Direct deposit/transfer to directly to fund at Vanguard

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Cash
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Direct deposit/transfer to directly to fund at Vanguard

Post by Cash » Wed Sep 11, 2019 6:47 am

I know that one used to be able to send money directly for deposit into a Vanguard mutual fund because each mutual fund position had its own account number. Is that still the case, or would I need to deposit into a general brokerage account first and then purchase the mutual fund?

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RickBoglehead
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Re: Direct deposit/transfer to directly to fund at Vanguard

Post by RickBoglehead » Wed Sep 11, 2019 6:51 am

You actually don't need to deposit at all.

Simply do a purchase using that bank account. Vanguard will pull the funds AND make the purchase at the same time, and they will handle the fact that the funds aren't there yet but the mutual fund purchase has already happened.

Many make the mistake of sending the funds, waiting for Vanguard to get them, then buying. This is not necessary.

I even found on a new bank account that while it would take Vanguard up to 2 weeks for the process (send trial deposits, for you to approve them, and then for Vanguard to do the behind the scenes work to set up the account), they let me make the purchase immediately.
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nix4me
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Re: Direct deposit/transfer to directly to fund at Vanguard

Post by nix4me » Wed Sep 11, 2019 11:04 am

He is asking about direct deposit, not a transfer. Like a payroll deposit. Mine goes into the settlement fund then I I transfer from there.

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Cash
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Re: Direct deposit/transfer to directly to fund at Vanguard

Post by Cash » Wed Sep 11, 2019 5:00 pm

nix4me wrote:
Wed Sep 11, 2019 11:04 am
He is asking about direct deposit, not a transfer. Like a payroll deposit. Mine goes into the settlement fund then I I transfer from there.
Yes, that’s correct. Years ago, I would direct a portion of my paycheck to go directly to a Vanguard mutual fund. But I no longer have an account so don’t know if that’s still possible.

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RickBoglehead
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Re: Direct deposit/transfer to directly to fund at Vanguard

Post by RickBoglehead » Wed Sep 11, 2019 5:15 pm

Cash wrote:
Wed Sep 11, 2019 5:00 pm
nix4me wrote:
Wed Sep 11, 2019 11:04 am
He is asking about direct deposit, not a transfer. Like a payroll deposit. Mine goes into the settlement fund then I I transfer from there.
Yes, that’s correct. Years ago, I would direct a portion of my paycheck to go directly to a Vanguard mutual fund. But I no longer have an account so don’t know if that’s still possible.
Ah. No, you can only deposit it to the settlement account, then you have to setup an automatic investment transaction from your settlement account into the fund(s) you want. So ultimately, the answer is yes. Direct deposit followed by Automatic investment.
Avid user of forums on variety of interests-financial, home brewing, F-150, PHEV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.

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Wiggums
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Re: Direct deposit/transfer to directly to fund at Vanguard

Post by Wiggums » Wed Sep 11, 2019 5:19 pm

That’s what I do.

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