Here is a very lengthy and detailed guide on how to close your Vanguard account.
A Step-by-Step Guide to Closing Your Vanguard Account
So, you've decided to part ways with Vanguard. Perhaps you're consolidating your investments, moving to a different brokerage, or simply cashing out. Whatever the reason, closing an investment account requires careful planning and execution to avoid unexpected fees, tax implications, and delays. Don't worry, we're here to walk you through the entire process.
Ready to get started? Let's dive in!
How Do I Close My Vanguard Account |
Step 1: Get Prepared and Understand Your Options
Before you even think about hitting the "close account" button, you need to understand what's in your account and what you want to do with it. This is arguably the most important step. Think of it as a financial check-up before a big procedure.
Inventory Your Assets: Log in to your Vanguard account. Take a good look at all your holdings. Are they mutual funds, ETFs, individual stocks, or a mix? Do you have a brokerage account, a retirement account (like an IRA or 401(k)), or a college savings plan? Each account type may have different rules for closure.
Decide on Your Exit Strategy: You have two primary options for the assets in your account:
Transfer Your Assets "In-Kind": This means moving your investments, such as mutual funds or ETFs, to another brokerage without selling them. This is often the most tax-efficient method, especially in a taxable brokerage account, as it avoids triggering capital gains or losses. However, the receiving brokerage must offer the same funds. If they don't, you'll have to sell and re-buy, which leads to the next option.
Sell Everything and Withdraw Cash: You can sell all your holdings and withdraw the cash to your linked bank account. This is a simpler process but will trigger taxable events if you're in a taxable account. Be mindful of capital gains taxes! For retirement accounts, withdrawing cash may result in penalties and taxes if you are not of retirement age.
Check for Pending Transactions and Fees: Ensure you don't have any pending trades, dividend payments, or direct debits scheduled. Cancel any regular investment plans or withdrawals. You'll need to settle any outstanding fees or negative balances before you can close the account. Vanguard may charge a $100 processing fee for a full transfer of account assets to another firm, so be aware of that if you are transferring out.
Step 2: Choosing Your Path - Transfer or Sell?
Now that you've assessed your assets and chosen your strategy, let's look at the detailed steps for each path.
Tip: Read once for gist, twice for details.
Option A: Transferring Your Assets to Another Brokerage (In-Kind Transfer)
This is the most common and often recommended approach, especially for taxable accounts.
Initiate the Transfer from the Receiving Brokerage: Do not start the process at Vanguard. Instead, log in to the account at the brokerage you want to move your assets to (e.g., Fidelity, Charles Schwab, etc.). Look for a "transfer account" or "rollover" option.
Fill Out the Transfer Request Form: The new brokerage will have an online form or a PDF to fill out. You'll need your Vanguard account number and a recent account statement. The form will ask for your Vanguard account details and the assets you wish to transfer.
Submit the Request: Follow the instructions on the form. Many transfers can be completed electronically, but sometimes you'll need to print, sign, and mail a physical form.
Wait for the Process to Complete: The receiving brokerage will contact Vanguard to initiate the transfer. This can take anywhere from 5 to 10 business days for electronic transfers and longer if paperwork is involved. During this time, your investments will be "ring-fenced," meaning you won't be able to see or trade them in your Vanguard account, but rest assured, they are safe.
Confirm the Transfer: Once the transfer is complete, check your new brokerage account to ensure all your assets have been transferred correctly. Vanguard may keep your account in a "closing" status for a period to process any final dividends or fees.
Option B: Selling All Assets and Withdrawing Cash
This path is straightforward but requires you to be aware of the tax implications.
Sell Your Holdings:
Log in to your Vanguard account.
Go to your holdings and select the option to "sell" your investments.
Choose to sell all of your shares in each fund or ETF.
You'll be asked what to do with the proceeds. Choose to leave it as cash in your account.
Important Note: The sale of funds can take a few business days to settle, so be patient.
Initiate a Cash Withdrawal:
Once the funds from your sales have settled and are available as cash, go to the "Payments" or "Money Out" section of your account.
Initiate a withdrawal to your linked and verified bank account.
It typically takes 1 to 3 business days for the cash to reach your bank account after the withdrawal is processed.
Confirm Zero Balance: After the withdrawal is complete, ensure your account balance is zero. If there are any pending fees, dividends, or interest, you'll need to wait for those to settle and be withdrawn as well.
Step 3: Officially Requesting Account Closure
Once your account has a zero balance (either through transfer or withdrawal), you can officially request closure.
Use the Secure Messaging System: The most common way to close your account is by sending a secure message through the Vanguard website. Log in, go to the secure messages section, and select "account closure" as the category.
Call Customer Service: If you prefer to speak with someone, you can call Vanguard's client services.
For Personal Investors: 877-662-7447 (Monday-Friday, 8 a.m. to 8 p.m., Eastern time).
For specific contact details for other account types, check the "Contact Us" section on the Vanguard website.
State Your Intent Clearly: In your message or on the call, state that you wish to close your account and that the balance is zero.
Step 4: The Final Confirmation and What to Expect
After you submit your request, Vanguard will place your account in a "closing" status.
QuickTip: Save your favorite part of this post.
Processing Time: It can take 7-10 business days for the closure request to be fully processed.
Access to Documents: Even after the account is officially closed, you will likely have limited access to your account online for a period of time (e.g., up to two years) to access historical statements and tax documents.
Final Statement: You will receive a final account statement confirming the closure.
10 Related FAQ Subheadings (Starting with 'How to')
How to check my account balance on Vanguard?
You can check your account balance by logging in to your Vanguard account on their website or through the mobile app. Your portfolio value and holdings will be displayed on the main dashboard or "My Portfolio" screen.
How to find my Vanguard account number?
You can find your account number on the "Overview" screen of the Vanguard app, on a recent account statement, or by selecting 'My Profile' and then 'Product' in your online account.
How to avoid capital gains taxes when closing a Vanguard account?
The best way to avoid capital gains taxes is to perform an "in-kind" transfer of your assets to another brokerage account. This moves your holdings without selling them, so no taxable event is triggered.
Tip: Compare what you read here with other sources.
How to transfer my IRA from Vanguard to another firm?
To transfer an IRA, you need to initiate the transfer at the new brokerage firm. They will handle the paperwork and communication with Vanguard to move the assets, which is typically a direct rollover to avoid tax implications.
How to sell funds on Vanguard?
Log in to your account, go to the "Investments" section, select "Holdings," and then choose the "Sell" option next to the fund or ETF you want to sell.
How to withdraw cash from a Vanguard account?
After selling your investments and having the proceeds settle as cash, go to the "Payments" or "Money Out" section of your online account and initiate a withdrawal to your linked bank account.
How to contact Vanguard customer service by phone?
QuickTip: Skim first, then reread for depth.
For personal investors, you can call 877-662-7447 during their business hours (Monday-Friday, 8 a.m. to 8 p.m., Eastern time).
How to handle a negative balance in my Vanguard account before closing?
If you have a negative balance, you must settle it by depositing funds into the account before you can proceed with the closure.
How to close a joint Vanguard account?
For a joint account, you'll typically need the signatures or consent of all account holders on the closure form or request. Both parties may need to be present for a phone call.
How to know if my Vanguard account has been officially closed?
You will receive a confirmation message or statement from Vanguard. You can also log in to your account and check your "My Profile" or "Product" tab, which should indicate the account's status.