Schwab Information Thread with FAQ, Links, Tips and Q&A

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Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

Post by galawdawg »

Tubes wrote: Sat Aug 07, 2021 8:08 am
csm wrote: Sat Aug 07, 2021 8:05 am
Tubes wrote: Sat Aug 07, 2021 8:02 am This is a great thread.

If I transfer, is it all-or-nothing, or can I transfer just my ETFs, for example? In other words, split off my VG account partially to Schwab, keeping my long held mutuals at VG, and going with the ETFs to Schwab.
You can do partial transfers. This will be an option in the transfer steps.
Thanks! There is a Schwab brick and mortar office nearby. Any advantage to going there instead of doing it all on-line?
On the partial transfer, csm is correct.

I would suggest you select and contact a financial consultant at your local office (see the FAQ above) if either of these apply:
  • If you will be transferring at least $250k to Schwab, in which event you qualify for a dedicated financial consultant (similar to Flagship representative) who can be your single point of contact with Schwab if you wish and/or
  • If you want to request that Schwab match a competitor's transfer bonus offer.
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Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

Post by Tubes »

galawdawg wrote: Sat Aug 07, 2021 8:40 am
On the partial transfer, csm is correct.

I would suggest you select and contact a financial consultant at your local office (see the FAQ above) if either of these apply:
  • If you will be transferring at least $250k to Schwab, in which event you qualify for a dedicated financial consultant (similar to Flagship representative) who can be your single point of contact with Schwab if you wish and/or
  • If you want to request that Schwab match a competitor's transfer bonus offer.
Ah, thanks galawdawg. I can ride my bike there. Your points apply. I know E*Trade has the big match offer, but for $1M Ally Invest has a $2000 offer, which I have proof of (until 9/30 in their latest communication). I'm starting to convince myself this will be worthwhile.
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Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

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csm wrote: Sat Aug 07, 2021 8:00 am But the rep didn't actually tell me where or how I see this in the account - does anyone know where I would view the fact that there is no named beneficiary? And isn't there a way to add one online, which I know I did for Fidelity and other financial accounts?
Try https://client.schwab.com/App/Service/Beneficiaries.
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Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

Post by galawdawg »

Tubes wrote: Sat Aug 07, 2021 8:48 am
galawdawg wrote: Sat Aug 07, 2021 8:40 am
On the partial transfer, csm is correct.

I would suggest you select and contact a financial consultant at your local office (see the FAQ above) if either of these apply:
  • If you will be transferring at least $250k to Schwab, in which event you qualify for a dedicated financial consultant (similar to Flagship representative) who can be your single point of contact with Schwab if you wish and/or
  • If you want to request that Schwab match a competitor's transfer bonus offer.
Ah, thanks galawdawg. I can ride my bike there. Your points apply. I know E*Trade has the big match offer, but for $1M Ally Invest has a $2000 offer, which I have proof of (until 9/30 in their latest communication). I'm starting to convince myself this will be worthwhile.
If you have multiple accounts (brokerage, TIRA, Roth IRA), take a look at this post about how Schwab will likely calculate and structure a bonus match: viewtopic.php?p=6161081#p6161081

I'd print and/or save both Ally's current offer and E*TRADE's offer (which is $2,500 on $1m) to see which one works out best for you. https://us.etrade.com/what-we-offer/how-it-works/promo

I had been at Vanguard for nearly thirty years so was very reluctant to leave. But now I'm very glad I did...the difference has been night and day. Like going from Motel 6 to the Ritz Carlton. :happy
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Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

Post by an_asker »

csm wrote: Sat Aug 07, 2021 8:00 am Thank you, galawdawg, for starting this thread.

[...]
A couple questions:

1. When I opened it, I only opened the Schwab One account but would now like to add a checking account / debit card to use specifically for withdrawing cash at an ATM abroad since we'll be visiting family next month. The online instructions were a bit fuzzy, so I went into a chat, and the representative said that the application would likely trigger a second Schwab One brokerage to be opened that I would then have to call and ask them to close. This sounded a bit off-putting. Has anyone added a checking to an existing Schwab One brokerage account after the fact, and was there an efficient way to do this?
[...]
You are likely to be better off following instructions (refer my issue up thread)
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Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

Post by Tubes »

galawdawg wrote: Sat Aug 07, 2021 9:06 am
Tubes wrote: Sat Aug 07, 2021 8:48 am
galawdawg wrote: Sat Aug 07, 2021 8:40 am
On the partial transfer, csm is correct.

I would suggest you select and contact a financial consultant at your local office (see the FAQ above) if either of these apply:
  • If you will be transferring at least $250k to Schwab, in which event you qualify for a dedicated financial consultant (similar to Flagship representative) who can be your single point of contact with Schwab if you wish and/or
  • If you want to request that Schwab match a competitor's transfer bonus offer.
Ah, thanks galawdawg. I can ride my bike there. Your points apply. I know E*Trade has the big match offer, but for $1M Ally Invest has a $2000 offer, which I have proof of (until 9/30 in their latest communication). I'm starting to convince myself this will be worthwhile.
If you have multiple accounts (brokerage, TIRA, Roth IRA), take a look at this post about how Schwab will likely calculate and structure a bonus match: viewtopic.php?p=6161081#p6161081

I'd print and/or save both Ally's current offer and E*TRADE's offer (which is $2,500 on $1m) to see which one works out best for you. https://us.etrade.com/what-we-offer/how-it-works/promo

I had been at Vanguard for nearly thirty years so was very reluctant to leave. But now I'm very glad I did...the difference has been night and day. Like going from Motel 6 to the Ritz Carlton. :happy
I do have multiple accounts. Your first referenced link is very helpful. Thank you!
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Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

Post by Tubes »

Question: is it easy to convert a tIRA (full or partial) to a Roth IRA at Schwab? Can this be done online.

This is actually one thing that works pretty well at VG.
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Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

Post by galawdawg »

csm wrote: Sat Aug 07, 2021 8:00 am
A couple questions:

1. When I opened it, I only opened the Schwab One account but would now like to add a checking account / debit card to use specifically for withdrawing cash at an ATM abroad since we'll be visiting family next month. The online instructions were a bit fuzzy, so I went into a chat, and the representative said that the application would likely trigger a second Schwab One brokerage to be opened that I would then have to call and ask them to close. This sounded a bit off-putting. Has anyone added a checking to an existing Schwab One brokerage account after the fact, and was there an efficient way to do this?

2. When I opened the Schwab brokerage for the house sale, I did so as an individual account and didn't worry about beneficiary designation because, at the time, I assumed I would not retain the account (since I already had VG and Fidelity accounts). I would like to add my beneficiary now, but cannot found where/how to do so. I actually cannot even find where to view my profile so that I can actually see that there is no beneficiary set up. I emailed Schwab and they replied that (1) there is currently no beneficiary on the accounts, and (2) provided a form to add one. But the rep didn't actually tell me where or how I see this in the account - does anyone know where I would view the fact that there is no named beneficiary? And isn't there a way to add one online, which I know I did for Fidelity and other financial accounts?

