3 reasons to empty your brokerage account
Opening a brokerage account is a smart decision. If you have the cash you don’t need to save for emergencies, investing that money is a great way to grow it to a much larger amount over time.
But not all brokerage accounts are created equal. And if these things apply to yours, maybe it’s time to get rid of your brokerage account and open a new one.
One Email a Day Could Save You Thousands
By submitting your email address, you consent to our sending you money advice as well as products and services which we believe may be of interest to you. You can unsubscribe anytime. Please read our privacy statement and terms and conditions.
1. The fees are high
Previously, it was harder to find a brokerage account that didn’t charge a fee every time you made a trade. These days, many popular brokerage firms do not charge a per-transaction fee. If you pay these fees, you might want to transfer your money as soon as possible.
2. There is a minimum balance
Just as some bank accounts require you to maintain a minimum balance, so do some brokerage accounts. But many brokerages not demand that, so if you want more flexibility, it’s worth moving your money elsewhere.
3. It does not offer crypto
Cryptocurrency can be a risky investment and is not suitable for everyone. But if you want to invest money in digital coins, it is handy to have a brokerage account that allows you to buy them. This way, you can manage your stocks and your crypto on the same platform. If your brokerage account doesn’t offer crypto, you might want to find one that does.
How to change brokerage account
The process of changing brokerage accounts depends on the route you wish to take. If you are ready to cash all of your investments into your checking account, you can take that money, close your account, and put it in a new account.
The Ascent’s Picks for Top Online Stock Brokers
Things get a bit tricky when you have investments that you are not ready to cash out. For example, if you own stocks that have fallen in price, taking them out means accumulating losses.
In this case, you can transfer your shares from one brokerage account to another via an in-kind transfer. When you go this route, your stock purchase history is transferred as well. When stocks are sold at a profit or a loss, there are tax implications, so it’s important to keep track of your purchase history.
Keep in mind that some brokerage firms charge for an in-kind transfer. Your current brokerage account, not your new one, would impose these fees. But if so, you could offset these fees if your new brokerage account offers a signup bonus.
Given the number of brokerage accounts today, there’s no point sticking with one that doesn’t work for you. If the above factors apply, feel free to take your business elsewhere.