Best Automated Customer Account Transfer Service Brokers 2023
The Automated Customer Account Transfer Service (ACATS) is a system designed to standardize and automate the transfer of assets from one brokerage account to another on behalf of a trader who wishes to make the switch. Not only does this offer increased convenience to the trader but it also improves transaction speeds and enhances security.
This article will cover how ACATS works, which securities are eligible for it, and the pros and cons of using it. We have also listed the top ACATS brokers in 2023.
These are the 4 best brokers that accept Automated Customer Account Transfer Service deposits and withdrawals:
#1 - Interactive Brokers
Interactive Brokers is a leading global brokerage that provides access to a comprehensive offering of stocks as well as forex, futures, metals, bonds and cryptos. The firm has over 40 years experience in the online trading industry and is heavily regulated by SEC, FCA, IIROC, and SFC. Day traders can use the proprietary Trader Workstation and can access powerful tools and data feeds as well as comprehensive educational resources.
"Experienced day traders seeking a regulated broker with sophisticated trading software and very low fees should look at IB. Their range of stocks also can't be beaten."- DayTrading Review Team
- Instruments: CFD, Forex, Stocks, Crypto, Futures, Options, Commodities
- Regulator: SEC, FCA, IIROC, SFC
- Platforms: AlgoTrader, OmniTrader, eSignal, TradingCentral
- Min. Deposit: $0
- Min. Trade: $100
- Leverage: 1:50
- Low commissions and tight spreads
- You have a reliable real-time market data feed, that rarely goes offline
- Proprietary Trader Workstation comes with powerful tools and charting capabilities
- The TWS platform falls short in terms of technical charting
- Platform and web interface are complex and difficult for beginners to pick up
- Mediocre customer support
#2 - Webull
Webull is a US-regulated trading app that offers stocks, options, forex, cryptos, ETFs, fractional shares and more. The firm is authorized by the SEC and FINRA with a strong trust rating. Low fees, no minimum investment and generous welcome bonuses have made the discount broker popular with online investors.
"Webull is best for traders looking to buy and sell stocks on a user-friendly platform with zero commissions. The intuitive app also makes this broker great for mobile investors."- DayTrading Review Team
- Instruments: Stocks, ETFs, ADRs, OTCs, options, cryptos, forex, fractional shares
- Regulator: SEC, FINRA
- Platforms: Desktop App, Web Terminal
- Min. Deposit: $0
- Min. Trade: 0.00001 (Fractional Share)
- Leverage: 1:4
- No minimum deposit for beginners
- Smart Advisor for auto investing
- Brokerage account plus IRA
- High deposit and withdrawal wire fees for non-US residents
- Narrow range of payment methods
- Sometimes sudden changes in trading conditions
#3 - M1 Finance
M1 Finance is a US brokerage that allows users to build a customizable investment portfolio from a range of 6000+ stocks and shares, ETFs and cryptocurrencies. The innovative 'pie' based portfolio management system allows traders to build several portfolios with different aims, and the brokerage supports machine-learning tools that can provide automated portfolio management.
"US investors who want a straightforward, commission-free way to invest in stocks and crypto with AI-powered strategy support should consider M1 Finance."- DayTrading Review Team
- Instruments: Stocks, ETFs, OTC stocks
- Regulator: SEC, FINRA
- Platforms: Own
- Min. Deposit: $100
- Min. Trade: $1
- Make your own ETF by customizing your pie
- A clean dashboard that illustrates the current composition of your portfolio
- Follow more than 60 expert portfolios
- You cannot consolidate external accounts for planning purposes
- Only available in the US – eToro is a top alternative for the UK market
- The way trades are placed puts transaction timing out of your control
#4 - Firstrade
Firstrade is a US-headquartered discount broker-dealer with authorization from the SEC. The company is also a member of FINRA/SIPC. With welcome bonuses, powerful tools and apps, plus commission-free trading, Firstrade Securities is a popular online brokerage. It is also quick and easy to open a new account.
"We recommend Firstrade for beginner investors looking to trade US stocks with no commissions. There is a wealth of free education plus premium-quality research and trading ideas from Morningstar, Briefing.com, Zacks and Benzinga."- DayTrading Review Team
- Instruments: Stocks, ETFs, Options, Mutual Funds, Bonds, Cryptos, Fixed
- Regulator: SEC, FINRA
- Platforms: Own
- Min. Deposit: $0
- Min. Trade: $1
- Stop limit and trailing stop orders supported
- Low OTC fees
- Mobile app with advanced features and analysis
- No 24/7 customer support
- Some withdrawal fees
- No copy trading
What Is The Automated Customer Account Transfer Service?
The Automated Customer Account Transfer Service allows for the movement of securities between two trading accounts registered with a different broker or bank. The National Securities Clearing Corporation developed it in place of the former manual system for ease and convenience as well as better accuracy.
For the ACATS system to work, the investor must sign paperwork that confirms that the account is going to be moved. When the receiving broker has said documents, they make a formal request for the account and this is received by the firm that currently has it. At this point, the account can be transferred over and the exact holdings are moved to the receiving broker, which typically takes between three and six working days.
The ACATS is particularly convenient given that the transfer also retains the same value as it had in the previous account. This means that if you move shares of stock, the purchase price stays consistent even after it has been transferred to the new brokerage. Therefore as a trader, you do not need to purchase the same assets twice to maintain a holding with a new firm.