3. Rather than set up beneficiary, I wondered if I should just set up a joint account with Schwab, which was also an option mentioned by the rep who responded to my beneficiary query. So I'm wondering if this is a better option and how it would work. I would establish a joint account online (for a Schwab One brokerage with checking). Then after the VG funds are transferred to my existing Schwab individual brokerage account, could I initiate a transfer of all these funds to the joint account? Are there pros/cons to doing a joint account vs. individual with spouse as beneficiary. We have no children / heirs, so everything we own is either in both our names or with a TOD beneficiary designation in the case of financial accounts. If it makes any difference, I'm older than my husband and I manage the finances, so I would like whatever is going to make his financial life easier should I pass before him.

Thank you.
1. I did the same thing. Opened the Brokerage account first, then went to open the Checking account and it opened a linked brokerage account. I'll add that to my post above as a tip...if you are going to open a brokerage account and a checking account, start with the checking account!

In my situation, I had not funded the accounts or started the transfer, so my consultant suggested using the brokerage account opened when I opened the checking account and they deleted the unfunded brokerage account I first created. I believe that the information you received when you chatted is correct and they can close the unfunded brokerage account. If you have a dedicated consultant, they can confirm that and handle closing the unfunded account and linking the first brokerage account with your new checking account. A bit awkward but all it takes to set it up the way you want is a call.

2. Yes, for taxable brokerage accounts, you would use the form for beneficiary designation (as noted in my FAQ above). You can see your beneficiary designations and set them for your tax-advantaged accounts here: https://client.schwab.com/app/service/beneficiaries

3. Yes, I would recommend that you set up joint accounts with your husband. Your consultant can confirm what would be involved in the transfer of any individually registered shares in your brokerage account to a joint account. There may be a need to change the registration of those shares (I am unsure) but your consultant can review that with you.

I would recommend that since you are considering joint accounts, that you hold off on opening a checking account AND on the brokerage beneficiary designation until you speak with your consultant. If you decide to open a joint checking and brokerage account, you can start by opening the joint checking, which will then progress to opening the linked joint brokerage. Then, once all of the shares transfer from your individual brokerage to your joint brokerage, close the individual brokerage. No beneficiary designation would then be necessary, except on any tax-advantaged accounts which you can set online.

Hope that helps!
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Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

Post by galawdawg »

Tubes wrote: Sat Aug 07, 2021 9:54 am Question: is it easy to convert a tIRA (full or partial) to a Roth IRA at Schwab? Can this be done online.
Yes, you can do a Roth IRA conversion online at Schwab: https://client.schwab.com/Accounts/Roth ... rsion.aspx?

Very simple and straightforward.
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Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

Post by jeffyscott »

runninginvestor wrote: Sat Aug 07, 2021 8:09 am
csm wrote: Sat Aug 07, 2021 8:00 am Thank you, galawdawg, for starting this thread.

I.. .

3. Rather than set up beneficiary, I wondered if I should just set up a joint account with Schwab, which was also an option mentioned by the rep who responded to my beneficiary query. So I'm wondering if this is a better option and how it would work. I would establish a joint account online (for a Schwab One brokerage with checking). Then after the VG funds are transferred to my existing Schwab individual brokerage account, could I initiate a transfer of all these funds to the joint account? Are there pros/cons to doing a joint account vs. individual with spouse as beneficiary. We have no children / heirs, so everything we own is either in both our names or with a TOD beneficiary designation in the case of financial accounts. If it makes any difference, I'm older than my husband and I manage the finances, so I would like whatever is going to make his financial life easier should I pass before him.

Thank you.
If you are in a community property state, having the joint account titled as such can have tax benefits for the surviving spouse. Current law provides a full step up basis on death. We live in WI so we are able to title as Community Property With Rights of Survivorship which also allows us to avoid probate.
Schwab lists the options here: https://www.schwab.com/brokerage/types- ... eck--35601
I would do some searching and reading about the possible impact of the different choices.

At least in community property states, at a minimum, all assets acquired during the marriage are considered "community property" and I don't think titling of an account can change that?
https://www.findlaw.com/family/marriage ... at-in.html
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Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

Post by jeffyscott »

galawdawg wrote: Sat Aug 07, 2021 10:04 am
Tubes wrote: Sat Aug 07, 2021 9:54 am Question: is it easy to convert a tIRA (full or partial) to a Roth IRA at Schwab? Can this be done online.
Yes, you can do a Roth IRA conversion online at Schwab: https://client.schwab.com/Accounts/Roth ... rsion.aspx?

Very simple and straightforward.
The most confusing part has been getting to that page. There is no menu item for "Roth Conversion" under "Accounts", where the url implies it would be. Neither have I found a menu item for Roth conversions anywhere else.

There is an item for "transfer" and you can, I think, now use that to start a roth conversion as long as the Roth account already exists. For a while the only way I could find the roth conversion page was a search of the site and if I, instead, I went to the "transfer" page that would only allow conversion of a full position. At an earlier time, I think going to the transfer page and starting a transfer from TIRA to Roth would say something like "that can't be done from here" and give a link to the page that you have provided a link to.
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Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

Post by galawdawg »

jeffyscott wrote: Sat Aug 07, 2021 10:32 am
galawdawg wrote: Sat Aug 07, 2021 10:04 am
Tubes wrote: Sat Aug 07, 2021 9:54 am Question: is it easy to convert a tIRA (full or partial) to a Roth IRA at Schwab? Can this be done online.
Yes, you can do a Roth IRA conversion online at Schwab: https://client.schwab.com/Accounts/Roth ... rsion.aspx?

Very simple and straightforward.
The most confusing part has been getting to that page. There is no menu item for "Roth Conversion" under "Accounts", where the url implies it would be. Neither have I found a menu item for Roth conversions anywhere else.

There is an item for "transfer" and you can, I think, now use that to start a roth conversion as long as the Roth account already exists. For a while the only way I could find the roth conversion page was a search of the site and if I, instead, I went to the "transfer" page that would only allow conversion of a full position. At an earlier time, I think going to the transfer page and starting a transfer from TIRA to Roth would say something like "that can't be done from here" and give a link to the page that you have provided a link to.
If you use the URL I provided in the link and then login to your account, you will be at the Roth conversion page.

(To get there indirectly, go to Accounts, Transfers & Payments and Online Transfers. When you attempt to transfer into your Roth IRA account from a traditional IRA account, it will display the same link I provided.)

If you don't already have a Roth IRA opened, no problem. On the Roth conversion page is a grayed-out "Open a Roth IRA" button. Once you select the "FROM" account, the Open a Roth IRA button is no longer grayed-out and becomes available to select.
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Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

Post by jeffyscott »

galawdawg wrote: Sat Aug 07, 2021 10:49 am
jeffyscott wrote: Sat Aug 07, 2021 10:32 am
galawdawg wrote: Sat Aug 07, 2021 10:04 am
Tubes wrote: Sat Aug 07, 2021 9:54 am Question: is it easy to convert a tIRA (full or partial) to a Roth IRA at Schwab? Can this be done online.
Yes, you can do a Roth IRA conversion online at Schwab: https://client.schwab.com/Accounts/Roth ... rsion.aspx?

