Stock trading question
 

I have some money invested through Vanguard. When I sell a stock it can take as much as a week for it to "settle" and the funds to become liquid for me. Then it takes 3-4 days for this cash to be transferred to my bank. I don't do a lot of trading, but it seems the sale should settle within 24 hours and that the transfer to my bank should take only 24 hours also. Is Vanguard slow in this process or is this normal? What happens to the money in between? Does it go into a pool for Vanguard to squeak out some interest? Any input on this process is appreciated.

I have accounts at Fidelity and can access funds in 48 hours.

Are you talking individual stocks or Vanguard mutual funds?

Just a guess but on stocks I know some places do sales as a batch order. You will sell at the average price over what looks to be a week in your case. Sometimes you get what you pay for at a discount broker and they can do it cheap because that is how they do business. I would never trade stocks under such an arrangement. If I want out I'd want to sell now and not a week from now. You might cost yourself thousands while trying to save $50 on commission.

3 day settlement on stocks would be normal for when you should be able to get cash on your sale.

Individual stocks. Sold some last Thursday. Could not get at the cash until this Wednesday. Not a batch process. Put in a transfer request. Was told 3-4 days. Now we know that is BS.

Seems like what the banks used to do with online bill paying. Take out your money on day one. Put it somewhere so THEY earn interest. Actually pay the bill 5-6 days later. I think they had to stop this.

Damn thieving banking and insurance industries! These people are all going to hell!

Stock trades always have three day funding terms - has to do with delivery of certificates etc. price is based on how the sale is placed- at the market or at a price.

Did you sell during market hours on Thursday or in the evening?

As the poster above said, 3 business days to clear equities is typical. Sat/Sun does not count and getting access on Wednesday sounds like 3 days, not 4/5. If you are trading the the account you may have access to funds to trade more quickly or if you have a margin account. But taking cash out means the brokerage will want confirmation of funds received from the trade. Remember, Vanguard didn't buy the stock from you, they traded it on your behalf.

BTW, I'm no real fan of banks either, so I'm not defending them - it's just the process seems normal and reasonable for equity transactions.

Agree. Some brokerages will float you the $$ to buy something else before the sale closes. You cant withdraw but you can re-invest in another security.