Thanks for this information.If you are selling from a Vanguard mutual fund, you can choose to receive the funds directly to your bank account. Vanguard directly controls the mutual fund and can be certain they can get the money.I am confused and would appreciate if someone would explain in detail the purpose of Settlement funds for Vanguard Brokerage accounts.
When are the settlement funds used?
If I want to sell shares of a fund and transfer the money to a checking account, do I first need to transfer the money from the fund to the Settlement fund and then transfer the money from Settlement to my checking account?
If I want to transfer a Vanguard IRA to another company, Vanguard needs to issue a check to send to the other company. Do I need to first transfer my IRA funds to the Settlement fund before Vanguard can issue the check?
Thank you!!
For ETFs, the money has to land in the settlement fund first. ETFs are purchased on the open market from another seller, most likely not Vanguard. It takes two days for this trade to settle. There's a small chance the trade will fail to be fulfilled. There's no reason why they couldn't then schedule the money to move to a bank account, but I think it's simply "how it's always been done."
I hold only mutual funds, no ETFs. I didn't realize it was different for ETFs, but that sort of makes sense now that it is mentioned.
Statistics: Posted by retiredjg — Tue Feb 27, 2024 4:33 pm — Replies 10 — Views 752