In a transfer, a 401(k) or IRA custodian or trustee moves the assets in your existing account directly to the custodian or trustee of your new account.
With a transfer, you don't risk failing to deposit the full amount of your withdrawal within the 60-day deadline for rollovers. And, in the case of a transfer from a 401(k) or similar retirement savings plan, nothing is withheld for income taxes.
In contrast, if you handle the rollover yourself, your employer must withhold 20% of the account value.
When securities are sent to a transfer agent for reregistration of the ownership name, this process is also known as a transfer.
Securities may be registered in the actual, or beneficial, owner's name, or in the name of a nominee, known as street name. Most stocks that are held by brokerage firms for their clients are registered in nominee name on the transfer agent's books.
- Browse Related Terms: 403(b) Plan, Central Registration Depository (CRD), Conduit IRA, Funds Receivable, Guaranteed investment contract (GIC), IRA rollover, Plan administrator, Plan provider, Plan sponsor, Rollover, Rollover IRA, transfer
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