5 Reasons Why Robinhood Can’t Buy Stock In 2024? [How To Fix?]

You're probably here because you've tried to buy stock on Robinhood but received an unexpected error: "Robinhood can't buy stock." It's frustrating, especially when the market is in full swing and every second counts. But don't sweat it; you're not alone to face this problem.

Whether you're a seasoned investor or a rookie dipping your toes into the world of stocks for the first time, glitches like these can be incredibly annoying.

Understanding why it's happening and what steps you can take to troubleshoot this issue can make all the difference. Sit tight, and let's get your Robinhood account back in action.

5 Reasons Why Robinhood Can’t Buy Stock?

It's a huge bummer when you're excited to add a brand new stock to your portfolio, but Robinhood frustratingly won't let you do so.

However, most of these issues are associated with account maintenance or security measures rather than operational glitches from Robinhood's end. So, what exactly could be holding up the show? Here are five probable culprits.

Company Control Person

A Company Control Person is an individual who has the power to direct or cause the direction of the management and policies of a company. If you fall into this category or become associated with a control person for a publicly traded company, you may encounter restrictions on Robinhood.

Robinhood has implemented specific rules in line with federal regulations regarding such individuals. If you're labeled as a 'Company Control Person', you can't purchase shares of the company you're involved with through Robinhood's platform.

This restriction is intended to prevent potential insider trading, upholding fairness and transparency within the stock market. It's a protective measure designed to maintain equity among all traders.

Transparency is key in Robinhood’s policies, so communicate appropriately with their support personnel if you suspect your restrictions relate to being considered a 'Company Control Person.'

Bank Transfer Reversals

A bank transfer reversal occurs when a scheduled bank transfer to Robinhood gets canceled for various potential reasons. It's crucial to understand these reasons to prevent encountering this problem in the future. Here are some of the common scenarios:

• Insufficient Funds: This is probably one of the most common causes. If you don't have enough money in your bank account to cover the purchase order, it stands to reason that your transaction will be reversed.
• Incorrect Account Type: Certain account types do not support Automated Clearing House (ACH) transactions, which is how Robinhood routes your orders. Your transfer could be reversed if you're trying to fund your Robinhood account from a non-ACH-compliant account.
• Duplicate Transactions: On occasion, duplicate transactions can cause a bank reversal. If two identical transfers coincide or within a short timeframe, it might trigger a red flag, causing one or both transactions to be reversed.
• Declined Transfer: Sometimes, even if you have sufficient funds and an ACH-enabled account, your bank might still decline the transaction due to internal policies or security reasons.

Also Read: Accounting Automation 2024 [Pros, Cons & How To Get Started]

Incorrect or Outdated Account Information

Your Robinhood account relies on the personal data you've provided. If this information is incorrect or outdated, it could lead to restrictions, including the inability to buy stocks.

• Personal Information: Your name, social security number, or date of birth must match exactly the information on your government-issued identification. If it doesn't match, it could prompt an account restriction.
• Banking Information: Robinhood requires your banking details for fund transfers. If there are amendments in your banking information (like a new or closed bank account), and you fail to update these on Robinhood, you may be unable to buy stocks.

Fraud Inquiries

Fraud inquiries are essential to ensuring the integrity of transactions and customer data. Whenever there is suspicion or a report of fraudulent activity, Robinhood implements certain precautionary steps that could lead to temporary trading restrictions.

• Inquiry Trigger: When account abnormalities or suspicious activities are detected – rapid high-value trades, account access from different locations, or inconsistencies in personal data – they automatically trigger a fraud inquiry. This results in your purchasing ability being put on hold.
• Account Review: During the inquiry, your account is thoroughly reviewed. Robinhood will take these precautions to protect you and your assets whenever unusual activity is detected. This hands-on scrutiny ensures they do their best to protect their customers from fraud.
• Removing Restrictions: If no fraudulent activities are found, the restrictions should be lifted automatically once the inquiry concludes. If not, you should contact Robinhood's customer support team through their Contact Us page to expedite the process.

Account Levies

An account levy is a serious issue. It's a court-approved legal seizure of assets, which can affect your ability to operate your Robinhood account.

When you owe money to a debt collector or other entity, they may file a lawsuit against you. The court may impose a levy on your banking and investment accounts to recover the money if the court rules.

In these circumstances, Robinhood is legally obliged to freeze trading and withdrawals from your associated accounts until the levy has been lifted or fulfilled. Consequently, if you cannot buy stock through Robinhood, it could be due to an account levy.