Brokers that accept ACATS deposits facilitate the movement of stocks, bonds, cash, unit trusts, mutual funds, options, and more.
How ACATS Brokers Work
The ACATS switch works using the following process:
- ACATS transfer is initiated by the trader who wishes to transfer assets to another firm, such as an online brokerage
- A Transfer Information record is submitted to the firm that the trader wishes to move assets over to. A control number is placed on the transfer and output will be sent to both parties. The record shows the information that the receiving broker needs to request the correct asset transfer.
- The trader’s current brokerage must respond to the request within one business day either by confirming the transfer or rejecting it. If they do not respond, ACATS will add the transfer information to a report given to FINRA.
- A review period begins, and the assets that are going to be transferred are reviewed and confirmed. The review period can last for one business day and the current broker can modify the asset list during this time. When a modification occurs, more time is added to the review period.
- The assets are moved to the new broker and the account re-opens with the new firm.
Which Securities Can Be Used in ACATS?
- Exchange traded funds (ETFs)
- Certificates of deposit from NSCC banks
- All publicly traded stocks, including cash, bonds, and mutual funds
- Taxable accounts, individual retirement accounts, trusts, brokerage 401ks, and other account types.
However, some securities are ineligible for the Automated Customer Account Transfer Service:
- OTC funds
- Unlisted shares
- Proprietary investments and alternative investments
Some ACATS brokers charge customers a fee to move their holdings over to another brokerage which is typically between $50 and $100 per asset transfer. JP Morgan Chase for example charges $75, but it can be more.
These fees are charged to deter traders from moving their assets elsewhere by making it costly, so traders should check whether these fees apply with their current broker before initiating the transfer. Many ACATS brokers do not ask for an out fee at all, such as Citibank.
Aside from the potential out fee, there are no other charges for the Automated Customer Account Transfer Service. There are also some cases in which the broker you transfer to will offer a reimbursement of the out fee as an incentive to transfer your assets to their firm. For example, if you transfer assets from JP Morgan Chase to TD Ameritrade, TD Ameritrade will reimburse up to $125 of the ACAT fee.
The average speed for ACATS transfers is 3-6 working days, with some firms citing 4-7 days, or 4-8 days, although this time can increase depending on modifications taking place between two parties.
As a rule, Automated Customer Account Transfer Service deposits should not take longer than 10 days from beginning to end.
Although the process is several days long, it is far faster than a manual transfer process which can take up to 1 month.
ACATS Vs Non-ACATS
The outcome of a manual transfer compared to an ACATS is the same; the only difference is the method by which the transfer happens and the time that it takes for it to be completed.
When the process is completed manually, it can take over 1 month for the assets to be transferred over to the new broker, whereas with the automatic process it takes only 3-6 working days to be completed.
There is also far less space for human error which can prolong the process even further at some brokers that accept ACATS deposits.
Pros Of ACATS Brokers
- Maintain Same Holdings – You do not need to liquidate your positions and repurchase them at a new broker, the purchase price will stay the same when the shares are transferred over.
- Easy Departure – You do not need to let your current brokerage know if you are unhappy with their services, ACATS will take care of the process for you through the new broker.
- FINRA Compliance – ACATS ensures that both parties are complying with the Financial Industry Regulatory Authority requirements when transferring assets.
- Cost-Effective – The automated element of ACATS cuts down on costs for traders.
Cons Of ACATS Brokers
- Fees – Brokers that accept ACATS deposits can charge high fees for the transfer of accounts to another firm, up to $100 or more. Traders should keep this in mind and ensure that the transfer is going to be worthwhile if they are to pay the fee to carry it out. Not all ACATS brokers charge this fee, so traders should check this too.
- Transfer Not Guaranteed – The purpose of ACATS is to transfer securities from one broker account to another, but it is worth keeping in mind that the transfer of accounts is never guaranteed. If either side of the transaction is in transfer defaults then the transfer may not occur.
Is The ACATS A Good Choice For Traders?
The Automated Customer Account Transfer Service provides an important tool for quickly and easily moving assets from one account to another, by automating and standardizing the procedure. Therefore it is not a payment solution in and of itself but a means of using a new broker or firm without liquidating your current assets and also without having to interact with your current brokerage.
Head to our list of the top brokers that accept ACATS deposits to get started.
How Do Deposits To ACATS Brokers Work?
ACATS is the process of transferring assets from one broker or firm to another, which is done on behalf of the trader but at their request. The new brokerage contacts the current one and requests the transfer of assets to occur, detailing the exact holdings that are to be moved.
How Long Do ACATS Switches Between Brokers Take?
Typically, transfers take between 3 and 6 working days. Brokers that accept Automated Customer Account Transfer Service deposits usually publish payment timelines on their official website.
Which Securities Are Eligible For ACATS Payments?
Publicly traded stocks, exchange-traded funds, certificates of deposit from NSCC banks, taxable accounts, individual retirement accounts, trusts, brokerage 401ks, and other account types are all eligible at ACATS brokers.
Which Securities Aren’t Eligible For ACATS To Trading Brokers?
Several securities are not eligible for ACATS, such as annuities, proprietary investments, alternative investments, OTC funds, and unlisted shares.
Who Initiates An ACATS Switch Between Brokers?
An ACATS deposit is first requested by the trader who wishes to shift their assets to a new broker. They contact the new brokerage, who then requests the transfer from the current broker that is holding them.