Very simple and straightforward.
The most confusing part has been getting to that page. There is no menu item for "Roth Conversion" under "Accounts", where the url implies it would be. Neither have I found a menu item for Roth conversions anywhere else.

There is an item for "transfer" and you can, I think, now use that to start a roth conversion as long as the Roth account already exists. For a while the only way I could find the roth conversion page was a search of the site and if I, instead, I went to the "transfer" page that would only allow conversion of a full position. At an earlier time, I think going to the transfer page and starting a transfer from TIRA to Roth would say something like "that can't be done from here" and give a link to the page that you have provided a link to.
If you use the URL I provided in the link and then login to your account, you will be at the Roth conversion page.

(To get there indirectly, go to Accounts, Transfers & Payments and Online Transfers. When you attempt to transfer into your Roth IRA account from a traditional IRA account, it will display the same link I provided.)

If you don't already have a Roth IRA opened, no problem. On the Roth conversion page is a grayed-out "Open a Roth IRA" button. Once you select the "FROM" account, the Open a Roth IRA button is no longer grayed-out and becomes available to select.
Right, I am aware of all that. Except I think they have changed it and you now can actually proceed from the transfer page, without the link appearing or ever going to the Roth conversion page that you linked to.

I did not go all the way through, as I did not want to complete a conversion, but from the online transfer page after indicating shares that I wanted to transfer from TIRA to Roth, clicking "continue" brings up new page with withholding elections, etc. and clicking continue there would appear to me to be the final step to actually completing the conversion (I did not do it, though).

This is a very recent change, I think they had been working on that path for a while :?: . As I noted, at one time it seemed like it was ready to work that way, but only if you wanted to convert all shares of a position. I will be doing a conversion later this month and can try to see if starting from transfers is now fully functional, as I suspect, rather than sending you to the other page via a link.

I did finally find the actual menu path to your link for conversions, it's under: service - forms (not a very intuitive location to look for how to do a conversion online)
That menu path leads here: https://client.schwab.com/areas/service ... tion/forms
There is then a link for "Convert Traditional IRA to Roth IRA", when you click on that, it brings up this pop-up

Image

and the link in the pop-up goes to the page that you had linked to.
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Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

Post by csm »

Thanks to those who provided answers above. I found the place to add my beneficiary online, so I've added my husband as sole beneficiary which was the simplest for me at this time (rather than establishing a joint account).

Something else interesting regarding my query about adding the checking + debit card in case it's of interest to others.

I phoned Schwab about opening a checking account to add to my existing brokerage, and she happened to mention that it is taking about a month right now for checking accounts to be set up. When I mentioned that my sole purpose was to get the debit card for use abroad next month, she told me that I could actually have a debit card added to the brokerage account without establishing a checking account. This is actually better because I really didn't need or want another checking account. I only wanted the "no foreign transaction fee" ability to withdraw cash from an ATM while in Europe.

She said that it will probably be about a week to get the debit card that draws from the cash in the brokerage account.
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Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

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galawdawg wrote: Thu Aug 05, 2021 6:13 pm
rob wrote: Thu Aug 05, 2021 5:55 pm
galawdawg wrote: Thu Aug 05, 2021 8:53 am
  • Can I do same-day Vanguard mutual fund exchanges?
No. If you wish to exchange one Vanguard mutual fund for another, the exchange will take place in two transactions on two consecutive trading days. The sale of the fund to be exchanged from will take place at the end of trading day 1, the purchase of the fund to be exchanged into will take place at the end of trading day 2.
I've been 1/2 seriously looking at Fido, Schwab and ETrade... This one is a real hit against Schwab for me. Thanks for the info - that helps.
You may find the same at E*TRADE and Fidelity as well (although I cannot say for certain). Of course, Fidelity will charge you a transaction fee of $75.00 for each purchase of most Vanguard mutual funds (an exchange would incur this fee).

If it is important to an investor to have no delay (or time out of the market) between the sale of one Vanguard fund and the purchase of another, then they may need to either remain at Vanguard OR use Vanguard ETFs rather than mutual funds.
Yeah I expect your right... I FAR prefer the concept of the mutual only acct (old) du to employment limitations - although that will go away soon enough, so starting to look around. A lot of my taxable holdings are NON etf eligible funds and they have large unrealized gains... Been at V for almost 30 years, so have clearly seen the decline in service over the years. In hindsight (and today) I would have used etf's only but that was hard since they didn't exist when I started down this road :-)
| Rob | Its a dangerous business going out your front door. - J.R.R.Tolkien
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Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

Post by jeffyscott »

rob wrote: Sat Aug 07, 2021 3:45 pm
galawdawg wrote: Thu Aug 05, 2021 6:13 pm
rob wrote: Thu Aug 05, 2021 5:55 pm
galawdawg wrote: Thu Aug 05, 2021 8:53 am
  • Can I do same-day Vanguard mutual fund exchanges?
No. If you wish to exchange one Vanguard mutual fund for another, the exchange will take place in two transactions on two consecutive trading days. The sale of the fund to be exchanged from will take place at the end of trading day 1, the purchase of the fund to be exchanged into will take place at the end of trading day 2.
I've been 1/2 seriously looking at Fido, Schwab and ETrade... This one is a real hit against Schwab for me. Thanks for the info - that helps.
You may find the same at E*TRADE and Fidelity as well (although I cannot say for certain). Of course, Fidelity will charge you a transaction fee of $75.00 for each purchase of most Vanguard mutual funds (an exchange would incur this fee).

If it is important to an investor to have no delay (or time out of the market) between the sale of one Vanguard fund and the purchase of another, then they may need to either remain at Vanguard OR use Vanguard ETFs rather than mutual funds.
Yeah I expect your right... I FAR prefer the concept of the mutual only acct (old) du to employment limitations - although that will go away soon enough, so starting to look around. A lot of my taxable holdings are NON etf eligible funds and they have large unrealized gains... Been at V for almost 30 years, so have clearly seen the decline in service over the years. In hindsight (and today) I would have used etf's only but that was hard since they didn't exist when I started down this road :-)
I agree that it is probably easier and better to just hold Vanguard mutual funds at Vanguard. However, by going through all but the final step of putting in a buy order, while having no cash available, I was able to confirm that same day exchanges are possible via doing two separate orders, as I had described above:

Image
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Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

Post by galawdawg »

At first glance, that looks like it would probably work. Now who is going to be the guinea pig who actually places the orders to see whether or not any trading violation occurs? :happy

On a related note, for a buy and hold investor, just how important and frequent is this tax-loss harvesting that one must have zero time out of the market? Other than a few big drops over the last twenty (20) years (March 2020 and December 2018 being the most recent two), VTSAX hasn't had the kind of drops that would generally result in a loss for long-term holders of VTSAX. It appears that tax-loss harvesting of mutual funds, which are generally less volatile than individual stocks, would seem to generally require either a substantial drop in share price OR a less-substantial drop following a fairly recent purchase to generate a "harvestable" loss.

