Let say I request an ACATS full account transfer form firm A to B. Assuming account is transferred from A to B successfully, my question is what happens if I by mistake make an ACH transfer of cash to account A (considering Account A is not deactivated or closed immediately in the process of ACATS that could take at least a few days to a week if done online)? Will it be swept back to Account B?
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Meow for ACATS
My guess is that the transfer will either be rejected, or re-fund account “A”.
The transfer to Account “B” is a distinct transaction that happens at a specific time, they wont continue transferring stuff on an ongoing basis after the transfer has occured.
Note, with a “full account transfer” some firms will charge a fee. But if you only do a partial transfer - even if you list every asset in the account, leaving it with a $0 value anyways - there is no fee. So be sure to check the fee schedule prior to requesting the transfer, to see if you can save a few dollars.
The feedback I had from another source states: It is not unusual to have some residual income trickling in after the transfer (interest, dividends, etc.). The ACATS will continue to look for residual amounts to sweep over for a period of time.
Perhaps that’s why there’s often (at least as of the last time I worried about this, which admittedly was years ago) a fee for a full account transfer but no fee for transferring individual assets.
Unfortunately, this particular broker A charges huge fees for inactive and low-balance accounts. That’s why I decided to close the account for good. On top of that, broker B promised to reimburse the account closing fee at Broker A.
AFAIK the custodian for the old account is responsible for moving any late arriving dividends or interest payments to the new account. I’ve received a transfer 13 months after an ACAT. I couldn’t actually figure out what it was (the amount didn’t match up to any dividends, so I suspect it was interest income for part of the month that they didn’t transfer to the new account for a year).
Regarding my original question, the EFT transfer was returned because the receiving account was closed (according to a notification from the sending bank) and the amount was credited back to the sending bank. I had initiated the full ACAT and EFT on the same day. Apparatenly, the full ACAT closed the account before the EFT.
I think you mean EFT (Electronic Funds Transfer), not ETF (Exchange Traded Fund).
Sorry, EFT (ACH transfer). I am surprised how fast brokers communicate ACAT information with their counterparties nowadays when you initiate account transfers online!