Question: My wife and I are transferring our Roth IRA accounts from our current institution to a new one in order to avoid a yearly maintenance fee that has been increasing every year. I'm doing an indirect transfer rather than an institution-to-institution transfer since that took more than 6 weeks last time and I'd like to complete this transaction before year's end.

After selling off the funds, my current Roth IRA institution claims the funds must "settle" for a period of 3 days. Can you please explain to me what this means and if I could demand that they skip this settling and simply send me the distribution check so I can more quickly move it to the new institution? Patrick, Sheboygan, WI

Answer: Despite the wait, it's a savvy move to shift accounts to save on fees. However, the practice of your financial institution is standard. The settlement date for stocks bought and sold on a U.S. exchange and for most mutual funds is typically three business days after the trade was executed. (It used to be the trade date plus 5 days.) It's less for U.S. government securities with the settlement usually the next business day. You can learn a more about settlement dates here.

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