A direct transfer is the movement of IRA funds or assets directly from one IRA custodian to another. Through a direct transfer, the IRA owner never takes possession of their retirement funds or assets. The main advantage of a direct transfer is that no tax liability is reported to the IRS with the distribution. This is because funds are transferred from one institution to another. In most cases, a direct transfer is a simpler option as it avoids having to comply with the 60-day rule and the possibility of incurring taxes and penalties.
Learn more about funding options and estimated timelines at STRATA's Fund Your Account page.