The basic steps to close a Schwab account

You can close a Charles Schwab account by calling their customer service line at 1-800-435-4000, visiting a local Schwab branch in person, or submitting a written request by mail. The phone route is fastest — most closures take 5 to 10 minutes once you're connected to an agent. You'll need to provide your account number and verify your identity, and Schwab will ask whether you want to transfer your holdings elsewhere or have them liquidated and sent to you.

Before you call, make sure your account balance is settled. If you have open positions, pending trades, or unsettled cash, Schwab won't close the account until those clear — this usually takes one to three business days. If you have a margin account with a negative balance (money you owe Schwab), you must pay that off before closure.

Schwab does not charge a fee to close an account. However, if you have mutual funds with surrender charges or stocks you need to liquidate at a loss, those costs are yours to bear.

Key Takeaways

  • Call 1-800-435-4000 to close your account; phone closure is faster than mail and takes about 5 to 10 minutes.
  • Your account must have a zero or positive balance and no pending trades before Schwab will process the closure.
  • Decide before you call whether you want your holdings transferred to another brokerage or liquidated and sent to you as cash.
  • If you have a margin account with borrowed money, you must repay that balance before the account can close.
  • Schwab charges no fee to close an account, but you may owe taxes or surrender fees on positions you liquidate.

What happens to your money and investments when you close

When you close a Schwab account, you have two main options for what happens to your holdings. You can request a transfer to another brokerage — Schwab will initiate an Automated Customer Account Transfer Service (ACAT) transfer, which moves your securities and cash to your new broker. This process typically takes 5 to 10 business days and preserves your positions as they are. Alternatively, you can ask Schwab to liquidate everything and send you the proceeds as a check or electronic transfer.

If you choose liquidation, Schwab will sell all your stocks, bonds, mutual funds, and other holdings at market price. This can trigger capital gains taxes if your securities have increased in value since you bought them. You are responsible for reporting those gains to the IRS; Schwab will send you a 1099 form for tax year reporting. If you have significant unrealized gains, consider consulting a tax professional before you liquidate.

Cash in your account (including money market funds) transfers or arrives as-is. If you have a Schwab debit card linked to your account, that card will stop working once the account closes.

Transferring your account to another brokerage instead of closing

If you're moving to a different brokerage but want to keep your investments intact, you don't have to close your Schwab account first. Instead, contact your new broker and ask them to initiate an ACAT transfer. Your new broker will handle the paperwork and coordinate with Schwab to move your holdings. This is often simpler than closing and reopening elsewhere, because you avoid the step of liquidating and repurchasing positions.

Some brokerages offer transfer incentives — cash bonuses or fee reimbursement if you move a certain amount. Check whether your new broker has such an offer before you start the transfer. The ACAT process is free, and Schwab will not charge you to send your assets out.

One thing to note: if you have a Schwab IRA, 401(k), or other retirement account, the transfer rules are stricter. Retirement accounts cannot be transferred via ACAT in the same way regular brokerage accounts can. You'll need to work with both Schwab and your new broker to set up a proper rollover or transfer, which may involve different paperwork and timing.

Closing a joint account or account with a power of attorney

If your account is held jointly with another person, both account holders typically must consent to closure. Schwab may require both of you to sign a closure request or both to be present on a phone call. If one joint owner wants to close and the other does not, you may need to remove one owner first, which requires both signatures anyway.

If someone else has power of attorney over your account, that person can usually request closure on your behalf, but Schwab will verify the power of attorney document. If you are the account holder and someone with power of attorney is trying to close your account without your knowledge, contact Schwab immediately to report it.

What to do if you have pending transactions or unsettled trades

Schwab will not close an account while trades are settling or cash is pending. If you've recently bought or sold securities, those trades typically settle in two business days. If you've made a deposit, it may take one to three business days to clear. Wait for all transactions to complete before you request closure, or Schwab will ask you to call back later.

If you have a standing order to buy or sell securities, cancel those orders before you close. Schwab may also ask you to close any open options positions or pending limit orders. Check your account for any recurring transfers, automatic investments, or scheduled bill payments — these must be stopped before closure.

Closing a retirement account at Schwab

Closing an IRA, Roth IRA, SEP-IRA, or other retirement account at Schwab follows different rules than closing a regular brokerage account. You can still call 1-800-435-4000, but Schwab will walk you through withdrawal or rollover options. If you're under 59½ and withdraw from a traditional IRA, you may owe income tax plus a 10 percent early withdrawal penalty — Schwab will explain this before processing.

If you want to move your retirement account to another institution, a direct trustee-to-trustee transfer is usually the best route. This avoids the 60-day rollover window and potential tax withholding. Your new institution can initiate this transfer, or you can ask Schwab to send your assets directly to the new trustee. Schwab does not charge for this service.

Keeping your Schwab account open but inactive

If you're not sure whether you want to close permanently, you can simply stop using your account. Schwab does not charge inactivity fees, so your account can sit dormant indefinitely. You can reopen it later by logging in or calling customer service. This is useful if you think you might return to active trading or want to keep the account for occasional use.

However, if your account has been inactive for an extended period and you have a very small balance, Schwab may eventually close it and send you the remaining funds. This is rare, but it can happen. If you want to preserve the account, log in at least once per year or contact Schwab to confirm the account is still active.

Frequently Asked Questions

How long does it take Schwab to close my account after I request it?

If your account is settled and ready, Schwab typically closes it within one to five business days after you request closure. If you're transferring holdings to another brokerage, the ACAT transfer itself takes 5 to 10 business days. If you're liquidating, the sale of securities happens immediately, but the cash may take a few days to reach you depending on your bank.

Will I owe taxes when I close my Schwab account?

You may owe capital gains taxes if you liquidate securities that have increased in value. Schwab will send you a 1099 form showing your gains and losses. If you transfer your account to another brokerage instead of liquidating, you won't trigger taxes at that time. Retirement account withdrawals may also trigger income tax and penalties depending on your age and account type.

Can I close my account online?

Schwab does not offer account closure through their website or mobile app. You must call 1-800-435-4000, visit a branch in person, or send a written request by mail. Phone is the fastest method.

What if I have a negative balance or owe Schwab money?

You must pay off any negative balance (borrowed money on a margin account) before Schwab will close your account. If you owe money, call customer service and ask about payment options. Once the balance is zero or positive, you can proceed with closure.

Can I reopen a closed Schwab account?

Once an account is closed, you cannot reopen it. If you want to trade with Schwab again, you'll need to open a new account. The process is straightforward and takes about 10 minutes online, but your account number and history will be different.