A direct transfer moves your IRA without tax penalties or waiting periods
When you move an IRA from one financial institution to another, you have two paths: a direct transfer (also called a trustee-to-trustee transfer) or a rollover. A direct transfer is almost always the better choice. Your old institution sends the money straight to your new one, nothing touches your hands, and there are no tax consequences or 60-day important date to worry about. A rollover means you receive the money yourself and have 60 calendar days to deposit it into the new IRA — if you miss that window, the IRS treats it as a withdrawal and you owe income tax plus a 10% penalty if you are under 59½.
The direct transfer process typically takes five to ten business days, though some institutions move faster. You will need to open an IRA at your new institution first (or confirm you already have one there), then contact your current IRA custodian to initiate the transfer. Your new institution can also start the process on their end by requesting the transfer from your old custodian.
Key Takeaways
- A direct transfer sends money straight from your old IRA custodian to your new one, avoiding taxes and the 60-day important date that applies to rollovers.
- You must open an IRA at your new institution before the transfer begins, or confirm you already have one there in the same account type (Traditional, Roth, SEP, or straightforward).
- The transfer typically takes five to ten business days; some custodians complete it faster, while others may take up to three weeks.
- You can transfer between any types of IRAs (Traditional to Traditional, Roth to Roth, SEP to SEP, straightforward to straightforward) without tax consequences, but converting between types (Traditional to Roth) is a taxable event.
- Keep copies of all transfer paperwork and confirm the money arrived in your new account before closing the old one.
Opening an IRA at your new institution
Before you request a transfer, you need an IRA waiting at your destination. Log into your new bank or brokerage's website, call their customer service line, or visit a branch in person. Tell them you want to open an IRA and specify the type: Traditional, Roth, SEP, or straightforward. The type matters — you cannot transfer a Traditional IRA into a Roth IRA through a direct transfer (that would be a conversion, which is taxable).
Opening an IRA usually takes minutes online or over the phone. You will provide your Social Security number, address, and employment information. Some institutions ask whether you plan to fund it with a transfer from another IRA; if they do, say yes. You do not need to fund the account yourself — the transfer will do that. Once the account is open, you will receive an account number. Write it down or take a screenshot; you will need it for the transfer paperwork.
Requesting the transfer from your current custodian
You have two ways to start a direct transfer: contact your old custodian, or ask your new custodian to request it on your behalf. Either way works, though asking your new custodian is often simpler because they handle this constantly and know exactly what paperwork to send.
If you contact your old custodian directly, call their customer service number or log into your account online. Look for a link labeled "transfer," "move my account," or "distribute my IRA." You will fill out a form that asks for your new custodian's name, address, and routing number (or wire instructions), plus your new IRA account number. The form will also ask whether you want to transfer the entire balance or a partial amount. Most people transfer everything, but you can split an IRA across multiple institutions if you want.
If your new custodian initiates the transfer, you may need to sign paperwork authorizing them to request your funds from the old custodian. Some institutions do this entirely online; others mail you a form. Either way, your new custodian will handle the back-and-forth with your old one.
What happens during the transfer
Once the paperwork is submitted, your old custodian has a few business days to process the request. They will verify your identity, confirm the account details, and prepare the funds. The money then moves electronically (usually by wire transfer) to your new custodian. This leg typically takes one to three business days, though some institutions are slower.
Your new custodian receives the funds and deposits them into your IRA. They will send you a confirmation statement showing the deposit. The entire process — from the moment you submit paperwork to the moment the money lands in your new account — usually takes five to ten business days. If either institution is slow or if there are errors in the paperwork, it can stretch to three weeks.
During the transfer, your money is in transit and not invested. If the market moves significantly during those days, you will not gain or lose on that movement. Once the money arrives at your new custodian, it sits in cash until you invest it (or until it is automatically invested according to your new custodian's default settings).
Transfers between different IRA types
You can move money between IRAs of the same type without any tax bill. A Traditional IRA to another Traditional IRA, a Roth to another Roth, a SEP to another SEP — all are direct transfers with no tax consequences. The rules are the same regardless of which institution you are moving from or to.
