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Why Is My Fidelity Account Restricted? An Authentic Guide

why is my Fidelity account restricted

Account restrictions in Fidelity can be a frustrating experience for investors.

I also used to wonder why is my Fidelity account restricted?

This article aims to demystify the reasons behind account restrictions and provide practical solutions to overcome them. 

By understanding the common causes and consequences of account restrictions, investors can take proactive steps to ensure a smoother investment journey with Fidelity.

What are Fidelity account restrictions?

Account restrictions are limitations imposed on Fidelity accounts that restrict certain activities or access to specific features. 

These restrictions are primarily in place to ensure compliance with regulatory requirements and protect investors from potential risks. 

When an account is restricted, investors may face limitations on trading, withdrawals, or access to certain investments.


Why is my Fidelity Account Restricted? All The Common Causes Discussed

Good Faith Violations:

One of the most common causes of account restrictions in Fidelity is good faith violations. 

Good faith violations occur when investors buy securities with unsettled funds from a previous sale and then sell those newly purchased securities before the initial sale has settled. 

This violates the industry’s “free-riding” rule, which prohibits using the proceeds from a sale before the original purchase has settled.

Good faith violations can result in a 90-day restriction on the account, during which the investor will be unable to place any new trades using unsettled funds. 

It is important for investors to carefully track settlement periods and ensure they have sufficient settled funds before making additional trades.

To avoid good faith violations, investors should consider the following:

  • Understanding the settlement period: Familiarize yourself with Fidelity’s settlement period rules, which typically require trades to be fully settled within three business days.
  • Tracking settled funds: Keep a close eye on your account balance and ensure you have enough settled funds before engaging in new trades.
  • Utilizing cash alternatives: Consider using settled cash or margin accounts to avoid relying on unsettled funds for new trades.

Unsettled Cash Trading:

Another common cause of account restrictions in Fidelity is trading with unsettled cash. 

Fidelity, like other brokerages, imposes restrictions on trading with unsettled cash to prevent potential violations

This restriction is in place to comply with the industry’s “free-riding” rule, which seeks to prevent investors from using the proceeds of a sale before the original purchase has settled.

When trading with unsettled cash, investors risk committing a good faith violation, which can result in a temporary account restriction. 

The restriction usually lasts for 90 days and prohibits investors from making new trades with unsettled funds.

To avoid account restrictions due to unsettled cash trading, investors can consider the following:

  • Familiarizing yourself with the “free-riding” rule: Understand the industry’s rules and regulations regarding the use of unsettled funds and ensure compliance to avoid restrictions.
  • Utilizing margin accounts: Consider opening a margin account, which allows investors to trade with borrowed funds, subject to margin requirements and interest charges.
  • Planning ahead: Plan your trades in such a way that you have sufficient settled funds before making new trades, reducing the reliance on unsettled cash.

Social Security Verification Issues:

Account restrictions in Fidelity may also arise due to issues with social security verification. 

During the account registration process, Fidelity requires investors to provide accurate social security information. 

If there are inconsistencies or discrepancies in the provided information, the account may be restricted until the verification process is completed.

To resolve social security verification issues and lift the account restrictions, investors should consider the following steps:

  • Double-checking accuracy: Review and confirm that the social security information provided during account registration is accurate and up to date.
  • Contacting customer support: Reach out to Fidelity’s customer support to rectify any discrepancies. They will guide you through the verification process and help resolve the issue promptly.

Recent Transfers from Other Brokerages:

Transferring assets from another brokerage to Fidelity can sometimes trigger temporary account restrictions. 

Fidelity conducts a review of the transferred assets to ensure compliance with its policies and regulations. 

During the review process, the account may be restricted to prevent potential fraudulent activities.

