Ready to move on from ETRADE? Whether you're consolidating your investments, switching to a different platform, or simply exiting the market, closing your ETRADE account requires a careful and systematic approach. It's not as simple as clicking a "delete" button, especially when you have assets involved. But don't worry, we're here to guide you through every step of the process to ensure a smooth and hassle-free closure.
Let's Get Started! Are You Ready to Say Goodbye to E*TRADE?
Before we dive into the nitty-gritty, take a moment to consider why you're closing your account. Are you transferring assets to another broker? Selling everything and cashing out? Understanding your ultimate goal will help you navigate the process more efficiently. Once you're clear on your objective, you're ready to proceed!
Step 1: Prepare Your E*TRADE Account for Closure
This is arguably the most crucial step. You cannot close an E*TRADE account that has active positions, outstanding balances, or pending transactions. Think of it like moving out of a house – you need to empty it completely before you hand over the keys!
Sub-heading: Emptying Your Account – What to Do with Your Assets
You have two primary options for the assets held within your E*TRADE account:
Option A: Sell All Your Holdings and Withdraw Cash
Selling Your Investments: If you decide to sell all your stocks, ETFs, mutual funds, or other securities, be aware of the potential implications:
Tax Consequences: Selling investments can trigger capital gains or losses, which will need to be reported on your taxes. Short-term gains (assets held for one year or less) are typically taxed at ordinary income rates.
Settlement Period: Stock trades usually take two business days (T+2) to settle. This means the cash from your sales won't be available for withdrawal immediately. Plan accordingly!
Withdrawing Your Cash: Once your trades have settled and all your funds are available as cash, you can withdraw them.
Linked Bank Accounts: The easiest way is to transfer the funds electronically to a linked external bank account via ACH transfer. This typically takes 1-3 business days.
Wire Transfers: For faster access to funds, you can initiate a wire transfer, though these usually incur a fee from E*TRADE.
Check Request: You can also request a physical check, which will be mailed to your registered address.
Option B: Transfer Your Holdings to Another Broker (ACAT Transfer)
What is an ACAT Transfer? An Automated Customer Account Transfer (ACAT) allows you to move eligible securities from one brokerage firm to another without selling them. This is often the preferred method if you're simply switching brokers, as it avoids potential tax events from selling.
Initiating the Transfer:
Contact Your New Broker: In most cases, you'll initiate the ACAT transfer from your new brokerage firm. They will typically provide the necessary forms and often handle much of the coordination with E*TRADE.
E*TRADE's Role: E*TRADE will facilitate the transfer once they receive the request from your new broker.
Potential Fees: E*TRADE charges a transfer-out fee for ACAT transfers (as of 2024, this is typically around $75, but always verify current fees). Your new broker might also have fees.
Transfer Time: ACAT transfers usually take 5-7 business days, but can sometimes take longer depending on the complexity of your holdings.
Non-Transferable Assets: Be aware that some assets, like proprietary mutual funds or certain fixed-income securities, might not be transferable and would need to be liquidated.
Sub-heading: Clearing All Debts and Pending Items
Zero Balance Requirement: Ensure there is absolutely no debit balance in your account. If you have a negative balance, you'll need to deposit funds to clear it before E*TRADE will process a closure request.
Margin Loans: If you have a margin account, any outstanding margin loans must be fully repaid.
Pending Transactions: Make sure there are no pending trades, deposits, or withdrawals. Allow all transactions to fully settle.
Recurring Transfers: Cancel any recurring deposits, direct debits, or bill payments linked to your E*TRADE account.
IRA Considerations: If you are closing an IRA, be mindful of potential tax consequences, especially if you are under 59½, as early withdrawal penalties may apply. Consult a tax advisor if you have questions.
Step 2: Contact E*TRADE Customer Service
Once your account is financially clear and all assets are handled, it's time to officially inform E*TRADE of your intention to close the account.
Sub-heading: Reaching Out to the Right Department
Phone Call (Recommended): The most direct and often quickest way to initiate a closure is by calling E*TRADE's customer service.
General Customer Service: You can typically reach E*TRADE at 1-800-387-2331. Be prepared to provide your account number and verify your identity.
Be specific about your intent to close the account. They may try to offer alternatives or incentives to keep your business, but firmly state your decision if you're sure about closing.
Message Center/Online Request:
Login Online: Log in to your E*TRADE account on their website or through the mobile app.
Navigate to Message Center: Look for a "Message Center," "Account Services," or "Contact Us" section.
Send a Secure Message: Select "Account Services" from the messaging menu and compose a request to close your account. Be clear and concise.
Written Request (Mail/Fax): While less common today, you can also submit a written request.
Mail: E*TRADE from Morgan Stanley, PO Box 484, Jersey City, NJ 07303-0484.
