Vanguard Brokered Cds And The Settlement Fund

sharkfeeder | Aug 26, 2022 | 12 posts since 2022

Since I haven't done this before, I'm just trying to understand the logistics before making any moves. If I have an IRA with Vanguard, and a zero balance in the Settlement Fund, I'll need to transfer money from my bank into the Settlement Fund before buying a brokered CD, is that right? I don't want the funds to come from the IRA, obviously. For some reason, it looks like the system will let me go through with the transaction even though there is nothing in the Settlement Fund.

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Answers

Ltssharon | Aug 26, 2022 | 471 posts since 2020

IF the money should probably come from another IRA account at a different institution:. You would not actually touch the money yourself. You would need someone from Vanguard's IRA department to contact the other institution and between them the transactions would be made. They will need just some signatures from you. If you want to deposit fresh IRA money, I don't know. Definitely contact the Vanguard IRA department for help so you don't end up in a tax mess. THere are lots of tax and IRA rules . Perhaps Vanguard was going to have you borrow money from Vanguard (and pay interest) and buy something. Avoid this. Call the Vanguard IRA department specialists. I am sure they will be nice and helpful.

sharkfeeder | Aug 26, 2022 | 12 posts since 2022

@Ltssharon, thanks. I'll probably end up calling them just to be on the safe side. After reading more, I suspect that what I need to do is open another brokerage account that's apart from the IRA account, and buy the brokered CDs through that account. And of course, I'm probably wrong!

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