What am I missing? Are there other Vanguard mutual funds whose volatility makes them a better candidate for tax-loss harvesting? Do those who tax-loss harvest mutual funds trade frequently, capturing small losses on an ongoing basis? Are those investors transacting in such large sums that even a small loss per share can result in a significant tax-loss when harvested?
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Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

Post by sycamore »

galawdawg wrote: Sun Aug 08, 2021 8:19 am At first glance, that looks like it would probably work. Now who is going to be the guinea pig who actually places the orders to see whether or not any trading violation occurs? :happy
...
Curious what trading violation you think it would be. SEC regulation, industry standard violation, or Schwab-specific, or something else? The scenario we're talking seems like an ordinary mutual fund settlement scenario.

If I own a mutual fund (settled), then sell it on Monday, place an order for mutual fund #2 also on Monday, and on T+1 Tuesday the proceeds from the sale are enough to cover the purchase, what violation occurred?

Edited to add: I think the FAQ is still accurate enough regarding same day exchange of Vanguard funds at Schwab. You can do an "exchange" of Vanguard funds but it's not seamless. You're stuck with not knowing exactly how much money you'll get from the sale and thus being uncertain about how much you can buy without having to add money to the settlement account.
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Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

Post by jeffyscott »

sycamore wrote: Sun Aug 08, 2021 8:50 am
galawdawg wrote: Sun Aug 08, 2021 8:19 am At first glance, that looks like it would probably work. Now who is going to be the guinea pig who actually places the orders to see whether or not any trading violation occurs? :happy
...
Curious what trading violation you think it would be. SEC regulation, industry standard violation, or Schwab-specific, or something else? The scenario we're talking seems like an ordinary mutual fund settlement scenario.

If I own a mutual fund (settled), then sell it on Monday, place an order for mutual fund #2 also on Monday, and on T+1 Tuesday the proceeds from the sale are enough to cover the purchase, what violation occurred?

Edited to add: I think the FAQ is still accurate enough regarding same day exchange of Vanguard funds at Schwab. You can do an "exchange" of Vanguard funds but it's not seamless. You're stuck with not knowing exactly how much money you'll get from the sale and thus being uncertain about how much you can buy without having to add money to the settlement account.
The order would be in dollars, so not sure why you think you would not know how much money it would be? In doing two orders this way, you would only want to do it in dollars, as that is the only way you can make the buy order equal to the sell order, since you will not know the closing price.

I have done many, many orders this way over the past few years. Schwab had told me in a chat that I could do this, when I had asked. I saved the transcript, here it is, in part:

Jeffyscott: Hi, I want to know if it is ever possible to exchange mutual funds on the same day, with no cash in the account? For example can I enter an order to sell $1000 of XXXXX and at the same time enter an order to buy $1000 of YYYYY, with no cash in account?

Schwab Rep: You absolutely have the ability to enter a Sell order for XXXXX and a purchase order for YYYYY the same day! Because these are both mutual funds they will settle the same day in the account.

Jeffyscott: In the past I have entered by starting with the menu item "sell and buy another" and there is a day in between. So instead I guess I would just need to enter each one as a separate order?

Schwab Rep: You are exactly correct ! If you were to enter this order as Sell and Buy another the sell order would happen today and then the purchase order would happen on Monday. However, as you mentioned you can enter separate orders to have both trades go through today.
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Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

Post by galawdawg »

jeffyscott wrote: Sun Aug 08, 2021 9:14 am
sycamore wrote: Sun Aug 08, 2021 8:50 am
galawdawg wrote: Sun Aug 08, 2021 8:19 am At first glance, that looks like it would probably work. Now who is going to be the guinea pig who actually places the orders to see whether or not any trading violation occurs? :happy
...
Curious what trading violation you think it would be. SEC regulation, industry standard violation, or Schwab-specific, or something else? The scenario we're talking seems like an ordinary mutual fund settlement scenario.

If I own a mutual fund (settled), then sell it on Monday, place an order for mutual fund #2 also on Monday, and on T+1 Tuesday the proceeds from the sale are enough to cover the purchase, what violation occurred?

Edited to add: I think the FAQ is still accurate enough regarding same day exchange of Vanguard funds at Schwab. You can do an "exchange" of Vanguard funds but it's not seamless. You're stuck with not knowing exactly how much money you'll get from the sale and thus being uncertain about how much you can buy without having to add money to the settlement account.
The order would be in dollars, so not sure why you think you would not know how much money it would be? In doing two orders this way, you would only want to do it in dollars, as that is the only way you can make the buy order equal to the sell order, since you will not know the closing price.

I have done many, many orders this way over the past few years. Schwab had told me in a chat that I could do this, when I had asked. I saved the transcript, here it is, in part:

Jeffyscott: Hi, I want to know if it is ever possible to exchange mutual funds on the same day, with no cash in the account? For example can I enter an order to sell $1000 of XXXXX and at the same time enter an order to buy $1000 of YYYYY, with no cash in account?

Schwab Rep: You absolutely have the ability to enter a Sell order for XXXXX and a purchase order for YYYYY the same day! Because these are both mutual funds they will settle the same day in the account.

Jeffyscott: In the past I have entered by starting with the menu item "sell and buy another" and there is a day in between. So instead I guess I would just need to enter each one as a separate order?

Schwab Rep: You are exactly correct ! If you were to enter this order as Sell and Buy another the sell order would happen today and then the purchase order would happen on Monday. However, as you mentioned you can enter separate orders to have both trades go through today.
Awesome, I'll update the FAQ with that workaround!
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Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

Post by jeffyscott »

galawdawg wrote: Thu Aug 05, 2021 8:53 am
  • Will Schwab waive the transaction fee?
Yes, in some cases. Generally, Schwab requires a total portfolio size of $250k to waive all mutual fund transaction fees for a single fund family (such as Vanguard). Some report that the required portfolio size is as little as $100k. If you qualify for a fee waiver, it will apply to all of the Vanguard mutual funds available for purchase at Schwab.
    Any chance you would be willing to post a screen shot that shows a buy order, ready to be submitted, for a Vanguard mutual fund purchase that shows no transaction fee?

    I have never asked for this, but am considering doing so in order to do some consolidation.
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    Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

    Post by galawdawg »

    jeffyscott wrote: Sun Aug 08, 2021 9:24 am
    galawdawg wrote: Thu Aug 05, 2021 8:53 am
    • Will Schwab waive the transaction fee?
    Yes, in some cases. Generally, Schwab requires a total portfolio size of $250k to waive all mutual fund transaction fees for a single fund family (such as Vanguard). Some report that the required portfolio size is as little as $100k. If you qualify for a fee waiver, it will apply to all of the Vanguard mutual funds available for purchase at Schwab.
      Any chance you would be willing to post a screen shot that shows a buy order, ready to be submitted, for a Vanguard mutual fund purchase that shows no transaction fee?