Fax: General fax number: 1-866-650-0003 (From outside the US: +1-678-624-6950).
Include your account number, full name, contact information, and a clear statement of your request to close the account. A signed letter is usually required for formal requests.
Sub-heading: What to Expect During the Conversation
Verification: E*TRADE representatives will ask security questions to verify your identity.
Account Review: They will review your account to ensure all conditions for closure (zero balance, no open positions, etc.) are met.
Confirmation of Intent: They may ask for the reason for your closure, but you are not obligated to provide a detailed explanation.
Next Steps: The representative will confirm the steps they will take and any further action required from your end. Ask for a confirmation number or a timeline for the closure.
Step 3: Formalizing the Account Closure Request
Depending on your initial contact method and the type of account, you may need to complete additional paperwork.
Sub-heading: Completing Necessary Forms
Account Closure Form: E*TRADE might require you to fill out a specific "Account Closure Form." This form typically asks for:
Your account number
Your personal details
Confirmation that you've addressed all assets and liabilities
Your reason for closure (optional, but sometimes requested)
Your signature(s) – especially important for joint or corporate accounts where all account holders may need to sign.
Digital vs. Physical: While some aspects can be handled digitally, in certain circumstances (like complex accounts or if you opt for a written request), original signed documents may need to be mailed in.
Step 4: Confirming Final Account Status and Post-Closure Actions
The process isn't over until you have definitive confirmation that your account is closed.
Sub-heading: Verification and Follow-Up
Confirmation Email/Message: E*TRADE typically sends an email or secure message confirming the account closure once it's processed. Keep this for your records.
Check Online Access: Attempt to log in to your E*TRADE account a few business days after receiving confirmation. If you cannot log in or if the account no longer appears, it's a good sign it has been successfully closed.
Monitor for Residual Activity: For a few weeks after closure, monitor your linked bank accounts and credit reports for any unexpected activity related to E*TRADE. This helps catch any administrative errors.
Download Statements: Before your account is officially closed and access is disabled, download all your historical statements, trade confirmations, tax documents (like 1099s), and any other important records. You will need these for tax filing and future reference. Once the account is closed, it can be difficult or impossible to access these documents online.
Step 5: Update External Connections (If Applicable)
If your E*TRADE account was linked to other financial services or subscriptions, remember to update those connections.
Sub-heading: Adjusting Your Financial Ecosystem
Automated Deposits/Withdrawals: If you had direct deposits (like paychecks) or automated bill payments set up to or from your E*TRADE account, ensure these are redirected to your new account.
Financial Aggregators: If you use budgeting or financial tracking apps (like Mint, Personal Capital, etc.) that were linked to E*TRADE, update or remove the connection.
Frequently Asked Questions about Cancelling Your E*TRADE Account
Here are 10 common questions and their quick answers related to closing an E*TRADE account:
How to initiate the E*TRADE account closure process?
You can initiate the closure process by contacting E*TRADE customer service by phone (1-800-387-2331), through their online Message Center, or by sending a written request.
How to empty my E*TRADE account before closing?
You can either sell all your investments and withdraw the cash, or transfer your securities to another brokerage firm using an ACAT transfer.
How to transfer funds out of E*TRADE?
You can transfer funds to a linked external bank account via ACH, request a wire transfer (may incur fees), or request a physical check.
How to transfer investments from E*TRADE to another broker?
Initiate an ACAT (Automated Customer Account Transfer) request with your new brokerage firm, who will then coordinate with E*TRADE.
How to know if my E*TRADE account has a debit balance?
Log in to your E*TRADE account online or through the app and check your account summary for any negative balances or outstanding loans.
How to get my tax documents after closing my E*TRADE account?
It is highly recommended to download all tax documents and statements before closing your account. If you forget, you may need to contact E*TRADE customer service to request copies, though online access will likely be disabled.
How to avoid fees when closing an E*TRADE account?
While E*TRADE generally doesn't charge a fee for closing a standard brokerage account, be aware of potential transfer-out fees for ACAT transfers (around $75) and any wire transfer fees if you opt for that withdrawal method. Liquidating assets may also incur trading commissions depending on your account type and what you trade.
How to close a joint E*TRADE account?
For joint accounts, usually all account holders will need to sign the closure request form. It's best to confirm the exact requirements with E*TRADE customer service.
How to reactivate a dormant E*TRADE account instead of closing it?
If your account became dormant due to inactivity, you might be able to reactivate it by logging in or contacting customer service. Sometimes, a Re-KYC (Know Your Customer) verification is required for reactivation, especially if inactive for a long period (e.g., over 24 months).
How to check the status of my E*TRADE account closure request?
You can call E*TRADE customer service or check your online Message Center for updates on your closure request. They may also send you an email confirmation.