To close a Schwab account, you submit a completed Charles Schwab account closure form through the online Message Center, by mail, or by calling 877-519-1403. Which form you use depends on the account type: a standard closure request for a taxable brokerage account, or the IRA Distribution Form for a retirement account. Schwab processes closures within five business days of receiving the paperwork, and a $50 fee applies only if you transfer the full account to another brokerage instead of closing to cash.
Pick the Right Form for Your Account Type
A taxable brokerage account uses a straightforward account closure request. A traditional, Roth, SEP, or SIMPLE IRA requires the IRA Distribution Form, because money leaving a retirement account triggers federal tax reporting and withholding rules that don’t apply to an ordinary brokerage.1Charles Schwab. Request an IRA Distribution If you’re not sure what you hold, check your most recent statement before you download anything. Grabbing the wrong form is the fastest way to lose a week.
Both forms ask for the same core identifiers: full legal name, Social Security number, and the Schwab account number from your statement or online dashboard. If you hold more than one Schwab account, double-check the number you enter. A single mistyped digit routes the request to the wrong account.
Clear These Loose Ends First
Schwab won’t finalize a closure while the account still has open items. Handle these before you submit.
- Pending trades. Equity trades settle two business days after execution. If a buy or sell is still settling when your form arrives, Schwab holds the account open until it clears.
- Margin balance. Any outstanding margin loan, plus accrued interest, must be zeroed out before closure.2Charles Schwab. Margin Requirements and Interest Rates
- Fractional shares. Positions from Schwab Stock Slices or dividend reinvestment can’t transfer to another brokerage. Schwab liquidates them at market prices and credits the cash to your account.3Charles Schwab. Schwab Stock Slices
- Automatic deposits and contributions. Cancel any recurring transfers or payroll contributions linked to the account so nothing arrives after closure.
Clearing these upfront keeps you on the five-business-day timeline instead of trading messages with Schwab about unresolved items.
Filling Out the IRA Distribution Form
Closing an IRA involves more decisions than closing a taxable account, and the form is divided into numbered sections. Skipping one sends it back.
Distribution Reason (Section 2)
Check exactly one box: new distribution request, Roth conversion, required minimum distribution, or direct rollover to an employer plan. If you’re simply cashing out, choose “new distribution request.” If you’re moving the money to an IRA at a different custodian, a direct rollover or trustee-to-trustee transfer avoids the withholding and 60-day rollover clock entirely.
Federal Tax Withholding (Section 6A)
A lump-sum IRA closure counts as a nonperiodic distribution. Federal law sets the default withholding rate at 10 percent.4Office of the Law Revision Counsel. 26 US Code 3405 – Special Rules for Pensions, Annuities, and Certain Other Deferred Income You can elect anywhere from 0 to 100 percent by writing the rate on the form. For funds sent outside the United States, the minimum is generally 10 percent. Leaving the section blank locks in the 10 percent default, which may not match your actual tax bracket, so pick a number deliberately.
State Tax Withholding (Section 6B)
Some states require withholding on retirement distributions. Without an election, Schwab withholds at the minimum rate for the state of residency on file. You can opt out where permitted or request a specific percentage. Check your state’s rules first: a handful don’t allow a full waiver.
Early Withdrawal Penalty (Section 8)
If you’re under 59½, the taxable portion of the distribution faces a 10 percent additional tax on top of ordinary income tax.5Office of the Law Revision Counsel. 26 USC 72 – Annuities; Certain Proceeds of Endowment and Life Insurance Contracts For SIMPLE IRAs opened within the last two years, the penalty is 25 percent. Exceptions include disability, substantially equal periodic payments, qualified education expenses, and a first home purchase, but you have to genuinely qualify. The penalty is separate from the withholding you elected; withholding is a prepayment toward your tax bill, the penalty is an added cost.
How You Want the Money Delivered
Both forms ask how to send the remaining balance. Options differ in cost and speed.
- Check to your address on file. No fee. Allow a week or more for postal delivery.
