With the availability and increased accessibility of internet trading sites, many more people are trying their hand at the stock market. That doesn't mean that they're successful or enjoy it, however, which leads some to want to close eTrade accounts. Can you close one? Why should you? And finally, are there any reasons not to do so?
Why Close an eTrade Account?
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There are several reasons why you might want to close your eTrade account. The most obvious is that you don't use it anymore. If you're not using your eTrade account, closing it isn't just about keeping up with paperwork. It's a safety and security issue.
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An inactive account is a playground for potential fraud. Especially if you've been ignoring emails from eTrade, it wouldn't be difficult for someone to access your account and wreak havoc on your finances before you notice. This rule applies to all inactive accounts. You should minimize the number of financial accounts you open to reduce your risk.
Hopefully, the reason you're not using your eTrade account anymore is that you've found something better. There are several brokerage services available. While others may not be as accessible and user-friendly as eTrade, they might carry lower fees or offer better terms.
Is Closing a Brokerage Account Bad?
It isn't necessarily harmful to close a brokerage account, but you should put some thought into the decision. Indeed, it's not a decision to make in haste. Once again, the best reason to close a brokerage account is that you've found something better. In that case, you don't have to put very much thought into it at all.
You should consider whether you might want or need to re-open the account in the future for any reason. If you think it's a possibility, consider leaving it alone for a while. Just be sure to check in on it regularly and maintain a strong password for your security.
Opening New Brokerage Accounts
As a general rule of thumb, it's essential that you use caution when opening new accounts. For brokerage accounts, explore the firm's or service's terms of use, fees and other conditions. Make sure you want to work with them in the first place. That way, you won't have to go through the hassle of closing the account down the road.
The good news is that opening and closing accounts with companies like eTrade does not have much of an impact on your credit rating. It might make your taxes a bit more complicated at the end of the year, but the effect on your credit is minimal.
How to Close eTrade Accounts
Fortunately, it's relatively easy to close an eTrade account if you decide that's what is best for you. First, you'll need to log in to your eTrade account, either on a computer or using the mobile app. Then, make sure that there's no money or investments in your account. If there is, settle them by transferring funds appropriately.
On the mobile app, go to the message center. On a computer, use the chat feature. Click on Account Services from the menu, and follow the prompts for closing your account. You will need your account number, so have that handy. You'll also need to select or input a reason for closing your account. Be honest; eTrade uses that information to help other users like yourself and improve their services in the future.
Wait for confirmation (usually via email) that your request to close your account was successful. If you don't receive confirmation within 1 to 2 business days, call eTrade's customer service line for additional assistance.
Consider also: How to Set Up E-Trade