      I have never asked for this, but am considering doing so in order to do some consolidation.
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      Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

      Post by Blue456 »

      csm wrote: Sat Aug 07, 2021 3:21 pm Thanks to those who provided answers above. I found the place to add my beneficiary online, so I've added my husband as sole beneficiary which was the simplest for me at this time (rather than establishing a joint account).

      Something else interesting regarding my query about adding the checking + debit card in case it's of interest to others.

      I phoned Schwab about opening a checking account to add to my existing brokerage, and she happened to mention that it is taking about a month right now for checking accounts to be set up. When I mentioned that my sole purpose was to get the debit card for use abroad next month, she told me that I could actually have a debit card added to the brokerage account without establishing a checking account. This is actually better because I really didn't need or want another checking account. I only wanted the "no foreign transaction fee" ability to withdraw cash from an ATM while in Europe.

      She said that it will probably be about a week to get the debit card that draws from the cash in the brokerage account.
      How did you get debit card added to brokerage account? What is the difference between brokerage with debit card vs checking account with debit card?
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      Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

      Post by jeffyscott »

      galawdawg wrote: Sun Aug 08, 2021 9:34 am
      Thanks :thumbsup
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      Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

      Post by HomeStretch »

      galawdawg wrote: Sun Aug 08, 2021 8:19 am …On a related note, for a buy and hold investor, just how important and frequent is this tax-loss harvesting that one must have zero time out of the market? …
      In my specific case, tax loss harvesting (TLH) if an opportunity arises during the next few years is helpful in terms of:
      (1) creating a large capital loss carryforward for Federal income tax purposes in order to manage income for ACA/Medicare IRMAA purposes. I will have significant PE distributions over the next 0-5 years - timing and amount by tax year is unpredictable.
      (2) simplifying my portfolio by exchanging individual stocks with large capital gains for a total stock market fund.

      I will only TLH if a significant market decline (last times I TLH’d were Dec. 2018 and Mar. 2020). For me, TLH works best with zero time out of market. ETA - given the low basis in almost all my mutual funds/stocks, I don’t expect many future TLH opportunities.
      Last edited by HomeStretch on Sun Aug 08, 2021 10:22 am, edited 2 times in total.
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      Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

      Post by galawdawg »

      Blue456 wrote: Sun Aug 08, 2021 9:39 am How did you get debit card added to brokerage account? What is the difference between brokerage with debit card vs checking account with debit card?
      To add a debit card and/or check-writing to an existing brokerage account, just complete this form and upload it to Schwab by secure message: https://client.schwab.com/secure/file?cmsid=P-221804

      As noted in the FAQ, many banking features (such as debit card, check-writing, online bill pay, and so on) can be accessed in your Schwab brokerage account which uses your cash sweep balance. Some investors, however, prefer to have their cash and "banking" funds segregated from their investments, limiting "exposure" of their brokerage account for additional security.
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      Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

      Post by sycamore »

      jeffyscott wrote: Sun Aug 08, 2021 9:14 am ...
      The order would be in dollars, so not sure why you think you would not know how much money it would be? In doing two orders this way, you would only want to do it in dollars, as that is the only way you can make the buy order equal to the sell order, since you will not know the closing price.
      ...
      Ok, that makes sense. I was thinking of a different scenario, a total exchange of one fund to another where the order is in #shares. Another one might be where you want to sell a specific lot for tax-loss harvesting.
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      Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

      Post by csm »

      Blue456 wrote: Sun Aug 08, 2021 9:39 am
      csm wrote: Sat Aug 07, 2021 3:21 pm
      I phoned Schwab about opening a checking account to add to my existing brokerage, and she happened to mention that it is taking about a month right now for checking accounts to be set up. When I mentioned that my sole purpose was to get the debit card for use abroad next month, she told me that I could actually have a debit card added to the brokerage account without establishing a checking account. This is actually better because I really didn't need or want another checking account. I only wanted the "no foreign transaction fee" ability to withdraw cash from an ATM while in Europe.

      She said that it will probably be about a week to get the debit card that draws from the cash in the brokerage account.
      How did you get debit card added to brokerage account? What is the difference between brokerage with debit card vs checking account with debit card?
      I don't have it yet. I just uploaded the form to secure message yesterday so am waiting for it to be processed and the debit card sent.
      galawdawg wrote: Sun Aug 08, 2021 10:19 am
      To add a debit card and/or check-writing to an existing brokerage account, just complete this form and upload it to Schwab by secure message: https://client.schwab.com/secure/file?cmsid=P-221804

      As noted in the FAQ, many banking features (such as debit card, check-writing, online bill pay, and so on) can be accessed in your Schwab brokerage account which uses your cash sweep balance. Some investors, however, prefer to have their cash and "banking" funds segregated from their investments, limiting "exposure" of their brokerage account for additional security.
      ^This.
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      Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

      Post by jeffyscott »

      sycamore wrote: Sun Aug 08, 2021 2:12 pm
      jeffyscott wrote: Sun Aug 08, 2021 9:14 am ...
      The order would be in dollars, so not sure why you think you would not know how much money it would be? In doing two orders this way, you would only want to do it in dollars, as that is the only way you can make the buy order equal to the sell order, since you will not know the closing price.
      ...
      Ok, that makes sense. I was thinking of a different scenario, a total exchange of one fund to another where the order is in #shares. Another one might be where you want to sell a specific lot for tax-loss harvesting.
      Yeah, my method would be limited to a partial exchanges in dollars and would not work for those situations. For the total exchange, you could at least do most of it in a few chunks (in dollars) and just have the final small piece be out of the market for a day.
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      Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

      Post by csm »

      My transfer of Vanguard mutual funds to Schwab was completed overnight and I'm very impressed with how quickly and smoothly it went. I initiated the request in my Schwab account last Wednesday, Aug 4 and requested it as a total account transfer. Initially, it said that the transfer was estimated to be completed by the 11th. After a couple of days, when I viewed the transfer status screen in my Schwab account, it stated that it estimated completion to be on the 10th.

      For some reason, I thought I would see the funds go to -0- in Vanguard on one day before seeing them in Schwab the next, but late last evening (the 9th), my Vanguard account still showed full balances. When I got up this morning, I had an email from Schwab (sent at 12:53 am) that the transfer was complete. And sure enough, they were there when I checked the account early this morning (before 8:00 am on the 10th).

      One thing that surprised me was that my remaining cash balance account in Vanguard was left in Vanguard. I thought when I requested to transfer the entire account, that they would also transfer the cash. So I'll do that manually.

      Just wanted to share this in case anyone else was curious about how a transfer from VG to Schwab would go. Schwab agreed to match the current bonus from e-Trade/Ally which is $1200 for transferring $500k within 45 days. My VG account was just under this amount so I will top up from another source to reach the $500k. They would have matched $600 for <$500k but since I was so close, I thought it was worth topping up to earn the $1200. This match was granted even though I already had a Schwab One brokerage account.

