The two ways to move an IRA and which one to use

You can move an IRA to another bank in two ways: a direct transfer (also called a trustee-to-trustee transfer) or a rollover. A direct transfer is almost always the better choice because the money never touches your hands, so there is no tax withholding and no risk of missing the 60-day deadline that applies to rollovers.

In a direct transfer, your current IRA custodian (the bank or brokerage holding your account) sends the money straight to the new custodian. The process takes 5 to 10 business days on average, though some institutions move faster. You fill out a form at the new bank, they contact your old bank, and the old bank sends the funds. You do not report anything extra on your taxes.

A rollover means you withdraw the money yourself and deposit it at the new bank within 60 calendar days. The IRS withholds 20 percent for federal taxes on the withdrawal, so you have to make up that 20 percent from your own pocket if you want to deposit the full amount. You also get only one rollover per IRA per year, and the 60-day clock is strict—miss it and the withdrawal counts as a taxable distribution. Use a rollover only if you have a specific reason: some custodians will not do direct transfers, or you need access to the cash temporarily.

Key Takeaways

  • A direct transfer sends money from your old IRA custodian straight to the new one with no tax withholding or 60-day deadline risk.
  • Start the process at the new bank by filling out their transfer form; they will contact your old custodian on your behalf.
  • The transfer usually takes 5 to 10 business days, though you should confirm the timeline with both institutions.
  • If you withdraw the money yourself instead, the IRS withholds 20 percent and you have exactly 60 calendar days to redeposit it or face taxes and penalties.
  • You can transfer between any IRA types (Traditional to Traditional, Roth to Roth) without tax consequences, but converting between types (Traditional to Roth) is a taxable event.

Step-by-step: doing a direct transfer

Start at the new bank. Call their IRA department or log into their website and look for "transfer" or "move your IRA here." They will give you a form—usually called an IRA Transfer Request or similar. Fill in your name, Social Security number, the type of IRA you are moving (Traditional, Roth, SEP, or SIMPLE), and your current custodian's name and address.

You will also need your account number at the old bank. If you do not have it handy, call your current custodian and ask for it. Some new banks will ask you to sign the form in front of a notary; others do not. Ask before you sign anything.

Submit the completed form to the new bank. They will send it to your old custodian and follow up if needed. Your old bank will then initiate the transfer. Some custodians charge a fee for outgoing transfers—typically $25 to $100—which they may deduct from your account before sending the money. Ask your old bank about this before you start; if they charge, the new bank may reimburse the fee, so ask them too.

Check your new account after 5 to 10 business days. The money should appear as a deposit labeled "IRA Transfer" or similar. If it does not arrive within two weeks, contact the new bank's transfer department and ask them to track it down. They can contact your old custodian and find out where the money is.

What happens if you do a rollover instead

If you withdraw the money yourself, you must redeposit it within 60 calendar days or the IRS treats it as a taxable distribution. The 60 days start on the day you receive the check, not the day you request the withdrawal.

When you withdraw, your custodian withholds 20 percent for federal income tax. If your IRA holds $50,000, you receive a check for $40,000 and the bank sends $10,000 to the IRS. To avoid a tax bill later, you need to deposit the full $50,000 at the new bank within 60 days—meaning you have to cover the $10,000 withholding from your own money. If you deposit only the $40,000 you received, the $10,000 difference counts as a taxable distribution, and you owe income tax on it plus a 10 percent early withdrawal penalty if you are under 59½.

You also get only one rollover per IRA per year, measured from the date of the first withdrawal. If you do two rollovers in the same calendar year, the second one is taxable. This rule applies across all your IRAs combined, so if you have three IRAs and roll one over, you cannot roll over another one for 12 months.

Transferring between different IRA types

You can move money between the same type of IRA—Traditional to Traditional, Roth to Roth, SEP to SEP—with no tax consequences. A direct transfer between matching types is always tax-free.

Converting from Traditional to Roth is different. This is a taxable event, meaning you owe income tax on the amount you convert in that tax year. The IRS does not treat it as a transfer; it is a conversion. You report it on Form 8606 when you file taxes. If you want to convert a Traditional IRA to a Roth, you can do it through a direct transfer, but you will owe taxes on the conversion amount. There is no 60-day limit on conversions the way there is on rollovers, but the tax bill is immediate.

Converting from Roth to Traditional is rare and usually not allowed by custodians, because Roth contributions have already been taxed. Check with both your old and new bank before assuming you can do this.

Timing and what to expect

A direct transfer typically takes 5 to 10 business days from the time your old custodian receives the request. Some banks move faster—2 to 3 days—and some take longer, especially if the old custodian is slow to respond. Weekends and holidays do not count as business days.

During the transfer, your money is in transit and you cannot access it. If you need the money before the transfer completes, you will have to cancel the transfer and withdraw it yourself (which triggers the 60-day rollover rules). Plan ahead if you know you will need cash soon.

Once the money arrives at the new bank, it is yours to invest or leave in cash, depending on what the new account offers. The new custodian will send you a confirmation statement showing the deposit. Keep this for your records.

Common problems and how to fix them

The most common delay is a mismatch between the account name at the old bank and the new bank. If you go by a nickname or your name changed, make sure both custodians have the exact same legal name on file. If the names do not match, the old bank may reject the transfer. Call both banks and have them verify the name before you submit the form.

Another issue is an old custodian that refuses to do direct transfers or moves very slowly. Some smaller banks or older brokerage systems have outdated transfer processes. If your old bank is dragging its feet after two weeks, ask to speak to a supervisor and request a written timeline. If they still will not cooperate, you have the right to do a rollover instead, though you will deal with the 20 percent withholding.

If you are moving an IRA that holds investments (stocks, mutual funds, bonds), the old custodian may liquidate them and send cash, or they may transfer the investments themselves. Ask your old bank which they do before you start. If they liquidate, you will have cash at the new bank and will need to reinvest it. If they transfer the investments, you will have the same holdings at the new bank, which avoids selling and rebuying.

Frequently Asked Questions

Can I transfer an IRA if I still owe taxes on it?

Yes. Owing back taxes does not stop you from transferring an IRA. However, the IRS can place a levy on your IRA if you owe federal taxes, which means they can seize part of it to pay what you owe. Contact the IRS before you transfer if you know you have an outstanding tax debt. A direct transfer does not change your tax liability.

What if my old bank charges a transfer fee?

Ask your old bank how much they charge before you start. Typical fees are $25 to $100. Some new banks will reimburse this fee as an incentive to move your account, so ask the new bank too. If neither reimburses it, the fee comes out of your IRA balance, which means slightly less money ends up at the new bank.

Do I have to move the whole IRA or can I transfer just part of it?

You can transfer part of an IRA. On the transfer form, specify the dollar amount you want to move. The rest stays at your old bank. This is useful if you want to keep some money with your current custodian and move the rest elsewhere.

How long do I have to complete the transfer before it counts as a withdrawal?

A direct transfer has no time limit—the money moves at the custodians' pace, usually 5 to 10 business days. If you do a rollover (withdraw the money yourself), you have exactly 60 calendar days to redeposit it. The 60 days start when you receive the check, not when you request the withdrawal.

Can I transfer an IRA if I am retired and taking distributions?

Yes. You can transfer an IRA at any age. If you are already taking required minimum distributions (RMDs), the transfer does not change your RMD obligation. You still owe the IRS the full RMD amount that year, whether the money is at the old bank or the new one. Ask both custodians how they handle RMDs during a transfer so you do not accidentally miss a payment.