How to Close an Account on ETRADE

If you’ve decided it’s time to close your brokerage account, it’s important to do it the right way. Whether you’re consolidating accounts, transferring investments to another broker, or simply cashing out, understanding the process can help you avoid unnecessary fees, delays, and unexpected tax consequences.

This guide explains exactly how to close an account on ETRADE, the different options for handling your investments, and the steps you should complete before finalizing the closure.

How to Close an Account on ETRADE

To begin the process, open the ETRADE mobile app and sign in to your account. From the main account screen:

1. Tap the Menu icon in the bottom-right corner.
2. Select My Profile.
3. Scroll down past the account settings.
4. Tap Close Account.

You’ll be taken to the account closure page, where ETRADE will ask which account you want to close. If you only have one brokerage account, simply select it. If you have multiple accounts, make sure you choose the correct one by tapping the radio button next to it before selecting Continue.

At this point, ETRADE will ask how you want to handle the assets currently held in your account.

Choose What to Do With Your Investments

Before you can successfully close an account on ETRADE, all assets and cash must be removed from the account. ETRADE provides three different methods.

Internal Asset Transfer

If you’re simply consolidating accounts within ETRADE, an internal transfer is often the easiest choice.

With this option, your investments move to another ETRADE account you already own, such as:

• Another individual brokerage account
• A joint brokerage account
• An IRA

Benefits include:

• No selling of investments
• No capital gains taxes triggered
• No transfer fee
• Usually completed within three business days

This is the ideal option if you’re staying with ETRADE but want to eliminate an extra account.

External Account Transfer (ACATS)

If you’re moving to another brokerage firm, an external transfer is generally the best solution.

This process uses the Automated Customer Account Transfer Service (ACATS), allowing your investments to move directly to your new broker without being sold.

Advantages include:

• Investments remain intact
• No taxable sale occurs
• Your original purchase dates transfer with your holdings
• Long-term capital gains status is preserved

Keep in mind:

• ETRADE charges a $75 fee for a full external transfer.
• Transfers typically take 5 to 10 business days.

Many brokerage firms reimburse this transfer fee for new customers, so it’s worth asking before you begin the process.

Another important detail is that ACATS transfers are always initiated by your new brokerage firm—not by ETRADE. Once the receiving broker starts the transfer, ETRADE releases your holdings to complete the move.

Selling Your Investments Before Closing

The third option is to sell all investments, withdraw the cash to your bank account, and then close the account.

This approach:

• Has no transfer fee
• Usually takes up to three business days after trades settle
• Leaves your account empty and ready for closure

However, selling investments may create a taxable event.

If your investments have increased in value, you’ll owe capital gains taxes on the profits.

Generally:

• Investments held for less than one year may be taxed as short-term capital gains at your ordinary income tax rate.
• Investments held for one year or longer may qualify for the lower long-term capital gains tax rate.

For example, if you’re only a few weeks away from reaching the one-year holding period, waiting before selling could significantly reduce your tax bill.

If you’re unsure about the tax implications, consider speaking with a qualified tax professional before selling appreciated investments.

Complete These Steps Before You Close an Account on ETRADE

Before ETRADE allows you to finalize the closure, make sure you’ve completed several important tasks.

Cancel Recurring Transfers

Navigate to:

• Menu
• Pay & Transfer

Delete any scheduled transfers or automatic deposits. Otherwise, new money could enter the account while it’s being closed, delaying the process.

Verify There Are No Pending Transactions

Your account should have:

• No open stock trades
• No pending transfers
• No incoming dividends
• No unsettled transactions

If anything is still processing, ETRADE will prevent you from closing the account until everything has cleared.

Special Note for IRA Rollovers

If you’re moving an IRA to another financial institution, the rollover must be initiated by the receiving brokerage—not by ETRADE.

Starting the process from the new firm helps ensure the rollover is completed correctly.

Final Steps to Close the Account

Once your account has:

• A zero cash balance
• No investments remaining
• No pending transactions
• No recurring transfers

You can finish the process.

Return to:

1. Menu
2. My Profile
3. Close Account

Select the empty account, tap Continue, review the confirmation details, and approve the final request.

After completing these steps, you’ve successfully taken the necessary actions to close an account on ETRADE.

What Happens After Closing Your Account?

Your account isn’t immediately erased from ETRADE’s system.

Instead, it enters a temporary wind-down period that allows any delayed dividends, interest payments, or corporate actions to be properly processed.

Once that period ends, the account is officially closed.

The good news is that you can still log in during this time to access important documents and account records.

Tax Forms After Account Closure

Even after you close an account on ETRADE, you’ll still need access to your tax documents.

For the tax year in which the account was closed, ETRADE continues to provide access to:

• Form 1099
• Trade confirmations
• Transaction history
• Other account statements

These records are essential when preparing your taxes, so it’s a good idea to download and save copies for your files.

Does Closing an ETRADE Account Affect Your Credit Score?

No. Closing a brokerage account does not impact your credit score.

Brokerage firms do not report account activity to the major credit bureaus, so opening or closing an investment account has no effect on your credit history.

If you ever decide to invest with ETRADE again in the future, you can simply open a new brokerage account.

Conclusion

Knowing how to close an account on ETRADE properly can save you from unnecessary taxes, transfer delays, and avoidable fees. Before submitting your closure request, decide whether an internal transfer, an ACATS transfer, or selling your investments is the best choice for your financial situation.

By ensuring your account has no remaining assets, pending transactions, or recurring transfers, you’ll be able to complete the process smoothly. Taking a few extra minutes to review your options now can help you avoid costly mistakes and make your account closure as straightforward as possible.