      The VG rep also confirmed that they will reimburse any fee charged by VG for doing this transfer, and confirmed there will be no fees when I eventually sell these funds. They also confirmed I could make purchases even though all four of my funds are Admiral shares, but it is unlikely I will add to these. They are hold and forget until needed for me. I forgot to ask if they would waive fees should I decide to make future purchases, but I'm not concerned about that, and assume I could probably arrange that with them.
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      Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

      Post by Nate79 »

      csm wrote: Tue Aug 10, 2021 7:35 am My transfer of Vanguard mutual funds to Schwab was completed overnight and I'm very impressed with how quickly and smoothly it went. I initiated the request in my Schwab account last Wednesday, Aug 4 and requested it as a total account transfer. Initially, it said that the transfer was estimated to be completed by the 11th. After a couple of days, when I viewed the transfer status screen in my Schwab account, it stated that it estimated completion to be on the 10th.

      For some reason, I thought I would see the funds go to -0- in Vanguard on one day before seeing them in Schwab the next, but late last evening (the 9th), my Vanguard account still showed full balances. When I got up this morning, I had an email from Schwab (sent at 12:53 am) that the transfer was complete. And sure enough, they were there when I checked the account early this morning (before 8:00 am on the 10th).

      One thing that surprised me was that my remaining cash balance account in Vanguard was left in Vanguard. I thought when I requested to transfer the entire account, that they would also transfer the cash. So I'll do that manually.

      Just wanted to share this in case anyone else was curious about how a transfer from VG to Schwab would go. Schwab agreed to match the current bonus from e-Trade/Ally which is $1200 for transferring $500k within 45 days. My VG account was just under this amount so I will top up from another source to reach the $500k. They would have matched $600 for <$500k but since I was so close, I thought it was worth topping up to earn the $1200. This match was granted even though I already had a Schwab One brokerage account.

      The VG rep also confirmed that they will reimburse any fee charged by VG for doing this transfer, and confirmed there will be no fees when I eventually sell these funds. They also confirmed I could make purchases even though all four of my funds are Admiral shares, but it is unlikely I will add to these. They are hold and forget until needed for me. I forgot to ask if they would waive fees should I decide to make future purchases, but I'm not concerned about that, and assume I could probably arrange that with them.
      You may want to hold off on any cash transfer requests from VG to Schwab for a week or two until everything gets settled. There is a chance the cash will sweep over a little delayed and it would confuse things to enter another request.
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      Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

      Post by galawdawg »

      csm wrote: Tue Aug 10, 2021 7:35 am I forgot to ask if they would waive fees should I decide to make future purchases, but I'm not concerned about that, and assume I could probably arrange that with them.
      You may want to go ahead and ask about that now while it is fresh on your mind. Otherwise, you may get a few months or more down the road, forget again to ask (or want to make a purchase before you confirm with Schwab that they will waive the transaction fees), and incur a transaction fee that could have been avoided.

      Nate79 wrote: Tue Aug 10, 2021 7:49 am
      csm wrote: Tue Aug 10, 2021 7:35 am One thing that surprised me was that my remaining cash balance account in Vanguard was left in Vanguard. I thought when I requested to transfer the entire account, that they would also transfer the cash. So I'll do that manually.
      You may want to hold off on any cash transfer requests from VG to Schwab for a week or two until everything gets settled. There is a chance the cash will sweep over a little delayed and it would confuse things to enter another request.
      Agree. Cash and any residual dividends (such as from VBTLX or any money market) may trickle in to Schwab over the course of the next couple of weeks.
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      Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

      Post by csm »

      Thanks for the advice to wait. I looked at the transfer status screen in Schwab and it does show a second transfer processing with estimated completion date of 8/12/2021, so I'm guessing this is the final cash transfer.
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      Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

      Post by stupidkid »

      As a current td Ameritrade customer I inquired on the eligibility of bonus matching for moving my Ameritrade account to Schwab. I was told that Schwab is firm on not giving a bonus to TD Ameritrade customers. Disappointing but not terribly surprising. I'm long term interested in staying with Schwab but half thinking to move somewhere for 6 months and then transfer in...
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      Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

      Post by BogleFan510 »

      I did not see it mentioned before, but a nice Schwab feature for those holding both joint and individual brokerage and retirement accounts is the ability to grant view only rights for your accounts to your spouse. The only exceptions for us are our self directed 401k accounts (but we are converting those over time anyway). It is nice to see the family total as the assets total, including our individual and joint accounts.
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      Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

      Post by nalor511 »

      jeffyscott wrote: Sun Aug 08, 2021 9:14 am
      sycamore wrote: Sun Aug 08, 2021 8:50 am
      galawdawg wrote: Sun Aug 08, 2021 8:19 am At first glance, that looks like it would probably work. Now who is going to be the guinea pig who actually places the orders to see whether or not any trading violation occurs? :happy
      ...
      Curious what trading violation you think it would be. SEC regulation, industry standard violation, or Schwab-specific, or something else? The scenario we're talking seems like an ordinary mutual fund settlement scenario.

      If I own a mutual fund (settled), then sell it on Monday, place an order for mutual fund #2 also on Monday, and on T+1 Tuesday the proceeds from the sale are enough to cover the purchase, what violation occurred?

      Edited to add: I think the FAQ is still accurate enough regarding same day exchange of Vanguard funds at Schwab. You can do an "exchange" of Vanguard funds but it's not seamless. You're stuck with not knowing exactly how much money you'll get from the sale and thus being uncertain about how much you can buy without having to add money to the settlement account.
      The order would be in dollars, so not sure why you think you would not know how much money it would be? In doing two orders this way, you would only want to do it in dollars, as that is the only way you can make the buy order equal to the sell order, since you will not know the closing price.

      I have done many, many orders this way over the past few years. Schwab had told me in a chat that I could do this, when I had asked. I saved the transcript, here it is, in part:

      Jeffyscott: Hi, I want to know if it is ever possible to exchange mutual funds on the same day, with no cash in the account? For example can I enter an order to sell $1000 of XXXXX and at the same time enter an order to buy $1000 of YYYYY, with no cash in account?

      Schwab Rep: You absolutely have the ability to enter a Sell order for XXXXX and a purchase order for YYYYY the same day! Because these are both mutual funds they will settle the same day in the account.

      Jeffyscott: In the past I have entered by starting with the menu item "sell and buy another" and there is a day in between. So instead I guess I would just need to enter each one as a separate order?

      Schwab Rep: You are exactly correct ! If you were to enter this order as Sell and Buy another the sell order would happen today and then the purchase order would happen on Monday. However, as you mentioned you can enter separate orders to have both trades go through today.
      Did anyone actually do this? Sell VG mf, then separately buy something else same day?

