Thinking about closing your Vanguard account? It can seem like a daunting process, but with a clear plan, you can navigate it smoothly. Whether you're consolidating your investments, moving to a different broker, or simply cashing out, this comprehensive guide will walk you through every step. So, are you ready to get started on this journey to simplify your financial life?
Step 1: The All-Important Preparation Phase
Before you click any buttons or fill out any forms, you need to do some important groundwork. Think of this as your mission briefing before you embark on the journey to delete your Vanguard account.
Review Your Account Balances and Holdings: Log into your Vanguard account and take a good look at everything. What kind of accounts do you have? Are they brokerage accounts, IRAs, or other types? Note the funds, ETFs, stocks, and any other assets you hold. You need a clear picture of what you have before you can decide what to do with it.
Check for Pending Transactions: Have you recently bought or sold any funds? Is there a dividend payment about to be distributed? Make sure there are no pending transactions that could be disrupted by your closure request. This is a crucial step to avoid any unexpected delays or issues.
Cancel Automatic Investments and Withdrawals: If you have any automated plans set up, such as an Automatic Investment Plan (AIP) or an Automatic Withdrawal Plan (AWP), you need to cancel them. Failing to do so could lead to money being deposited into a closing account, which can complicate the process.
Understand the Implications: Closing an account can have tax implications, especially for retirement accounts like IRAs. You may be subject to taxes and penalties if you withdraw funds from a traditional IRA before age 59½. If you're transferring assets, ensure the receiving brokerage can accept them. It's always a good idea to consult a financial advisor or a tax professional to understand the potential consequences.
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| How To Delete Vanguard Account |
Step 2: Deciding What to Do with Your Assets
Now that you know what you have, you need to decide what to do with it. You have two primary options: transferring your assets or liquidating them.
Option A: Transferring Your Assets to Another Firm
This is often the best option if you want to keep your investments. It allows you to move your funds "in-kind," meaning you don't have to sell them and stay invested in the market. This can help you avoid potential capital gains taxes.
Tip: A slow skim is better than a rushed read.
Initiate the Transfer at the Receiving Brokerage: The most common way to do a transfer is to initiate it from the brokerage where you want to move your assets. They will have a transfer form, often called a "Transfer of Assets" (TOA) form, that you will need to fill out. You'll need your Vanguard account number and other details.
Choose a Full or Partial Transfer: You can choose to transfer all your assets or just a portion of them. If you're closing the entire account, you'll want to do a full transfer. Note that for some account types like Junior ISAs, you must transfer all assets.
Provide Accurate Information: Make sure the account details, including your name, account number, and Social Security number, match exactly between Vanguard and the receiving firm. Any discrepancy can cause significant delays.
Understand the Timeline: A transfer can take anywhere from a few days to several weeks, depending on the firms involved and the type of assets being transferred. Vanguard will work with your new provider to complete the process.
Be Aware of Transfer Fees: Vanguard may charge a fee to transfer your assets out. According to their fee schedule, a full transfer of assets to another firm can incur a $100 processing fee for each account closure. However, this fee may be waived for clients with a high balance or those enrolled in an advisory service. Always check the most current fee schedule on the Vanguard website.
Option B: Liquidating Your Assets
If you want to cash out your investments and close the account completely, you will need to sell your holdings.
Sell Your Funds and Stocks: You can sell your funds, ETFs, and stocks through your online Vanguard account. Go to the "Investments" section and follow the instructions to sell your holdings.
Wait for the Sale to Settle: After you sell, the proceeds won't be available immediately. The sale of funds can take a few business days to settle.
Transfer the Cash Out: Once the cash is available in your account, you can transfer it to your linked bank account. You can do this through an electronic bank transfer (ACH). Ensure you have a verified bank account linked to your Vanguard account. The cash transfer can also take a few business days to reach your bank.
Step 3: The Final Closure
Once your account balance is zero, you're ready for the final step.
Contact Vanguard Directly: The most effective way to close a Vanguard account is to contact them directly. You can do this by sending a secure message through your online account. Log in, navigate to the "Secure messages" section, and send a message stating that you wish to close your account and confirming that the balance is zero.
Confirm the Closure: After you send the message, Vanguard will review your request and place your account in "closing" status for a certain period (e.g., 3 months in some cases). This is to process any pending fees or dividends and to allow you access to your documents.
Check Your Account Status: Even after the account is closed, you may still be able to log in to access your historical documents and statements. You can check the status of your account by going to "My Profile" and then the "Product" tab in your online account.
Remember, patience is key. The process of closing an investment account can take time, so be prepared for some back-and-forth and a bit of a waiting period.
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10 Related FAQs
QuickTip: Skim first, then reread for depth.
How to close a Vanguard IRA account?
To close a Vanguard IRA, you'll need to transfer the assets to another retirement account (like an IRA or 401(k) at another firm) or take a distribution. Be mindful of potential taxes and penalties, especially if you are under 59½. You can then follow the steps for a transfer or liquidation and contact Vanguard to close the account once the balance is zero.
How to transfer funds out of a Vanguard account?
You can transfer funds out of Vanguard by initiating a transfer at the receiving brokerage, who will then contact Vanguard. You can choose to transfer "in-kind" (keeping your investments) or liquidate and transfer cash.
How to sell my Vanguard funds?
Log in to your online account, go to the "Investments" section, select the fund you want to sell, and follow the on-screen instructions. The proceeds from the sale will be available in your account after a few business days.
Tip: Scroll slowly when the content gets detailed.
How to check if my Vanguard account is closed?
You can log in to your account and check the "My Profile" section, then the "Product" tab. If the account is listed as "closed," the process is complete.
How to avoid fees when closing a Vanguard account?
If you have a full transfer of assets, you may be charged a $100 processing fee. This fee is often waived for clients with over $5 million in qualifying Vanguard assets or those in an advisory service. Transferring via an electronic bank transfer (ACH) after liquidating your assets does not incur this fee.
How to contact Vanguard customer service for account closure?
You can send a secure message through your online account after logging in. For phone assistance, the personal investor client services team can be reached at 877-662-7447 during business hours.
QuickTip: Don’t ignore the small print.
How to get my money from Vanguard after selling funds?
Once your funds are sold and the cash is available in your Vanguard account, you can initiate an electronic bank transfer (ACH) to your linked bank account. This can be done through your online portal and typically takes 1 to 3 business days to reach your bank.
How to transfer a Junior ISA from Vanguard?
As a Registered Contact, you can only transfer the Junior ISA to another provider; you cannot withdraw the funds. The child can only withdraw money from the account once they turn 18 and become the account holder.
How to transfer my Vanguard Personal Pension (SIPP)?
If you are under 55, you must transfer your SIPP to another provider. If you are over 55, you may be able to transfer or withdraw. You may need to book an appointment with a Retirement Consultant to discuss your options.
How to get a Vanguard account closure form?
Vanguard primarily handles account closures through secure messages or by initiating a transfer with another firm. While there might not be a specific "closure form" in all cases, you can find various forms, including withdrawal forms, on the "Forms & notices" section of the Vanguard website.
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