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Beware Broker Transfer Out Fees
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My wife’s Roth IRA currently sits at a TD Ameritrade account, where it’s been sitting for the last three or four years. With the majority of it in cash, mostly because we lost track of the account, we want to invest it in our retirement investment of choice, an index fund. Our index fund of choice happens to be the Vanguard 500 Index Fund because most of our retirement funds are with Vanguard. Vanguard does not have the cheapest index fund, I believe that title now resides with Fidelity’s Spartan 500 index. Paying the extra 0.08% seems reasonable considering we can manage it all in one place.
The only downside about this entire process is that TD Ameritrade has a $75 outbound full account transfer fee. 
Fortunately Vanguard does not charge you to transfer in an IRA (to my knowledge, no one does).
In comparing some of the common fees, $75 seems to be on the high side. $50 seems fairly standard with some brokers going as low as $30.
Broker Transfer Fees
Here’s a list of broker transfer fees, I use the brokers included on Smart Money’s 2009 Best Brokers list:
- E*Trade: $60
- Fidelity: $50
- Charles Schwab: $50
- TradeKing: $50
- TD Ameritrade: $75
- Muriel Siebert: $50 (retirement accounts only)
- Scottrade: $0
- Firstrade: $50
- OptionsXpress: $50
- Banc of America: $75
- Just2Trade: $75
- WellsTrade: $75
- Sharebuilder: $50
- WallStreet*E: $150
- Zecco Trading: $60
- SogoTrade: $75
Here’s a vocabulary lesson, useful if you plan on transferring out your account. ACAT stands for Automated Customer Account Transfer and refers to an electronic request to transfer an entire brokerage account between FINRA and NYSE firms. It’s probably the easiest way to transfer your account from one broker to another and takes 7-12 business days.
The next time you are comparing brokers, one point of comparison you might want to consider is the transfer fees.
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And since you would be transferring an IRA account out via ACATs, don’t forget to see if they are going to also charge you an account termination fee on top of the ACAT charge.
You say, “Fortunately Vanguard does not charge you to transfer in an IRA.” In all fairness, NOBODY charges you to transfer funds IN, but most of them “punish” you with the fee to transfer funds OUT (in a mostly futile effort to keep you in *their* house!)
That said, there *may* be account set-up fees and annual fees that did not apply to your previous brokerage relationship. Caveat emptor!
Yes that’s true, I didn’t meant to imply that Vanguard was special in that they didn’t charge a fee to transfer in, I was merely stating that because we were moving it to Vanguard and they didn’t.
The rss feed article showed Scottrade with a $60 transfer, but it looks like you may have updated it to $0.
Scottrade doesn’t charge to transfer out.
Yep, I initially misread their schedule and just made the change. They listed in their free section, rather than in the regular fee schedule so I got tripped up and misinterpreted one of their listings.
How odd that you have to pay to transfer out of an IRA, whereas traditional brokerage accounts you generally don’t have to pay to close the account.
I did a similar transfer from ameritrade to vanguard earlier this year. Don’t waste your money on that transfer fee. You can do a 60-day rollover where you withdraw the money from one IRA and deposit it into a new one within 60 days with no penalty. Call the vanguard people, they are very helpful and will walk you through the whole thing.
Don’t transfer the whole account.
Leave $20 behind.
Then you can eventually forfeit that $20 to Ameritrade.
If you want to be really mean to them, leave only $1 behind
Mark
Yeah I remember reading about this transfer fee before. Luckily in my case my account was a regular TD one so I just withdrew the money in cash without having to worry.
Jim, Folks should know that the transfer you mentioned is a “custodial to custodial” transfer. It should always be used for “transfer outs” unless you specifically plan to take control of the money for some reason. If you choose to take control, taxes are deducted immediately so if you were planning on redepositing the funds within the 60 day window you would have to make up the deducted tax amount out of pocket to redeposit the same amount as was withdrawn. This can be substancial! You can apply for and receive a refund of the deducted taxes at year-end provided you stayed with-in the 60 day limit but at that point it is to late to include those funds in the redeposit. Depending on your age you may also be hit with a withdrawl penalty.
Well, if someone is interested in transferring between the IRA’s like the original poster, you can tell Ameritrade not to withhold any of the money for tax purposes (because you are doing a 60-day rollover). And as long as you re-deposit the money into a new IRA within 60 days you don’t have to worry about paying any taxes or early withdrawal fees at all. That was confirmed to me by multiple Vanguard representatives before I made the transfer and it went off without a hitch. If people have questions they can call the brokerage and people will walk them through it.
My Wife got hit with a $60 fee from Wachovia Securities for a Non-Qualified Account that wasn’t really active.
Since I am Series 6 Registered I just moved it over my broker-dealer and got NAILED with a $75 account transfer fee!
So angry
Thanks for the heads up– they getyou coming and going!