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

• It’s possible to close an American Funds account through transfer or regular closure.

• A fee could be charged in some cases to close an account with American Funds.

• Taxes and fees could be assessed by the IRS in some cases, so it’s important to consult with a licensed tax pro before closing an American Funds account.

An account with American Funds can only be opened through a local financial planner. Once this step is accomplished, the account can be shut down using either method discussed below.

First Method: Close American Funds Account With ACAT

It’s possible to close an American Funds account by transferring it to a second investment firm. The ACAT electronic system is used quite frequently to transfer securities accounts among firms, and it is very user-friendly. Once the assets in the American Funds account arrive at the second firm, the account at American Funds will be closed.

The first step to perform an account transfer through the ACAT network is to open a new account at the desired investment firm. This new account will receive the mutual funds in the American Funds account. Once that new account is open, you simply need to request an ACAT transfer from American Funds to the new firm. The request should be sent to the incoming firm. There is no need to contact American Funds or the investment advisor connected to the old account.

You will want to verify with the new brokerage firm that mutual funds from American Funds will be accepted. Not all firms offer trading in these products. You also want to be sure to request a full transfer (and not a partial one). Only a full transfer will close the outgoing account.

Obviously, when the mutual funds arrive at the second firm, nothing has been sold, and the investment account lives on. If your goal is to get cash out of the account, you’ll need to use the second method instead.

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Second Method: Close American Funds Account by Liquidation

The next option is to sell the mutual funds in the account, withdraw the cash balance, and then close the account. Depending on the exact setup of the account, these tasks may need to be completed with the help of the connected financial advisor. If you can log in and sell the mutual funds yourself, you should be able to withdraw the resulting cash position the next business day. At that point, you’ll need to reach out to the financial advisor or local investment firm through which you opened the American Funds account and request a closure.

American Funds Account Closing Fee

The local securities firm through which the American Funds account was opened will have its own fee schedule for account activities. A termination fee could appear on the list, so look over it carefully.

Finally, the Tax Man Cometh

The Internal Revenue Service assesses fees and taxes on some investment events, which will vary by account structure (taxable or non-taxable), age of account owner, and age of account. Be sure to fully understand these potential consequences before closing any financial account.

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