How to move ira to another bank

When evaluating your retirement accounts, look at more than your investment—look at where they're invested. If you have numerous accounts at various financial institutions or brokerage firms, it can make managing your savings more difficult. By consolidating your Individual Retirement Accounts (IRAs) into one account, you can reduce any investment fees and maximize your returns.

Transfers and rollovers are the two best methods for consolidating your existing IRA accounts. 

Transfers

An IRA transfer refers to the movement of funds between the same types of accounts with no IRA distribution to you. For example, you could move IRA funds from one Traditional IRA to another Traditional IRA.

Direct Transfer

Generally, a Direct Transfer is the easiest way to move assets from one IRA to a new IRA. The transaction is neither taxable nor reportable to the IRS and is completed by the distributing and receiving financial organizations.

To initiate, ask the receiving financial institution to generate and forward the required forms to the financial institution currently holding your IRA. Upon receipt of your completed forms, the existing institution will send the requested funds to the receiving institution’s IRA account number.

IRA Rollover

An IRA rollover is the movement of funds between any type of retirement account into an IRA and can be done either directly or indirectly. Regardless of the number of IRAs you own, you are only permitted to roll over one distribution from an IRA (Traditional IRA, Roth IRA or SIMPLE) in any 12-month period. A second IRA-to-IRA rollover in a single year could result in a tax consequence of income tax becoming due on the rollover, a 10% early withdrawal penalty and a 6% per year excess contributions tax as long as that rollover remains in the IRA.

Direct Rollover Option

Consider a Direct Rollover if you leave a job in which you participated in an Employer Pension or Profit-Sharing Program, like a 401(k) or Thrift Savings Plan (TSP), and want to move your funds into a Navy Federal IRA.

Speak to your company's Plan Administrator to complete the necessary forms. Once completed, the administrator will distribute the assets to your IRA. This transaction is reportable as a distribution and will be reported as a rollover.

By rolling over your retirement savings from an employer-sponsored retirement plan directly to an IRA, you'll avoid mandatory 20% income tax withholding and any IRS early distribution penalty, although investment surrender fees may still apply. Rollovers to IRAs also allow you to retain the tax-sheltered status of your retirement savings while maintaining complete control over your investment selection and account access.

Indirect Rollover Option

An Indirect Rollover is a tax-free distribution of all or part of your IRA assets. Since you take possession of the IRA assets, the movement is reportable to the IRS through your Social Security number.

You may move your funds from one retirement plan to another or from one financial institution to another. You may make only one rollover of the same assets to another financial institution during a 12-month period. You have 60 days from the date you receive the distribution to make the rollover yourself or you will have to pay income tax on the amount, plus a penalty.

Transfer or roll over your funds from a qualifying plan to one of our IRA options. We're here to help you decide which is best for you and your personal finance needs.

Sometimes the business of managing your various accounts can grow tedious, not to mention time-consuming. Keeping track of multiple statements, online and off, from numerous institutions can feel burdensome. Moreover, you might sour on the investment choices of your original IRA trustee and want to switch to a new institution. Transferring an IRA from one bank to another may be done via a direct, or trustee-to-trustee, transfer. Alternatively, your bank can write you a check, and you can convey the check to the new institution yourself.

Direct or Trustee-to-Trustee

PIck up or download the paperwork for opening an IRA from the new bank. The application requires your basic identifying and contact information, including your birth date and Social Security number. The form might also request your investment choices and initial contribution amount. You will need to designate one or more beneficiaries to receive the account assets after your death. Sign the forms and turn them in to the new bank.

Instruct the original trustee to make a direct transfer of your IRA assets to the account at the new bank. To transfer your assets as is, without their being liquidated, request an in-kind transfer. Otherwise, the original trustee will have to liquidate the funds before making the transfer. Fill out any forms required for the liquidation and close the account.

Check in with the new bank after five business days to confirm the transfer. If it has not been completed, contact the original trustee to find the source of the problem.

By Check

Get the IRA opening forms from the new bank. Provide your name, address, phone number, as well as your birth date and Social Security number. Designate one or more beneficiaries, sign the paperwork and convey it to the new bank.

Tell the original trustee that you want to transfer the IRA. Complete IRA closing forms the trustee provides and pay the closing fee, if required.

Ask the trustee to write you a check for the liquidated funds.

Deliver the check to the new bank by hand, by courier or by mail within 60 days of receiving it. Certified mail, with a return receipt, is the most secure postal route.

References

• IRS: Publication 590, Individual Account Arrangements
• Wells Fargo: How to Transfer an IRA From Another Institution

Warnings

• If you do not transfer the check to the new bank by the 60-day deadline, the IRS considers the withdrawal of funds a distribution. You will be liable for any taxes and penalties that apply.

Writer Bio

D. Laverne O'Neal, an Ivy League graduate, published her first article in 1997. A former theater, dance and music critic for such publications as the "Oakland Tribune" and Gannett Newspapers, she started her Web-writing career during the dot-com heyday. O'Neal also translates and edits French and Spanish. Her strongest interests are the performing arts, design, food, health, personal finance and personal growth.

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