Glossary · Defined term
Settlement date
The settlement date is when a trade officially completes; U.S. stocks settle one business day after the trade (T+1).
Last updated Oct 2, 2026
What it means
The settlement date is the date a securities trade officially completes, when ownership of the shares and payment of cash actually change hands. In the United States, stocks settle one business day after the trade date, a cycle known as T+1. The trade date is when you agree to the deal; the settlement date is when it becomes final.
Settlement matters most around dividends. To receive a dividend, you must buy the stock before its ex-dividend date, and the settlement cycle is built into that cutoff: the record date, when the company checks its shareholder list, falls one business day after the ex-dividend date under T+1. Buy on or after the ex-dividend date and the dividend goes to the seller.
For most investors settlement is invisible plumbing handled by brokers and clearinghouses. It becomes relevant when you need the cash from a sale: the proceeds are generally not available to withdraw until settlement completes, though many brokers let you trade with unsettled funds under their own rules.
An example
For illustration, you buy shares on Monday. Under T+1 settlement, you officially become the owner on Tuesday, and the cash leaves your account then, not on Monday when you placed the order.