If you want to close your Vanguard account, you first need to withdraw your available cash or transfer your investments elsewhere. Vanguard requires the account balance to be $0, with no holdings or pending transactions, before you can complete the closure.
The process has several steps, including withdrawing cash, removing investments, canceling recurring transactions, and submitting the account closure request.
How to Withdraw Money From Vanguard
To withdraw money from Vanguard, log in to your account and select Transact from the main screen. Scroll to the Transfer Money section and select Withdraw.
On the withdrawal page, you will see the Vanguard brokerage account you are withdrawing from and the amount available to withdraw. This amount represents the cash currently sitting in your settlement fund.
If your money is invested in stocks, ETFs, or mutual funds, you cannot withdraw it directly. You will first need to sell those investments and wait for the proceeds to settle before transferring the cash to your bank.
Next, select your destination bank account. Choose the bank account you have linked to Vanguard, enter the amount you want to withdraw, and select Preview.
Review the withdrawal details carefully, including the Vanguard account, destination bank account, and withdrawal amount. If everything is correct, select Submit.
Standard ACH withdrawals from Vanguard to a bank account typically take one to three business days to arrive. Vanguard generally does not charge a fee for these withdrawals. If you recently linked a new bank account, Vanguard may place a temporary hold on outbound transfers as a fraud-prevention measure.
Before withdrawing money, consider the tax consequences if you need to sell investments. Selling an investment in a taxable brokerage account can create a capital gain if the investment has increased in value.
How to Prepare Your Account for Closing
Before you can close your Vanguard account, the balance must be $0 and there cannot be any pending activity.
After your final withdrawal has reached your bank account, you can begin the closure process. However, Vanguard does not allow you to close the account through the mobile app. You need to use the Vanguard website from a desktop or laptop browser.
Log in to Vanguard and select your profile icon in the upper-right corner. Then select Profile and account settings.
From there, open the Accounts and trading tab and select Close account.
Vanguard will show you the requirements for closing the account. You must have a $0 balance, and any holdings or pending transactions must be resolved before the account can be closed.
Vanguard also keeps your previous tax forms, confirmations, and transaction history available after the account is closed. This is important because you may still need tax documents, such as a 1099, for the year in which you closed the account.
If the account is not yet eligible for closure, Vanguard will show you what is preventing the closure. Common issues include remaining investments, cash in the settlement fund, or pending transactions.
How to Remove Your Investments Before Closing Your Vanguard Account
Before you close your Vanguard account, you need to decide what to do with any investments you still own.
There are two main options.
Sell Your Investments and Withdraw the Cash
The simplest option is to sell your stocks, ETFs, or mutual funds and withdraw the resulting cash to your bank account.
After selling your investments, you need to wait for the proceeds to settle. Once the cash is available, transfer it to your linked bank account.
Keep in mind that selling investments in a taxable account can create a capital gain. If you sell an investment for more than you paid for it, you may owe taxes on the profit.
Short-term capital gains generally apply to investments held for one year or less and are taxed at ordinary income tax rates. Long-term capital gains generally apply to investments held for more than one year and may receive lower tax rates.
Because of this, the timing of a sale can matter. If you are close to reaching the one-year holding period for an investment, consider discussing the potential tax consequences with a tax professional before selling.
Transfer Your Investments to Another Broker
If you are closing your Vanguard account because you are moving to another brokerage, you may be able to transfer your investments without selling them.
An ACATS transfer, or Automated Customer Account Transfer Service transfer, moves eligible investments directly from one brokerage to another. Because you are not selling the investments, the transfer generally does not create a capital gain simply because the assets moved.
You normally start the ACATS transfer with the new brokerage rather than Vanguard. The receiving brokerage contacts Vanguard and handles the transfer process.
An ACATS transfer can take about a week or two, depending on the circumstances and the firms involved.
Before starting the transfer, check whether the receiving brokerage will reimburse any transfer fee charged by Vanguard.
How Vanguard Transfer Fees Work
Vanguard charges a fee for a full account transfer out. The fee is generally $100, although Vanguard may waive it for customers with very large balances.
Some receiving brokerages offer promotions that reimburse transfer fees when you move your investments to them. Check with the new brokerage before starting an ACATS transfer to see whether you qualify for reimbursement.
If you are transferring investments rather than selling them, make sure the transfer is completely finished before attempting to close your Vanguard account.
Cancel Recurring Transactions Before Closing
Recurring transactions can prevent you from successfully closing your account.
Before you close your Vanguard account, check for any recurring investments, transfers, or other scheduled transactions. Cancel anything that is still active so that a transaction does not occur after you have emptied the account.
You can review recurring transactions by going to Transact and then selecting Recurring transactions. Delete any recurring transactions you no longer need.
You should also check for open trades, pending transfers, incoming dividends, or other activity that could leave a balance in the account.
How to Finish Closing Your Vanguard Account
Once your account has a $0 balance, all investments have been removed or transferred, and there are no pending or recurring transactions, you can complete the closure.
Go to Profile, then Profile and account settings, followed by Accounts and trading. Select Close account.
Choose the account you want to close and continue through the confirmation steps.
At this point, Vanguard should allow you to submit the closure request. Once you complete the process, you have successfully started the process to close your Vanguard account.
How Vanguard Handles the Account After Closing
Closing your Vanguard account does not necessarily mean the account disappears immediately.
Vanguard may keep the account in a wind-down period for several months in case dividends, interest payments, or other activity arrive after the closure request. Once that period is complete, the account can be fully closed.
You can still access important historical information, including previous tax forms, confirmations, and transaction history. Keep these records because you may need them for future tax filings.
Closing a Vanguard brokerage account also does not affect your credit score because brokerage accounts are not reported to credit bureaus in the same way as credit accounts.
If you decide to use Vanguard again in the future, you can open a new account.
Final Considerations Before You Close Your Vanguard Account
Before you close your Vanguard account, make sure you have completed every step:
- Withdraw all available cash or transfer your investments to another brokerage.
- Wait for investment sales and transfers to settle.
- Cancel recurring transactions.
- Check for pending transfers or trades.
- Make sure there are no remaining holdings.
- Confirm that the balance is $0.
- Consider any potential capital gains taxes before selling investments.
- Save important tax documents and transaction records.
Once everything is cleared, you can close your Vanguard account through the website. Taking the time to check these details can help you avoid unexpected tax consequences, transfer fees, or delays during the account closure process.
