How many days after stock exit can the funds be credited? A complete analysis of the Taiwan-US settlement system

Investors New to the Market Must Read: How Many Days Does It Take to Withdraw Funds After Selling Stocks? The Settlement Rules for Taiwan and US Stocks Differ Significantly! As more people dive into the stock market, a common question has surfaced—how long do you have to wait after selling stocks to access your cash? What are the differences in settlement systems between Taiwan’s stock market and the US stock market? This article will answer these questions one by one.

Taiwan vs US Stocks: Settlement Time Comparison

Evolution of Taiwan Stock Settlement Rules

Taiwan’s stock market has long adopted a “T+2” settlement system. In simple terms, if you sell stocks on Monday, you will receive the funds on Wednesday. Here, “T” represents the trading day, and “+2” indicates two business days.

To improve trading efficiency, the Taiwan Securities Exchange launched a “T+0” mechanism in May 2022, allowing investors to settle and access funds on the same day they sell. However, this service has a hidden cost—you are effectively borrowing money from your broker, who advances the funds you would normally receive after two days, and you need to pay interest (usually around 5%) to the broker.

Currently, brokers such as Fubon Securities, Yuanta Securities, and others have opened T+0 application services.

US Stock Settlement Rules

US stocks also use a “T+2” system, meaning you must wait two business days after selling stocks to access the funds. This rule has been in place since September 2017, when the US shifted from the original “T+3” system.

Key Account Differences US Investors Must Know

In US stock trading, different account types correspond to entirely different settlement rules and trading restrictions.

Restrictions of Cash Accounts

Cash accounts require investors to wait until the settlement (T+2) is complete before making another trade. If you buy stocks with unsettled funds and sell before settlement, it violates regulations.

Two common violations can lead to a 90-day account freeze:

Scenario 1: Day-trading (buy and sell on the same day) within a cash account, resulting in unsettled funds being used for new trades.

Scenario 2: Selling stocks that are not fully paid for. For example, your account has $100, and you place an order to buy a stock that suddenly rises in price, causing the purchase to cost $120. If your funds are insufficient and the stock isn’t fully paid, you must deposit at least $20 within five business days to sell the stock; otherwise, a 90-day restriction applies.

Effective ways to avoid freezing:

The first is to deposit sufficient funds before trading to ensure you have enough to cover any transaction. The second is to upgrade to a margin account.

Flexibility of Margin Accounts

When your total assets exceed $25,000, you can open a margin account, which completely removes the T+2 restriction, allowing unlimited buying and selling.

Advantages of margin accounts include: supporting short selling, borrowing funds from the broker for trading, and trading a variety of securities such as stocks, ETFs, options, etc. However, the account opening threshold is higher (usually requiring an initial deposit of over $2,000), making it more suitable for active traders.

Core differences table between the two account types:

Want to Enjoy Same-Day Settlement with Small Investments?

If your investment amount is small and you want funds to settle on the same day, are there other options?

Contracts for Difference (CFD) is a viable alternative. CFD trading involves speculating on price movements rather than owning the underlying asset, supporting both long and short positions, and offering high leverage. Investors can trade not only stocks but also forex, gold, oil, cryptocurrencies, and more.

For example, with Tesla, using 10x leverage to buy 1 share costs about $20. CFDs also support stock index trading (like NASDAQ 100), with leverage up to 200x.

Deposits and withdrawals via CFDs are completed on the same day, and many platforms do not charge withdrawal fees, making it highly practical for investors who need efficient capital flow.

How Many Days Does It Take for US Stock Deposits to Clear?

Compared to the withdrawal restrictions after selling stocks, US stock deposits are much faster. Funds deposited on the same day are usually available for trading on the same day.

However, the exact timing depends on your chosen method. Taiwanese investors trading US stocks mainly do so via direct US broker accounts or through Taiwanese brokers via omnibus accounts.

US broker deposits are almost instant. If you choose the Taiwanese broker omnibus method, you need to follow each broker’s rules—generally, if you complete bank deposits before 8 PM, you can start trading US stocks on the same day.

Summary

Whether trading Taiwan stocks or US stocks, understanding the settlement system is crucial for every investor. Choosing the right trading method and account type helps balance capital efficiency and risk management.