HighDimension wrote: Mon Sep 29, 2025 6:38 pm
Hello,This forum was incredibly helpful when I needed assistance a few months ago so I wanted to highlight an issue that I’m having with my Vanguard account and see if others were able to get a better resolution than I have been able to get so far.
I opened a new brokerage account in June 2025 with the hopes of consolidating a bunch of random savings accounts into one account invested in VUSXX. I knew that I would occasionally need to transfer money back to my main account (no more than once a month) and believed that this could be easily done online. I linked all of my external accounts to Vanguard and transferred everything in.
Three months in, I attempted to do my first transfer back to my external bank account. I tried to sell shares and send the proceeds directly to the external account and also sell shares and transfer the funds from the settlement account to the external account. Both attempts were denied due to the funds being recently deposited. Here is the actual error:
This transaction cannot be completed.The shares you’re trying to redeem were recently purchased. To protect your account, we can send the proceeds from the sale of those shares only to the institution and account from which they originated.
To complete this transaction, you can choose to send the proceeds to the originating institution and account.
If you purchased the shares by check, or if you have questions about this transaction, contact us for assistance.
After three calls, I was informed that for the first year of the account, I would only be able to use the website to transfer the funds back to the original account after a 60 day holding period expired. This seemed excessive but I was willing to work with this because I had already passed the 60 day holding period for a large portion of my investments. Unfortunately during my last conversation with a Vanguard manager I discovered that because I had linked multiple bank accounts, there is no way for the system to determine which funds originated from each external account. This means that I won’t be able to transfer funds using the Vanguard website until the account is one year old (June 2026).
I found another thread that spoke of a similar issue and it sounds like the only option (aside from closing the account) is to wait for a year to pass. Has anyone been able to successfully fight this? I think I would have gone with a different company had I known this restriction existed. I don’t have enough money in there to make a difference to Vanguard, but this has been an incredibly frustrating process and I don’t know that I want to continue using their phone system to process all trades for the next nine months. I’ve had an IRA with Vanguard for over 10 years and assumed that would alleviate some of the growing pains associated with a new account but it hasn’t turned out that way.
Not that it matters, but is there a way to get this feedback to someone that might care or be able to address the underlying issue with their system?
-HD
I feel your pain. Some of my Vanguard accounts have been open since 2013 and others since 2022. Here is what I wrote Vanguard today and hope it helps you: Dear Vanguard:
“Vanguard is primarily governed by U.S. federal securities laws, including the Investment Company Act of 1940, which is overseen by the Securities and Exchange Commission (SEC). Vanguard also adheres to regulations from the Internal Revenue Service (IRS) and the Federal Reserve Board, along with various state laws, particularly those of Pennsylvania, where its headquarters are located. Its operations and client services must also comply with laws related to data privacy and financial operations, such as the Gramm-Leach-Bliley Act and the Sarbanes-Oxley Act.”
(from Google AI:) Is a rollover the same as a cash deposit? A rollover is not the same as a cash deposit. A rollover involves transferring funds from one retirement account to another, often within a specific time frame, to avoid taxes and penalties. This process is typically used to move funds from a 401(k) or other retirement plan into an IRA. In contrast, a cash deposit is a direct transfer of funds from one account to another, which may not be subject to tax withholding and can be done at any time.
Vanguard says: “Your account may be subject to various restrictions to reduce the risk of fraud. Your transactions may be subject to a 7-day holding period as well as daily transaction limits. Generally, new accounts and all checks will be subject to a 60-day holding period for cash deposits. During this time, you can invest with this cash, but deposits into your account may only be returned to the bank account from which the cash was withdrawn. After the holding period is complete, your funds will be fully available to transfer or withdraw.”
Dear Vanguard:
I spoke with someone by phone today. I think your actions may be in violation of the federal securities laws.
I understand there is a 7day holding period on certain transactions. That seems relatively reasonable.
However by phone today I was told that my account(s) are on a 60 to 30 day restriction on funds deposited. I was never sent any written notice to that effect. I was not able to ascertain that does this 60 day period apply to all my accounts or just the Roth Rollover account. I note from the Vanguard record, May 29, 2025 rollover to brokerage 2386 $$2050, June 6 rolled over to the same account of $1600, June 25 rollover of $1000, September 26 cash transferred to account 2829 about $130. I believe the September 26 transaction was based on money from one of the other accounts that had already been subject to the seven day holding period. But I do know that the $130 in my belief was not cash, but he rolled over amount. In fact, all the amount stated are rolled over amounts. Your rule states “Generally, new accounts and all checks will be subject to a 60-day holding period for cash deposits.” I assume that statement applies to new accounts and checks deposited into new accounts as cash deposits; my accounts should not be categorized under the 60 day rule because none of my account transactions are for “new accounts.” In addition, a “rollover” transaction is not the same as a cash deposit. Your company incorrectly classified my rollover transactions as cash deposits, and they should not have been placed on 30-60 day restriction. I tried to explain this over the phone after numerous transfers; it is extremely unfortunate your company does not have a publicly accessible email address.
The $130 cash transfer for example had already been restricted to the 7 day period on the initial rollover; then you subjected me to an additional 7 day restriction after the money was transferred into the savings account. This is a questionable business practice. That transaction started September 11and was not processed until 9/26/ 2025. Unbelievable as a I said since it was a rollover transaction, not a cash transaction. Incredibly, as the money clears the next business day, the phone agent wanted to call the 401k company and verify the transaction. A transaction electronic that should have posted the next business day. Utterly ridiculous.