To minimize potential account restrictions when transferring assets, investors should consider the following:

  • Communication with Fidelity: Proactively communicate with Fidelity before initiating the transfer, providing necessary documentation and details about the transfer.
  • Documentation: Ensure all required documents for the transfer are complete and accurate, reducing the likelihood of any delays or issues.
  • Prompt communication: Keep an open line of communication with Fidelity throughout the transfer process, addressing any inquiries or providing additional information promptly.


Unusual or Suspicious Activities:

Unusual or suspicious activities in an account can also lead to restrictions. Fidelity has robust systems in place to detect potentially fraudulent or suspicious activities. 

If any red flags are raised, such as a significant increase in trading volume, account takeovers, or unauthorized fund transfers, Fidelity may impose restrictions temporarily to investigate and protect the investor’s account.

To avoid account restrictions due to suspicious activities, investors should actively monitor their accounts, regularly update security measures, and promptly report any unauthorized activities to Fidelity’s customer support.

How to Resolve Fidelity Account Restrictions

Contacting Fidelity Customer Support:

When facing account restrictions, the first and most essential step is to contact Fidelity’s customer support. 

Fidelity provides multiple channels of support, including phone, live chat, and email. 

The support team is there to guide investors through the restriction resolution process and provide specific steps to regain access and functionality.

When contacting customer support, be prepared to provide your account details, explain the specific restriction you are facing, and answer any questions they may have. 

The support team will work with you to understand the cause of the restriction and provide guidance on resolving it.

Reviewing and Updating Account Details:

To prevent account restrictions, it is crucial to review and update personal and contact information regularly. 

Accurate and up-to-date information ensures smooth communication between Fidelity and the account holder. 

Investors should regularly review their account details and promptly update any changed details to avoid potential restrictions caused by outdated information.

Ensure that your contact information, including address, phone number, and email, is current and accurate. 

Review and update any changes in employment, income, or investment objectives as well. 

By keeping your account details up to date, you can minimize the chances of account restrictions arising from communication issues or outdated information.

Compliance with Fidelity’s Rules and Regulations:

To maintain a healthy and unrestricted account, it is crucial to comply with Fidelity’s rules and regulations. 

Familiarize yourself with Fidelity’s policies regarding trading, settlement periods, and account activities. 

By understanding and adhering to these guidelines, investors can avoid unnecessary account restrictions.

Some key points to consider for compliance with Fidelity’s rules and regulations include:

  • Settlement periods: Understand and follow Fidelity’s settlement period rules to avoid violations related to unsettled funds.
  • Day trading restrictions: Familiarize yourself with Fidelity’s day trading policies and regulations to ensure compliance and avoid potential restrictions.
  • Eligible securities: Ensure that the securities you are trading are eligible for trading on Fidelity’s platform to avoid any restrictions related to unauthorized or restricted investments.


Frequently Asked Questions

Do good faith violations go away on Fidelity?

Good faith violations are typically temporary and expire after 12 months. However, repeated violations can lead to more severe consequences.

Is a good faith violation considered bad?

Good faith violations are not considered positive, as they indicate a violation of industry regulations. Investors should aim to avoid such violations to maintain a healthy investment account.

How many good faith violations can you get on Fidelity?

While there is no specific limit to the number of good faith violations, repeated violations can lead to more severe consequences, including longer account restrictions or potential account closures.

How can I avoid good faith violations in Fidelity?

To avoid good faith violations, investors should ensure they have sufficient settled funds before making new trades and familiarize themselves with the industry’s settlement period rules.


In conclusion, account restrictions in Fidelity can disrupt investors’ experience and potentially limit their trading activities or access to certain investments. 

By understanding the common causes of these restrictions, such as good faith violations, unsettled cash trading, social security verification issues, and recent asset transfers, investors can take necessary precautions to avoid or minimize the impact of such restrictions. 

Additionally, by proactively resolving restrictions through direct communication with Fidelity’s customer support, reviewing and updating account details, and adhering to Fidelity’s rules and regulations, investors can navigate potential account restrictions more effectively and maintain a healthy investment journey.