Can I place a purchase order w/ Vanguard and THEN xfer the money?

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ReadytoLearn
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Joined: Tue Oct 08, 2013 8:35 pm

Can I place a purchase order w/ Vanguard and THEN xfer the money?

Post by ReadytoLearn »

I asked this question of Vanguard over secure message, but I forgot part of my question, so I'll as here as well in case anyone has personal knowledge.

When I'd like to purchase an ETF from cash, do I need that cash in my settlement fund at the very second I'm doing the deed? It doesn't ~seem~ like it so long as I tell Vanguard that the $ is coming from my linked money market. It looked like there was a drop down where I could select my money market, but of course I didn't go all the way through with the purchase. Can anyone confirm? I'd rather leave the money in my MM gaining much better interest until I really would like to place the trade instead of keeping it in my settlement fund at Vanguard.

The question I forgot to ask, is there a $ transfer limit on either the bank or Vanguard side? I've been able to do $250k in the past, but I'd like to know if someone has done higher or if they know of an upper limit. I realize if there is a limit on my bank's side, that is unique to my bank. Thx.
bloom2708
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Re: Can I place a purchase order w/ Vanguard and THEN xfer the money?

Post by bloom2708 »

To purchase an ETF you need money or proceeeds (previous sale) or credit (margin) in your settlement fund to purchase.

To purchase a Mutual Fund at Vanguard, you can do the transfer as part of the buy transaction.
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aristotelian
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Re: Can I place a purchase order w/ Vanguard and THEN xfer the money?

Post by aristotelian »

I can buy ETFs instantly. I first place an order to buy the settlement fund. The funds show as available to trade and I buy the ETF. A couple days later the funds transfer and settle.
sixty40
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Re: Can I place a purchase order w/ Vanguard and THEN xfer the money?

Post by sixty40 »

As far as I know you do not need any money in your settlement acct to trade equities and ETFs. I have bought stocks or ETFs which exceeded the settlement acct balance, after the purchase the settlement was negative. I then would either sell something to get it back to positive or transfer money from MM acct, but all within VG, never from another institution. You just have to have adequate funds in your settlement acct at the settlement date to cover the trade. I have never cut it that close, usually the get the funds there the same day.
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Cubicle
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Re: Can I place a purchase order w/ Vanguard and THEN xfer the money?

Post by Cubicle »

When I don't have enough funds in my settlement account, the last buy confirmation screen says (paraphrasing):

"This transaction exceeds your balance limit. Funds are due in your account prior to the trade settlement date. Otherwise we may be forced to liquidate holdings in your account to cover these costs."

I think ETFs take ~3 days to settle, but don't quote me on that.

Mutual funds, as far as I know, settle after the market closes, so the funds need to be in your account at the time of trade, or you need to schedule a transfer to cover the costs.
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