How to Close a Dividend Account

Closing a dividend account involves specific actions to transfer or liquidate assets and finalize administrative details. These accounts hold investments that generate dividends, and a clear understanding of the process ensures accuracy.

Gathering Essential Information

Before initiating closure, collect all relevant information and documentation. You will need your full account number(s), found on recent statements or within the online portal.

Personal identification, such as your Social Security Number or Taxpayer Identification Number, driver’s license, or passport, is required for verification. Provide accurate contact information, including your mailing address, phone number, and email, for communications and final statements. If applicable, have beneficiary information ready. Recent account statements are useful for checking balances and transaction history.

If transferring assets to another financial institution, you will need the receiving account’s details. This includes the bank account number and routing number for cash transfers, or the brokerage account number and the firm’s Depository Trust Company (DTC) number for in-kind transfers of securities.

Identifying Your Account and Institution

Identify your dividend account type and the managing institution, as this determines the closure procedure. Dividend accounts exist in several forms, each managed by different entities. Brokerage accounts are held with traditional or online brokerage firms.

Direct Stock Purchase Plans (DSPPs) or Dividend Reinvestment Plans (DRIPs) are managed directly by a transfer agent, such as Computershare or Equiniti. Mutual funds and Exchange Traded Funds (ETFs) can be held directly with the fund company or through a brokerage account.

To identify the correct institution, refer to recent account statements, online portals, or the investor relations section of the company whose stock you hold. Once identified, locate their customer service number, investor relations contact, or online help center to request closure forms and instructions.

Executing the Closure Request

After gathering information and identifying the institution, request account closure. Contact the institution via phone, secure online portals, mail, or in-person. Online or phone requests are efficient, though mailed forms may be required for final submission.

Obtain closure forms from the institution. These forms are available for download from their website, by mail, or directly within an online portal.

Complete all required fields using your gathered information, including identity confirmation, account numbers, and asset disposition. Review forms for accuracy before submission, as errors can cause delays. Some institutions may require a Medallion Signature Guarantee or notarization for certain transactions.

Submission methods vary, from mailing physical forms to uploading scanned documents or electronic submissions. After submitting, you should receive a confirmation number or email receipt that your request has been received.

Addressing Remaining Dividends and Assets

Understand how outstanding dividends and underlying assets are handled during and after closure. Any dividends declared but not yet paid before final closure will be disbursed to you. These pending dividends are paid as cash to a linked bank account or sent via check, depending on your instructions or the institution’s policy.

For underlying shares or other investment assets, you have several disposition options. You can transfer shares in-kind to another brokerage account, moving securities without selling them. This requires the receiving brokerage account number and the firm’s DTC number. Alternatively, sell all shares and receive cash proceeds transferred to your designated bank account.

Consider the tax implications of asset disposition; selling shares can trigger capital gains or losses, reported on IRS Form 1099-B. Transferring shares in-kind does not create an immediate taxable event, but the original cost basis transfers to the new account.

Institutions may charge fees for selling assets, transferring securities, or closing an account, such as a termination or transfer-out fee. These fees are deducted from the account balance or proceeds before final disbursement.

Verifying Account Closure

After submitting the closure request and addressing asset disposition, confirm the account has been closed. Expect a final statement marked “closed” or a confirmation notice via mail, email, or your online account portal.

The timeline for account closure varies depending on asset complexity and internal processes. Allow expected processing time before follow-up. If you do not receive confirmation within a reasonable timeframe, contact the institution’s customer service.

Maintain thorough records for future reference and tax purposes. Keep copies of all submitted closure forms, confirmation emails or letters, and final account statements showing a zero balance and closed status. Monitor your bank account or new brokerage account statements to ensure correct transfers and no unexpected activity.