Considering closing your E*TRADE account? Whether you're consolidating your investments, switching to another broker, or simply stepping away from active trading, knowing the right steps is crucial. This guide will walk you through the entire process, ensuring a smooth and hassle-free closure.
Ready to say goodbye to your E*TRADE account? Let's get started!
Step 1: Prepare Your Account for Closure - The Essential Pre-Checks
Before you even think about hitting a "close account" button (if one even exists directly!), there are several critical preparatory steps you must take. Skipping these could lead to delays, unexpected fees, or even tax complications.
Sub-heading 1.1: Emptying Your Account - No Loose Ends!
This is perhaps the most important step. Your E*TRADE account must have a zero balance and no active holdings to be closed.
Liquidate Your Investments: This means selling all your stocks, ETFs, mutual funds, options, and any other securities held within your E*TRADE account.
Consider the tax implications: Selling investments can trigger capital gains or losses. Consult a tax advisor if you're unsure how this will affect your personal tax situation, especially for IRAs or other retirement accounts where early withdrawals can incur penalties.
Be mindful of market fluctuations: If you're selling a significant portfolio, factor in potential market volatility.
Transferring Holdings (ACAT Transfer): If you want to move your existing investments to another brokerage, you'll need to initiate an Automated Customer Account Transfer (ACAT). This is often the preferred method as it avoids selling and repurchasing, which can save on trading fees and prevent immediate tax events.
Initiate the ACAT from your new brokerage: Typically, your new brokerage firm will initiate the ACAT transfer from ETRADE. You'll need your ETRADE account number and potentially a recent statement.
Be aware of transfer fees: E*TRADE charges a fee for outgoing full account transfers (currently around $75) and partial transfers (around $25). Factor this into your decision.
Allow ample time: ACAT transfers can take anywhere from 5 to 10 business days, and sometimes longer for paper requests.
Withdraw Remaining Cash: Once all investments are sold or transferred, ensure any remaining cash balance is withdrawn.
Electronic transfers (ACH): This is usually the easiest and most common method. ACH transfers typically take 1-3 business days.
Wire transfers: Faster, often same-day, but usually incur a fee (around $25 for outgoing wires from E*TRADE).
Check requests: E*TRADE generally doesn't charge for check requests.
Don't leave a small balance: Even a few cents can prevent closure. Ensure the balance is truly zero.
Sub-heading 1.2: Resolve All Pending Transactions and Obligations
Any outstanding orders, pending deposits or withdrawals, or unsettled trades will prevent account closure.
Cancel open orders: Make sure no buy or sell orders are still active.
Clear unsettled trades: Securities transactions typically settle in two business days (T+2). Ensure all trades have fully settled before attempting to close.
Pay off any margin loans or debit balances: If you have a margin account, all outstanding loans must be repaid in full. A negative balance will halt the closure process.
Address any active SIPs or mutual funds: If you have recurring investments like SIPs (Systematic Investment Plans) or active mutual fund purchases, you'll need to cancel them.
Release any pledged holdings: If any of your holdings are pledged as collateral, these must be released.
Sub-heading 1.3: Download Important Documents
Once your account is closed, you might lose easy access to historical statements and tax documents.
Tax documents: Download all past tax forms (e.g., Form 1099-B for capital gains/losses). You'll need these for future tax filings.
Account statements: Keep records of your monthly and annual statements.
Trade confirmations: These can be useful for your personal records.
It's highly recommended to save these digitally and/or print hard copies for your records. E*TRADE retains records for several years, but direct access might be restricted.
Step 2: Contact E*TRADE Customer Service - The Direct Approach
Once your account is fully prepared, the next step is to directly inform ETRADE of your intention to close the account. While some platforms offer online closure, ETRADE generally requires a direct interaction for account termination.
Sub-heading 2.1: The Preferred Method - Phone Call
The most efficient way to initiate account closure with ETRADE is by calling their customer service.*
ETRADE Customer Service Number:* Call 800-387-2331 (within the US) or +1-678-624-6210 (from outside the US or Canada).
Be prepared for verification: Have your account number and other personal identification details ready to confirm your identity.
Clearly state your intent: Inform the representative that you wish to close your E*TRADE account.
Ask about any remaining steps or fees: The representative will guide you through any final requirements and confirm if there are any outstanding fees (like the outgoing transfer fee if you opted for an ACAT).
Request confirmation: Ask for a confirmation number or an email confirming your closure request. This provides a paper trail.
Be prepared for retention efforts: Customer service representatives may inquire about your reasons for closing and might offer incentives to keep your account open. You are not obligated to accept these offers.