Converting between types — for example, moving a Traditional IRA into a Roth IRA — is a different transaction called a conversion, not a transfer. Conversions are taxable events. The IRS treats the money as if you withdrew it from the Traditional IRA (and you owe income tax on the pre-tax contributions and all the growth), then deposited it into the Roth. If you are considering a conversion, speak with a tax professional first, because the tax bill can be substantial and the decision depends on your income, tax bracket, and retirement timeline.
Avoiding common mistakes during the transfer
The most common mistake is requesting a check from your old custodian instead of a direct transfer. If your old institution mails you a check, you have 60 days to deposit it into your new IRA. If you miss that important date by even one day, the IRS treats it as a withdrawal. You will owe income tax on the full amount plus a 10% penalty if you are under 59½. Even if you deposit it on time, some people accidentally deposit it into a taxable brokerage account instead of an IRA, which also triggers taxes. Always request a direct transfer, not a check.
Another mistake is closing your old IRA before confirming the money arrived at the new one. Wait until you see the deposit in your new account and receive a confirmation statement. Only then should you contact your old custodian to close the account. If something goes wrong during the transfer — a missing digit in the account number, a routing number error — you want the old account still open so the money can be returned there.
A third mistake is not keeping copies of the transfer paperwork. Save the form you submitted, any confirmation emails, and the statements from both institutions showing the outgoing transfer and incoming deposit. If the IRS ever questions the transfer, you will need proof that it was a direct transfer, not a withdrawal and redeposit.
Timing and what to expect
| Step | Typical Timeline | What You Do |
|---|---|---|
| Open new IRA | Same day to 1 business day | Contact new institution, provide personal info, receive account number |
| Submit transfer paperwork | Same day to 1 business day | Call old custodian or ask new custodian to request transfer |
| Old custodian processes | 1 to 3 business days | Wait; old custodian verifies info and prepares funds |
| Money in transit | 1 to 3 business days | Wait; funds move electronically to new custodian |
| New custodian receives funds | Same day as arrival | Money lands in your new IRA; you receive confirmation |
| Total | 5 to 10 business days (up to 3 weeks if slow) | Confirm receipt, then close old account if desired |
You can check the status of your transfer by logging into both your old and new accounts online, or by calling either custodian. Most institutions can tell you whether the paperwork has been received, whether the funds have been sent, and when they expect the money to arrive. If more than three weeks have passed and the money has not arrived, call your new custodian — they can contact your old custodian to track it down.
Frequently Asked Questions
Can I transfer only part of my IRA to a new custodian?
Yes. On the transfer form, specify the dollar amount you want to move instead of the full balance. The remainder stays at your old custodian. You can split an IRA across multiple institutions if you want, though most people keep it straightforward and transfer everything.
What if my old custodian charges a transfer fee?
Some institutions charge $50 to $150 to process an outgoing transfer. This is legal, though many custodians waive the fee if you ask. You can also ask your new custodian whether they will reimburse the fee as an incentive to move your account there — many do. Check your old custodian's fee schedule before you start the transfer.
Do I have to invest the money right away when it arrives at the new custodian?
No. The money can sit in cash at your new custodian for as long as you want. However, while it is in cash, it is not earning much (usually less than 1% annually). Most people invest it within a few days of arrival, but there is no rule requiring you to do so when ready.
Can I transfer an IRA if I am retired and taking distributions?
Yes. You can transfer an IRA at any age, whether you are still working or already retired. If you are over 73 and subject to required minimum distributions (RMDs), make sure your new custodian knows this so they can calculate and process your RMD correctly. Some custodians handle this automatically; others require you to tell them.
What if I have multiple IRAs at the same custodian?
You can transfer each one separately, or consolidate them into a single IRA at your new custodian. Consolidating is often simpler because you have one account to manage instead of several. Just make sure you are consolidating IRAs of the same type (all Traditional, all Roth, etc.) to avoid unintended tax consequences.