      Because Schwab support on 2 separate occasions last week told me this *would not work* regardless if I attempted to purchase another MF or an ETF
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      Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

      Post by galawdawg »

      nalor511 wrote: Tue Aug 10, 2021 7:52 pm
      jeffyscott wrote: Sun Aug 08, 2021 9:14 am
      sycamore wrote: Sun Aug 08, 2021 8:50 am
      galawdawg wrote: Sun Aug 08, 2021 8:19 am At first glance, that looks like it would probably work. Now who is going to be the guinea pig who actually places the orders to see whether or not any trading violation occurs? :happy
      ...
      Curious what trading violation you think it would be. SEC regulation, industry standard violation, or Schwab-specific, or something else? The scenario we're talking seems like an ordinary mutual fund settlement scenario.

      If I own a mutual fund (settled), then sell it on Monday, place an order for mutual fund #2 also on Monday, and on T+1 Tuesday the proceeds from the sale are enough to cover the purchase, what violation occurred?

      Edited to add: I think the FAQ is still accurate enough regarding same day exchange of Vanguard funds at Schwab. You can do an "exchange" of Vanguard funds but it's not seamless. You're stuck with not knowing exactly how much money you'll get from the sale and thus being uncertain about how much you can buy without having to add money to the settlement account.
      The order would be in dollars, so not sure why you think you would not know how much money it would be? In doing two orders this way, you would only want to do it in dollars, as that is the only way you can make the buy order equal to the sell order, since you will not know the closing price.

      I have done many, many orders this way over the past few years. Schwab had told me in a chat that I could do this, when I had asked. I saved the transcript, here it is, in part:

      Jeffyscott: Hi, I want to know if it is ever possible to exchange mutual funds on the same day, with no cash in the account? For example can I enter an order to sell $1000 of XXXXX and at the same time enter an order to buy $1000 of YYYYY, with no cash in account?

      Schwab Rep: You absolutely have the ability to enter a Sell order for XXXXX and a purchase order for YYYYY the same day! Because these are both mutual funds they will settle the same day in the account.

      Jeffyscott: In the past I have entered by starting with the menu item "sell and buy another" and there is a day in between. So instead I guess I would just need to enter each one as a separate order?

      Schwab Rep: You are exactly correct ! If you were to enter this order as Sell and Buy another the sell order would happen today and then the purchase order would happen on Monday. However, as you mentioned you can enter separate orders to have both trades go through today.
      Did anyone actually do this? Sell VG mf, then separately buy something else same day?

      Because Schwab support on 2 separate occasions last week told me this *would not work* regardless if I attempted to purchase another MF or an ETF
      According to jeffyscott's post, he has.
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      Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

      Post by nalor511 »

      galawdawg wrote: Tue Aug 10, 2021 7:57 pm
      nalor511 wrote: Tue Aug 10, 2021 7:52 pm
      jeffyscott wrote: Sun Aug 08, 2021 9:14 am
      sycamore wrote: Sun Aug 08, 2021 8:50 am
      galawdawg wrote: Sun Aug 08, 2021 8:19 am At first glance, that looks like it would probably work. Now who is going to be the guinea pig who actually places the orders to see whether or not any trading violation occurs? :happy
      ...
      Curious what trading violation you think it would be. SEC regulation, industry standard violation, or Schwab-specific, or something else? The scenario we're talking seems like an ordinary mutual fund settlement scenario.

      If I own a mutual fund (settled), then sell it on Monday, place an order for mutual fund #2 also on Monday, and on T+1 Tuesday the proceeds from the sale are enough to cover the purchase, what violation occurred?

      Edited to add: I think the FAQ is still accurate enough regarding same day exchange of Vanguard funds at Schwab. You can do an "exchange" of Vanguard funds but it's not seamless. You're stuck with not knowing exactly how much money you'll get from the sale and thus being uncertain about how much you can buy without having to add money to the settlement account.
      The order would be in dollars, so not sure why you think you would not know how much money it would be? In doing two orders this way, you would only want to do it in dollars, as that is the only way you can make the buy order equal to the sell order, since you will not know the closing price.

      I have done many, many orders this way over the past few years. Schwab had told me in a chat that I could do this, when I had asked. I saved the transcript, here it is, in part:

      Jeffyscott: Hi, I want to know if it is ever possible to exchange mutual funds on the same day, with no cash in the account? For example can I enter an order to sell $1000 of XXXXX and at the same time enter an order to buy $1000 of YYYYY, with no cash in account?

      Schwab Rep: You absolutely have the ability to enter a Sell order for XXXXX and a purchase order for YYYYY the same day! Because these are both mutual funds they will settle the same day in the account.

      Jeffyscott: In the past I have entered by starting with the menu item "sell and buy another" and there is a day in between. So instead I guess I would just need to enter each one as a separate order?

      Schwab Rep: You are exactly correct ! If you were to enter this order as Sell and Buy another the sell order would happen today and then the purchase order would happen on Monday. However, as you mentioned you can enter separate orders to have both trades go through today.
      Did anyone actually do this? Sell VG mf, then separately buy something else same day?

      Because Schwab support on 2 separate occasions last week told me this *would not work* regardless if I attempted to purchase another MF or an ETF
      According to jeffyscott's post, he has.
      Saw that, trying to clarify if it was an VG MF, because they told me it cannot be done with off brand. I also have my transcript. From last week
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      Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

      Post by galawdawg »

      nalor511 wrote: Tue Aug 10, 2021 8:09 pm Saw that, trying to clarify if it was an VG MF, because they told me it cannot be done with off brand. I also have my transcript. From last week
      Why not give it a try yourself with a very small amount?
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      Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

      Post by bradinsky »

      Long time Schwab client here. I have used the “sell and buy another” selection many times. The sell happens on the 1st day & the buy is the 2nd day.
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      Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

      Post by galawdawg »

      bradinsky wrote: Wed Aug 11, 2021 5:59 am Long time Schwab client here. I have used the “sell and buy another” selection many times. The sell happens on the 1st day & the buy is the 2nd day.
      Thanks. I've got that feature and trade timing noted in the FAQ above.

      The discussion about placing two separate trades, rather than using "Sell and Buy Another" is to have both the sale and the purchase occur on the same trading day at that day's closing NAV. That avoids the buy portion of the "exchange" occurring one day later than the sell portion, which is important to some investors.
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      Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

      Post by HomeStretch »

      galawdawg wrote: Wed Aug 11, 2021 6:15 am … The discussion about placing two separate trades, rather than using "Sell and Buy Another" is to have both the sale and the purchase occur on the same trading day at that day's closing NAV. That avoids the buy portion of the "exchange" occurring one day later than the sell portion, which is important to some investors.
      The scenario being discussed is whether unsettled funds from the sale of a VG fund (and not margin or existing settlement account cash) may be used to do a same-day purchase of another VG fund, is that correct?
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      Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

      Post by galawdawg »

      Yes. It assumes no cash in the account so only the proceeds of the sale of one VG mutual fund are used to purchase a second VG mutual fund on the same trading day.