Sub-heading 2.2: Alternative Method - Written Request (Mail or Fax)
While less immediate, you can also submit a written request.
Prepare a formal letter: Include your full name, E*TRADE account number, contact information, and a clear statement of your intent to close the account.
State the reason for closure: While not always mandatory, providing a brief reason can sometimes streamline the process.
Sign the letter: Ensure all account holders sign the letter if it's a joint account.
Mail or Fax:
General fax number: 1-866-650-0003
Fax from outside the US: +1-678-624-6950
Mailing address: You may need to ask customer service for the specific mailing address for account closures, as it can vary.
Keep a copy: Always retain a copy of the letter for your records.
Expect longer processing times: Written requests generally take longer to process than phone calls.
Step 3: Confirmation and Follow-Up - Ensuring Finality
After submitting your closure request, it's essential to follow up to ensure the process is complete.
Sub-heading 3.1: Monitor Your Account and Communications
Check for email confirmations: E*TRADE typically sends email notifications regarding account status changes.
Log in periodically (if still accessible): While your access might be revoked quickly, try logging in after a few business days to see if the account shows as closed or deactivated.
Review final statements: You may receive a final statement confirming the zero balance and account closure.
Sub-heading 3.2: Verify Closure
Wait for official confirmation: E*TRADE will officially confirm the account closure once all internal processes are complete. This can take a few business days to a couple of weeks, depending on the complexity of your account.
Contact customer service again if needed: If you don't receive confirmation within a reasonable timeframe, don't hesitate to call customer service again to check the status.
Important note on record retention: Even after closure, E*TRADE (as part of Morgan Stanley) will retain your historical data in compliance with regulatory requirements.
Implications of Closing Your E*TRADE Account
Loss of access: You will no longer be able to log in to your E*TRADE account or use any of its trading platforms or features.
Tax implications: As mentioned, selling assets can trigger capital gains/losses. Closing an IRA early (before age 59½) can result in a 10% IRS penalty and income tax on distributions.
Account fees: While E*TRADE generally doesn't have inactivity fees, be aware of any outgoing transfer fees if you're moving assets.
Loss of historical data: Although E*TRADE retains records, your direct access to historical statements and tax documents will cease. Ensure you've downloaded everything you need.
Linked accounts: Remember to update any external accounts (banks, bill pay services) that were linked to your E*TRADE account to prevent transaction errors.
Frequently Asked Questions (FAQs)
How to Prepare My E*TRADE Account for Closure?
You need to liquidate all investments, transfer any holdings to another brokerage (ACAT), and withdraw all remaining cash to bring the account balance to zero. Also, resolve any pending transactions or outstanding obligations.
How to Transfer My Investments from E*TRADE to Another Brokerage?
You can initiate an ACAT (Automated Customer Account Transfer) from your new brokerage firm. They will typically handle the transfer process, but be aware of E*TRADE's outgoing transfer fees.
How to Withdraw All Funds from My E*TRADE Account?
Once your investments are liquidated, you can withdraw cash via ACH transfer (usually free, 1-3 business days), wire transfer (faster, but may incur a fee), or by requesting a check (usually free).
How to Contact E*TRADE Customer Service for Account Closure?
The most direct way is to call them at 800-387-2331 (US) or +1-678-624-6210 (international). You can also send a written request via mail or fax.
How to Know if My E*TRADE Account is Fully Closed?
E*TRADE will typically send an email confirmation. You can also try logging in after a few business days; if the account is closed, you won't be able to access it or it will show as deactivated.
How to Avoid Fees When Closing My E*TRADE Account?
If you're transferring out, the outgoing ACAT fees are generally unavoidable. However, by emptying your account and avoiding margin balances, you'll prevent other potential charges.
How to Get My Tax Documents After Closing My E*TRADE Account?
It's crucial to download all your tax documents before closing. While E*TRADE retains records, your direct access will be limited after closure. Contact customer service for assistance if you need documents from a closed account.
How to Reopen a Closed E*TRADE Account?
Once an ETRADE account is officially closed, it cannot be reopened. You would need to apply for and open a new account with ETRADE if you wish to invest with them again.
How to Close an E*TRADE IRA Account?
Closing an IRA involves similar steps, but be extremely careful about potential tax implications and early withdrawal penalties if you are under 59½. Consider a direct rollover to another qualified retirement account to avoid these penalties.
How to Deal with Any Remaining Small Balance in My E*TRADE Account?
Even a tiny balance can prevent closure. Ensure you've transferred or withdrawn every last cent. If it's a residual amount after all other efforts, you may need to speak with customer service about how they handle such small remaining sums.
