How To Close American Funds Account: Closing & Transfer Fees

How to close an American Funds account. American Funds account closure and transfer fees.

How to Close an American Funds Account: Highlights

• You can close an American Funds account either by transferring it or by regular closure.

• Sometimes, there might be a fee to close an American Funds account.

• The IRS might charge taxes and fees in some cases, so it’s wise to talk to a tax professional before closing an American Funds account.

You can only open an account with American Funds through a local financial planner. After opening, you can close your account using either of the methods described below.

First Method: Close American Funds Account With ACAT

You can close your American Funds account by transferring it to another investment firm. The ACAT system, which is user-friendly, is often used to transfer securities accounts between firms. After your assets are transferred to the new firm, your American Funds account will be closed.

To start the transfer via ACAT, first open a new account at the investment firm where you want to move your funds. This new account will receive the mutual funds from your American Funds account. Just ask for an ACAT transfer from American Funds to the new firm. You should make this request to the new firm, not to American Funds or your old investment advisor.

Make sure the new firm accepts mutual funds from American Funds. Not all firms do. Also, request a full transfer, not a partial one, to ensure the old account is fully closed.

Remember, transferring your mutual funds means they aren't sold; they just move to the new firm. If you want to convert your investments to cash, you should consider the second method described below.

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Second Method: Close American Funds Account by Liquidation

Another option is to sell the mutual funds in your account, take out the cash, and then close the account. Depending on how your account is set up, you might need help from your financial advisor to do this. If you can sell the mutual funds yourself online, you can usually withdraw the cash the next business day. After that, contact the financial advisor or the local investment firm that helped you open the American Funds account and ask them to close it.

American Funds Account Closing Fee

The local securities firm that opened your American Funds account may have its own fees for account actions. Check their fee schedule carefully because there might be a fee for terminating your account.

Finally, the Tax Man Cometh

The Internal Revenue Service (IRS) charges taxes and fees on certain investment activities, which depend on the type of account (taxable or non-taxable), the age of the account holder, and the age of the account. Make sure you understand these potential costs before you close any financial account.

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