- Wire transfer to an external bank. $25 per outgoing domestic wire, or $15 if you initiate it online. Funds arrive same day or next business day.6Charles Schwab. Charles Schwab Pricing Guide for Individual Investors
- Internal transfer to another Schwab account. No fee.
- Direct rollover or trustee-to-trustee transfer (IRA only). Moves retirement funds without triggering withholding or the 60-day clock.7Internal Revenue Service. Rollovers of Retirement Plan and IRA Distributions
If you take a cash distribution from an IRA instead of rolling it over, you have 60 days from receipt to redeposit the money into another IRA and avoid tax on the withdrawal. Miss the window and the full amount becomes taxable income for the year. You get only one such indirect rollover per 12-month period across all your IRAs; trustee-to-trustee transfers don’t count against that limit.7Internal Revenue Service. Rollovers of Retirement Plan and IRA Distributions
RMDs Before You Close a Traditional IRA
If you’re 73 or older and closing a traditional IRA, you must satisfy the year’s required minimum distribution before completing the closure.8Congress.gov. Required Minimum Distribution (RMD) Rules for Original Owners of Retirement Accounts An RMD is not eligible for rollover, so that portion goes to you as taxable income regardless of what happens with the rest of the balance. The IRA Distribution Form has a dedicated RMD checkbox, and you can take the RMD and roll over the remainder on a single submission.
Submitting the Completed Form
Schwab accepts completed forms three ways. The fastest is the Message Center: log in at schwab.com, go to the Message Center under the Service tab, and upload a scanned or photographed copy of the signed form.9Charles Schwab. How to Upload Forms and Documents to Your Account Make sure the images are legible and the signature is visible.
By mail, send the signed form to Charles Schwab & Co., Inc., El Paso Operation Center, P.O. Box 982600, El Paso, TX 79998. Certified mail gives you a tracking number and delivery confirmation, which is worth the small extra cost for financial paperwork. Schwab lists a separate overnight address on its Contact Us page for time-sensitive submissions.
You can also call 877-519-1403 to have a representative walk you through the process or initiate closure over the phone. Calling is the better option if you’re unsure which form applies or if the account has complications like margin debt or equity awards.
Processing Timeline and What Comes After
Schwab processes closures within five business days of receiving the request.10Charles Schwab. Frequently Asked Questions From Clients During that window, the team verifies your identity, confirms trades have settled, deducts any outstanding fees, and prepares the remaining balance for distribution. If anything is missing or unresolved, expect a message before the clock restarts.
Dividends or interest that arrive after the initial transfer are swept up automatically and forwarded to your designated destination. Once the balance actually hits zero, the account status updates to closed, and you receive a final confirmation.
For tax purposes, the closure generates year-end reporting that depends on the account type. A taxable brokerage account produces a Form 1099-B if any securities were sold during the year.11Internal Revenue Service. Instructions for Form 1099-B – Proceeds From Broker and Barter Exchange Transactions An IRA distribution produces a Form 1099-R reporting the gross distribution, taxable amount, and any federal and state taxes withheld.12Internal Revenue Service. Instructions for Forms 1099-R and 5498 (2025) Both forms are mailed the following January and remain available through Schwab’s online portal even after the account is closed.
If You’re Moving to Another Brokerage Instead
If the goal is to move investments to a new broker rather than cash out, you may not need Schwab’s closure form at all. The standard path is ACATS, the Automated Customer Account Transfer Service, and it’s initiated from the receiving firm. You fill out a transfer request with the new broker, that firm submits the ACATS request electronically, and the transfer should complete within six business days once the new firm enters your information.13Securities and Exchange Commission. Transferring Your Brokerage Account – Tips on Avoiding Delays
Schwab charges $50 per account for a full outgoing ACATS transfer. A partial transfer that leaves the account open costs nothing.6Charles Schwab. Charles Schwab Pricing Guide for Individual Investors Only whole shares move through ACATS; fractional shares are liquidated and the cash proceeds follow separately.3Charles Schwab. Schwab Stock Slices Some receiving brokers reimburse transfer fees on request, so ask before you start.