Settled cash is money in your Fidelity account that is fully available to use

Settled cash is the portion of your account balance that has completed the standard settlement period and is ready to spend, transfer, or invest. When you sell a stock, mutual fund, or other security, the proceeds don't land in your account instantly — they take time to clear. Once that clearing period ends, the money becomes settled cash.

The settlement period for most stock and mutual fund sales is two business days after the trade date. For some investments like options or bonds, the timeline may differ. Until settlement completes, the money sits in a holding state and cannot be withdrawn or used to buy new investments.

Understanding the difference between settled and unsettled cash matters because Fidelity enforces rules about what you can do with each type. Using unsettled cash to buy securities can trigger a good-faith violation on your account, which carries real consequences.

Key Takeaways

  • Settled cash is available immediately for any use — withdrawals, new purchases, or transfers — while unsettled cash is still clearing and cannot be used.
  • Most stock and mutual fund sales settle in two business days; you can check the exact settlement date for any trade in your Fidelity account history.
  • Using unsettled cash to buy securities triggers a good-faith violation, and three violations in 12 months can freeze your account for 90 days.
  • You can see your settled and unsettled cash balances separately in the Account Summary section of your Fidelity account.

How settlement timing works

When you sell a security, Fidelity records the trade on the trade date, but the actual transfer of funds takes time. The buyer's bank and your bank must coordinate the exchange, which is why there is a waiting period. For stocks and most mutual funds, this period is T+2 — the trade date plus two business days.

The two-day clock counts only business days, so a sale on a Friday settles on Tuesday. A sale on a Monday settles on Wednesday. Weekends and market holidays do not count toward the settlement period.

Some investments settle on different schedules. Treasury securities and certain bonds may settle on T+1 (one business day). Options typically settle on T+1 as well. Money market funds and some other instruments may have their own rules. Fidelity displays the settlement date for each trade when you confirm the sale, so you can see exactly when the cash will be available.

The difference between settled and unsettled cash

Your Fidelity account shows two separate cash balances: settled and unsettled. Settled cash is yours to use without restriction. Unsettled cash is money from recent sales that is still in the clearing process.

You can use settled cash to buy securities, withdraw it to your bank account, or transfer it elsewhere. You cannot do any of these things with unsettled cash. If you try to buy a security using unsettled cash, Fidelity will flag it as a good-faith violation.

The total of settled plus unsettled cash equals your available cash balance. If you see a large unsettled amount, it means you have recent sales that have not yet cleared. Once the settlement date passes, that money moves automatically from unsettled to settled.

Good-faith violations and account restrictions

A good-faith violation occurs when you sell a security and use the proceeds to buy another security before the sale has settled. Fidelity's system detects this automatically. The violation itself does not cost you money, but it does create a record on your account.

If you accumulate three good-faith violations within a 12-month rolling period, Fidelity will restrict your account for 90 days. During a restriction, you can only buy securities using settled cash or cash from sales that have already cleared. You cannot buy on margin or use unsettled proceeds.

The 90-day restriction is enforced by the Financial Industry Regulatory Authority (FINRA), not by Fidelity alone. Even if you move to a different brokerage, the violation history follows you because it is recorded in the industry system.

How to check your settled cash balance

Log into your Fidelity account and go to the Account Summary page. Near the top, you will see a section labeled "Cash" or "Account Balance" that breaks down your settled and unsettled amounts separately. The settled figure is the amount you can use right now.

You can also see settlement dates for individual trades by going to your transaction history or trade confirmations. Fidelity shows the trade date and the settlement date side by side, so you know exactly when each sale will clear.

If you are unsure whether a particular sale has settled, the easiest approach is to check your account summary. If the cash appears in the settled column, it is available for use.

Practical steps to avoid violations

The simplest way to avoid good-faith violations is to wait for sales to settle before using the proceeds. If you sell a stock on Monday, wait until Wednesday to buy something else with that money. This two-day buffer eliminates the risk.

If you frequently trade and need cash immediately, consider keeping a separate pool of settled cash in your account that you use for new purchases. This way, you are not tempted to use unsettled proceeds. You can replenish the pool once your sales settle.

Another option is to use a margin account if you are a more active trader, though this comes with its own rules and fees. A margin account allows you to borrow against settled cash, which gives you more flexibility — but you pay interest on the borrowed amount and must maintain a minimum balance.

What happens if you receive a violation

If you trigger a good-faith violation, Fidelity will send you a notification. The violation is recorded on your account, but you can continue trading normally unless you accumulate three violations in 12 months.

If you do hit the three-violation threshold, Fidelity will notify you that your account is being restricted for 90 days. During the restriction, you will not be able to buy securities using unsettled cash. The restriction lifts automatically after 90 days.

If you believe a violation was recorded in error, you can contact Fidelity's customer service to review the trade. In rare cases, they may reverse a violation if there is a legitimate reason for the timing issue.

Frequently Asked Questions

Can I withdraw unsettled cash from my Fidelity account?

No. Unsettled cash cannot be withdrawn to your bank account or transferred elsewhere. You must wait for the settlement period to complete. Once the cash settles, it becomes available for withdrawal immediately.

Does a good-faith violation cost me money?

The violation itself does not result in a fee or fine. However, if you accumulate three violations in 12 months, your account will be restricted for 90 days, which limits your trading flexibility. Some traders view this as a cost because it prevents them from executing certain strategies.

What if I sell a security on Friday — when does it settle?

A sale on Friday settles on Tuesday of the following week, since the settlement period is two business days and weekends do not count. Your Fidelity confirmation will show the exact settlement date when you complete the sale.

Can I use settled cash from one sale to buy a security before another sale settles?

Yes. You can use settled cash freely. Good-faith violations only occur when you use unsettled cash (proceeds from a recent sale) to buy a security before that sale has settled. Mixing settled and unsettled cash is fine as long as you do not spend the unsettled portion.

Does a margin account eliminate settlement periods?

No. Settlement periods still apply to all trades. A margin account allows you to borrow against your settled cash to buy securities immediately, but you pay interest on the borrowed amount. This is a different tool than waiting for settlement, and it comes with its own risks and costs.