Withdrawal

AAA

DEFINITION of 'Withdrawal'

Removing funds from an account, plan, pension or trust. In some cases, conditions must be met in order to withdraw funds without penalization. There are two ways to withdraw money: in cash or in kind.

INVESTOPEDIA EXPLAINS 'Withdrawal'

Withdrawal can be done over a period of time in fixed or variable amounts or in one lump sum. Penalization for early withdrawal usually arises when a clause in an investment contract is broken. Cash withdrawal requires converting the holdings of an account, plan, pension or trust into cash, usually through a sale. In kind withdrawal is simply taking possession of assets and does not require conversion to cash.

RELATED TERMS
  1. Cleared Funds

    A balance in an account that is able to be withdrawn or used ...
  2. Annuity Factor Method

    A calculation method to determine the amount of eligible withdrawals ...
  3. Christmas Club

    A short-term savings account that usually pays out the full account ...
  4. Liquidation

    1. When a business or firm is terminated or bankrupt, its assets ...
  5. Payment-In-Kind - PIK

    1. The use of a good or service as payment instead of cash. 2. ...
  6. Systematic Withdrawal Plan - SWP

    A service offered by a mutual fund that provides a specific payout ...
Related Articles
  1. Mutual Funds & ETFs

    How can I convert a 401(k) into a Roth 401(k)?

    Investigate how to convert a 401(k) into a Roth 401(k) and compare the two different types of defined contribution pensions commonly available.
  2. Savings

    Stocks: Who Needs Them?! (You, If You Want To Retire)

    Stocks have long been trumpeted as necessary to ensure a comfortable retirement. But does that advice still make sense?
  3. Taxes

    9 Penalty-Free IRA Withdrawals

    If you need to take early distributions, find out which exemptions allow you to avoid expensive consequences.
  4. Options & Futures

    Selecting The Payout On Your Annuity

    Make sure you understand your options for withdrawing your funds from this complex instrument.
  5. Options & Futures

    Demystification Of Bank Accounts

    Find out which type of account suits your specific needs.
  6. Retirement

    I'm an 80 year old making increasing required minimum distribution (RMD) tax payments. I plan to convert ...

    First, some background information: the tax treatment of a Roth IRA distribution depends on whether or not the distribution is qualified. Qualified distributions from Roth IRAs are tax and penalty ...
  7. Retirement

    I withdrew funds from my Roth IRA to contribute elsewhere. How will I be taxed?

    If you close the Roth IRA now and withdraw the balance, you will be taxed on the earnings unless the distribution is qualified. Furthermore, you will pay a 10% early distribution excise tax on ...
  8. Retirement

    How can I get information about my deceased husband's retirement account if his employer withholds it?

    That is unusual. Contact his employer again and if you are not satisfied with the response, ask to speak with a supervisor or senior officer. It is possible that you received incorrect information ...
  9. Savings

    What Canadian banks offer the best savings accounts?

    Learn about different savings accounts in Canada. Explore different interest rates and fees as well as accounts that are protected by the CDIC.
  10. Savings

    What US banks offer the best savings accounts?

    Explore the best savings accounts offered by national banks comparing annual yield and other factors. Learn why the highest-yield accounts are offered online.

You May Also Like

Hot Definitions
  1. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  2. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  3. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  4. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  5. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  6. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
Trading Center