sale(s) will be automatically transferred to your Cash App Balance. In other words, the Cash App Investing account holds the stocks or ETFs that you purchase, but it does not hold the funds you receive when you sell your shares. Once you sell your shares, those funds go to your Cash App Balance for you to use on Cash App however you like, including Cashing Out to your linked bank account.
Once the funds from stock sales are placed in your Cash App Balance, they are available to use. You can choose to buy more stocks, spend it on your Cash Card, send money to friends and family, or instantly Cash Out to your linked bank account, those funds are yours to spend.
Will my stock be bought or sold at a specific time?
Executing your stock transactions relies on market hours and holidays. In other words, trades may not happen as soon as they are scheduled. If you buy or sell stocks or ETFs outside of market hours, your sales proceeds will not be available in your Cash App Balance until the trade can be completed during the next market hours.
What is a zero-balance account and why is my Investing account considered one?
Cash App Investing accounts are considered “zero-balance” accounts. A zero-balance account (ZBA) is an account that maintains a cash balance of $0, but whenever you choose to buy stocks or ETFs, the purchase amount is transferred from your funding account (such as your Cash App Balance) to use for stock and/or ETF purchases within your Cash App Investing account. When you sell stock or ETFs, the proceeds of that sale (a “free credit balance”) are automatically transferred out of your Investing account at DriveWealth and to your Cash App Balance.
In the Cash App Investing Customer Account Agreement, you authorize and issue a standing instruction to Cash App Investing and the Carrying Broker to initiate transfers of funds out of your Cash App Investing Account into your Cash App Balance whenever there is a free credit balance. Your Cash App Balance is not Securities Investor Protection Corporation (“SIPC”) protected, but it may be subject to other protections. Your Cash App Balance funds may be eligible for FDIC insurance, see here for more details.