Moving $ to Merrill Edge/BoA for Mortgage Rate Reduction

[FoolStreet]

I need to move a modest chunk of change to Merrill Edge or BoA as a condition for a rate reduction on my refinance. Can you help me think through the best way to do this? I have two options:

1. Transfer a Vanguard acct to Merrill Edge. It has a money market acct for most and a TSM fund for a little.
- I would probably just cash out the MM. For TSM, should I convert it to the equivalent ETF first? or does it matter? I want to avoid a capital gain event and also have the chance to move it back to Vanguard after a while if I choose, or leave it there.

2. Transfer cash to BoA. Since most of the Vanguard acct is money market, then I can easily cash it and send it to BoA. Its a few pennies shy of my transfer goal. As cash, I can easily move it around after a while, if I need.

I think Option #1 is my required option so far, but counting my pennies because #2 is the easiest for me to digest.

[aarondearu]

You can hold Vanguard mutual funds and ETFs at Merrill Edge.

ETF’s will be free to buy/sell and mutual funds cost $19.95.
Automatic reinvestments in mutual funds are free.

If you are going to convert to ETF that needs to be done by Vanguard.
There is no way to convert an ETF back to a mutual fund.

If you want to park money at ME and prefer mutual funds then no problem to transfer mutual funds.

[FoolStreet]

You can hold Vanguard mutual funds and ETFs at Merrill Edge.

ETF’s will be free to buy/sell and mutual funds cost $19.95.
Automatic reinvestments in mutual funds are free.

If you are going to convert to ETF that needs to be done by Vanguard.
There is no way to convert an ETF back to a mutual fund.

If you want to park money at ME and prefer mutual funds then no problem to transfer mutual funds.

Thanks! Is it just as easy to transfer back to Vanguard if I keep them as Funds or ETFs?

Side question, are there any good Ca muni etf funds comparable to the ones at Vanguard?

[aarondearu]

Easy to transfer back to Vanguard.

Not up on CA munis. Maybe iShares CMF? I’m sure if you search there are threads about that.

[SlowMovingInvestor]

If possible, you might want to convert the mutual funds into ETFs at VG before you move. That will take some time, and you may need to convert your Vanguard account into a brokerage account first (if it's a pure MF account now).

One more thing -- I think it takes a while for BoA to upgrade your status -- I think they look at 3 month average. If they've agreed to do it manually after you xfer, that's fine, but you can't rely on their automated status upgrade to work quickly.

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Be sure to get a deposit bonus from merrill when you do it.

https://www.merrilledge.com/offers/me1000

[FoolStreet]

If possible, you might want to convert the mutual funds into ETFs at VG before you move. That will take some time, and you may need to convert your Vanguard account into a brokerage account first (if it's a pure MF account now).

One more thing -- I think it takes a while for BoA to upgrade your status -- I think they look at 3 month average. If they've agreed to do it manually after you xfer, that's fine, but you can't rely on their automated status upgrade to work quickly.

I've been spending time on the Vanguard site and can't see how to convert my Mutual Fund to an ETF without creating a taxable transaction. Can you share what I need to do to make the conversion? Also, any idea how long the conversion takes?

[SlowMovingInvestor]

If possible, you might want to convert the mutual funds into ETFs at VG before you move. That will take some time, and you may need to convert your Vanguard account into a brokerage account first (if it's a pure MF account now).

One more thing -- I think it takes a while for BoA to upgrade your status -- I think they look at 3 month average. If they've agreed to do it manually after you xfer, that's fine, but you can't rely on their automated status upgrade to work quickly.

I've been spending time on the Vanguard site and can't see how to convert my Mutual Fund to an ETF without creating a taxable transaction. Can you share what I need to do to make the conversion? Also, any idea how long the conversion takes?

You need to call them. It typically takes 2-3 days to do the transaction. To be absolutely careful, you should take a dump of MF holdings before you do the conversion, compare with ETF holdings after the conversion and make sure the cost basis has transferred properly.

I did my conversion around 4 years back. If anyone has done a conversion more recently, they might have more up to date information.