What does T+1 settlement mean when I buy or sell a stock?

T+1 settlement means a stock or ETF trade officially completes one business day after you place it — "T" is the trade date, and the actual exchange of shares and cash happens the next business day. The U.S. market moved from T+2 to T+1 in May 2024, so settlement is now faster. In practice this rarely affects everyday buy-and-hold investors: when you buy, the shares show in your account immediately and you simply need the cash available. It matters most when you sell and want to withdraw the proceeds — the money isn't truly available to transfer to your bank until settlement completes, typically the next business day. In a cash account, buying with unsettled proceeds before they settle can trigger a "good faith violation," so wait for funds to settle or keep settled cash on hand.