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Learning, Sharing, and Teaching => Investor Alley => Topic started by: MasterCard on July 03, 2015, 12:18:09 PM

Title: TIRA Transfer (selling CDs Before Maturity)
Post by: MasterCard on July 03, 2015, 12:18:09 PM
Hi all !

Helping my mother transfer her Traditional IRA account with CapitalOne Financial Advisors (aka CapitalOne Investment Services) to a Vanguard Traditional IRA. She has a financial advisor who is taking a nice fee and high fee funds as well. Vanguard application says we need to first "Move your transferring assets to a money market or cash account" at the old custodian, so that funds are in liquid position. This makes sense since we want to buy different Vanguard funds (VTSMX and VBMFX).

Funds at old custodian:
Total: $12,696.78

The complication is she has a JPMorgan CD that mature in 2019. I don't understand all of the implications of selling it prematurely - please help with this. I know there will be a penalty but how much? Will she get any forms from Capital One to report to IRA while filing taxes? Anything else?

Thanks !
Title: Re: TIRA Transfer (selling CDs Before Maturity)
Post by: seattlecyclone on July 04, 2015, 12:41:58 AM
The penalty on the CD really depends. She could lose a few months' worth of interest, or more. She should get a form from Capital One, but this transfer should not result in any extra tax this year.
Title: Re: TIRA Transfer (selling CDs Before Maturity)
Post by: stepitup on July 04, 2015, 02:16:18 PM
The other thing to consider is that she wouldn't be required to transfer the full amount. She could always sell all the non-CD assets, transfer those, and let the account continue on with just the CD in it until it matures.
Title: Re: TIRA Transfer (selling CDs Before Maturity)
Post by: MasterCard on July 05, 2015, 01:59:30 PM
thanks for the replies! Right now I'm thinking to sell everything and deal with the penalty for CD. At least there will be no more financial advisor fees.
Title: Re: TIRA Transfer (selling CDs Before Maturity)
Post by: Another Reader on July 05, 2015, 03:10:03 PM
It sounds like this is a brokered CD.  I would talk to the Vanguard folks to see if it can be transferred to their brokerage account and held until it matures. 

In general, you should be able to move most mutual funds without selling them, although it may be simpler to sell the Franklin Funds, so as not to be charged a fee by Vanguard to sell them.  It would be a good idea to compare the cost of selling them before moving them to moving and then selling.  A phone call to Vanguard should confirm they can be transferred in kind and then sold.