      An "exchange" at Vanguard is handled like this example: Prior to 4:00pm ET on trading day 1, investor places exchange order to exchange XXXX amount of VTSAX for VFIAX. When NAV is determined for VTSAX and VFIAX after market close on trading day 1, Vanguard sells the appropriate amount of VTSAX and simultaneously purchases an equal amount of VFIAX for the investor. It all occurs after market close on trading day 1. No cash, no delay, no time out of market. The investor can make an educated guess at what he/she thinks VTSAX will sell for and what VFIAX will cost based upon performance of VTI and VOO that day.

      A "sell and buy another" trade at Schwab is handled like this example: Prior to 4:00pm ET 4:00pm ET on trading day 1, investor places "sell and buy another" order to sell XXXX amount of VTSAX and buy an equal amount of VFIAX. When NAV is determined for VTSAX after market close on trading day 1, Schwab sells the appropriate amount of VTSAX. No purchase is made on trading day 1. Then, when NAV is determined for VFIAX after market close on trading day 2, Schwab executes the purchase of VFIAX. The transaction takes two trading days and the funds from the sale on trading day 1 is out of the market for one day. While the investor can make an educated guess at what he/she thinks VTSAX will sell for, he/she cannot predict what VFIAX will cost to purchase on trading day 2 as the order is placed on trading day 1. That may be important to investors who are tax-loss harvesting.

      As explained by jeffyscott, the objective of placing two separate orders, one to sell and one to buy, both on the same trading day is to circumvent the time out of market and allow the investor to make an educated prediction of both the sale price and the buy price. It mimics how Vanguard handles an exchange of mutual funds. Whether that can actually be accomplished when there are no settled funds in the account is the question that I believe is at issue for some.

      You may already understand all of this, but I thought an explanation might help others who are less-experienced investors or new to Schwab.
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      Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

      Post by increment »

      galawdawg wrote: Wed Aug 11, 2021 6:52 am A "sell and buy another" trade at Schwab is handled like this example: Prior to 4:00pm ET 4:00pm ET on trading day 1, investor places "sell and buy another" order to sell XXXX amount of VTSAX and buy an equal amount of VFIAX. When NAV is determined for VTSAX after market close on trading day 1, Schwab sells the appropriate amount of VTSAX. No purchase is made on trading day 1.
      Perhaps this avoids any problems with "emergency circumstances," in which (according to Vanguard's prospectus) "Vanguard funds can postpone payment of redemption proceeds for up to seven calendar days."
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      Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

      Post by jeffyscott »

      galawdawg wrote: Wed Aug 11, 2021 6:52 amAs explained by jeffyscott, the objective of placing two separate orders, one to sell and one to buy, both on the same trading day is to circumvent the time out of market and allow the investor to make an educated prediction of both the sale price and the buy price. It mimics how Vanguard handles an exchange of mutual funds. Whether that can actually be accomplished when there are no settled funds in the account is the question that I believe is at issue for some.
      To clarify, for me there is no "educated prediction" involved, both the sell and buy orders are in dollars.

      I have not done this with Vanguard, but have done with other non-Schwab funds. To test it all one has to do is to go through the initial steps of placing a buy order with no cash and see if you get the same thing that both I and you posted screen shots of:
      viewtopic.php?p=6162588#p6162588

      viewtopic.php?p=6162427#p6162427

      If going to that step is not convincing, one can just go ahead and actually place two small orders. For most funds, including Vanguard, you can trade as little as $1. And with a mutual fund order, you can always just cancel so the the orders that were placed do not actually go through.

      Note that I generally enter the sell order first and then I do not even get the check box thing, there is merely an ordinary warning that says: "This buy order was accepted without sufficient settled funds to trade in your account."

      Sorry that my posting about this has gummed up your FAQ thread as much as it has. :beer
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      Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

      Post by UpperNwGuy »

      galawdawg wrote: Wed Aug 11, 2021 6:52 am As explained by jeffyscott, the objective of placing two separate orders, one to sell and one to buy, both on the same trading day is to circumvent the time out of market and allow the investor to make an educated prediction of both the sale price and the buy price. It mimics how Vanguard handles an exchange of mutual funds. Whether that can actually be accomplished when there are no settled funds in the account is the question that I believe is at issue for some.
      When you place the buy order for the new fund, what do you identify as the funding source given that there are no funds in settlement?
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      Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

      Post by galawdawg »

      jeffyscott wrote: Wed Aug 11, 2021 9:36 am
      galawdawg wrote: Wed Aug 11, 2021 6:52 amAs explained by jeffyscott, the objective of placing two separate orders, one to sell and one to buy, both on the same trading day is to circumvent the time out of market and allow the investor to make an educated prediction of both the sale price and the buy price. It mimics how Vanguard handles an exchange of mutual funds. Whether that can actually be accomplished when there are no settled funds in the account is the question that I believe is at issue for some.
      To clarify, for me there is no "educated prediction" involved, both the sell and buy orders are in dollars....
      I meant an educated prediction about the sale price (NAV) and buy price (NAV) of each fund share, not the overall amount of the transaction...

      :sharebeer
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      Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

      Post by galawdawg »

      UpperNwGuy wrote: Wed Aug 11, 2021 9:37 am
      galawdawg wrote: Wed Aug 11, 2021 6:52 am As explained by jeffyscott, the objective of placing two separate orders, one to sell and one to buy, both on the same trading day is to circumvent the time out of market and allow the investor to make an educated prediction of both the sale price and the buy price. It mimics how Vanguard handles an exchange of mutual funds. Whether that can actually be accomplished when there are no settled funds in the account is the question that I believe is at issue for some.
      When you place the buy order for the new fund, what do you identify as the funding source given that there are no funds in settlement?
      Schwab doesn't have a field for entry of the funding source. Transactions in the brokerage account are funded by the funds available in that account. Hence the warnings shown in order messages #1 and #6 in the order verification screen posted by jeffyscott.
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      Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

      Post by bhjjk19 »

      RMD's were not mentioned in this thread. Does Schwab do automatic RMD's for clients and is this a free service?
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      Re: Schwab Information Thread with FAQ, Links, Tips and Q&A

      Post by galawdawg »

      bhjjk19 wrote: Wed Aug 11, 2021 10:19 am RMD's were not mentioned in this thread. Does Schwab do automatic RMD's for clients and is this a free service?
      While I haven't yet reached that age, it appears that the Schwab RMD center allows you to calculate and schedule automatic distributions. https://www.schwab.com/go-digital/rmd There is no fee for that. Whether you have to adjust your automatic distribution amount annually is something I can't answer. Sorry.

      They also have a service Schwab Intelligent Portfolios, that I discuss in the FAQ. That service does automatically calculate and perform RMD distributions. There is also no fee for that service, Schwab creates and manages your portfolio for you (similar to Vanguard's digital advisor) and they earn money from the cash portion of the portfolio. You can read more about that in the FAQ or on these web pages: https://intelligent.schwab.com/article/scheduling-rmds and https://intelligent.schwab.com/
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