Also Read: How To Close A Robinhood Account 2024 [Close Or Transfer]

Why Don't I See a Buy Button?

When you can't locate the "Buy" button on your Robinhood app, three scenarios could usually contribute to its absence. Here's what might be happening:

• Foreign Stocks: If the stock you want to purchase is foreign, Robinhood won't support it. The platform primarily caters to domestic U.S. securities and a few international securities. Consequently, if the company you are interested in is based overseas and not listed on U.S. exchanges, there's likely no "Buy" button.
• Over-the-counter (OTC) Stocks or Warrants: OTC stocks or warrants are also not supported on Robinhood. OTC stocks are shares from companies that are not listed on standardized exchanges. Likewise, warrants provide the holder the right to buy a company’s stock at certain prices and times; such options aren't available with this platform.
• Stocks Undergoing Corporate Action: If a stock is undergoing corporate action, like mergers, acquisitions, or share splits, among other corporate restructuring activities, Robinhood will temporarily disable the buy/sell button until these actions get resolved.

Also Read: Robinhood Unsettled Funds In 2024 [Important Things To Know]

Why Can’t I Place a Buy Order on Crypto?

This is a question that many Robinhood users find themselves asking. Before diving into the specifics, it's crucial to note that buying cryptocurrencies on Robinhood functions differently than traditional stocks. Unlike stocks, you cannot trade cryptocurrencies with Robinhood on margin.

Insufficient Margin Equity

If you're utilizing a margin account, it carries a few requirements - one of those being maintaining the minimum margin.

If your account equity dips below $2,000 (required margin minimum), you may be unable to place trades, including buying cryptocurrencies. Check your equity levels if you get stuck trying to place an order.

Inadequate Buying Power

As for buying power, this represents the total amount available in your account to purchase securities or cryptocurrencies. If your purchasing power isn't sufficient to place a trade, you won't be able to buy the crypto asset of your choice.

Restricted from Trading

Finally, you may face restrictions if Robinhood prevents your account from trading due to non-compliance with usage terms or receipt of high-risk warnings. If there's an issue with your identity verification or compliance-related problem, this is likely where it lies.

How To Fix: Robinhood Can't Buy Stock?

Don't panic if Robinhood won't let you buy stocks. Here are the quick fix steps that could help you troubleshoot and get back to trading in no time:

Check Your Account Balance

First things first. Ensure you have sufficient funds in your account. If you see a "Not Enough Buying Power" error, that means there are insufficient funds. Simply deposit more funds into your account or sell off some securities to free up capital.

Also Read: Is Robinhood Available In Canada? [2024 latest Guide]

Update Your Account Information

Double-check your account information, including your connected bank accounts and personal information. Make sure everything is accurate and up-to-date. The quickest way to do this is by clicking on "Account" at the bottom-right corner of the screen and selecting "Settings."

Contact Your Bank

If transfers continue being reversed despite having sufficient funds and a properly configured account, it might be worth contacting your bank's customer service team. They can often provide more insight into why transactions are not going through.

Engage Robinhood Support

Still stuck? Contact Robinhood Support for further assistance. You can reach them through their Contact Us page.

How do we prevent bank transfer reversals?

Preventing bank transfer reversals isn't rocket science, but it does require some vigilance. Here's a step-by-step guide on how to ensure your transactions go through as smoothly as possible:

Maintain Sufficient Funds

Always ensure that you have an adequate balance in your bank account when starting the transfer process. Remember, the transactions could take up to 5 business days to complete, so keeping sufficient funds available for this duration is recommended.

Ensure Your Account is compatible with ACH transfers

Check with your bank to ensure your account can handle standard outgoing ACH transfers - this will avoid any technical glitches or reversals due to incompatible systems.

Avoid Limited Monthly Transactions

Take note of how many transfers you make each month. Some banks enforce a limit on monthly ACH transfers - including microdeposits - which means you could inadvertently trigger a bank reversal if you exceed these limits.

Also Read: Robinhood Vs Acorns Vs Stash Invest - Which One is Right for You?

FAQs About Robinhood Can’t Buy Stock

Conclusion

Effectively using the Robinhood platform requires a thorough understanding of specific limitations and procedures.

Whether these obstacles stem from being a Company Control Person or experiencing Bank Transfer Reversals, going the extra mile by engaging with Robinhood's support staff or maintaining caution with financial transactions can clear the path for stress-free trading.

Avoid common pitfalls, such as underfunding your account or using incompatible banks, to help keep your trading experience on Robinhood smooth and productive.