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    A balance in an account that is able to be withdrawn or used ...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. Systematic Withdrawal Plan - SWP

    A service offered by a mutual fund that provides a specific payout ...
  4. Distribution In Kind

    A payment made in the form of securities or other property, rather ...
  5. Liquidation

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

    1. The use of a good or service as payment instead of cash. ...
RELATED FAQS
  1. How can I convert a 401(k) into a Roth 401(k)?

    A traditional 401(k) is converted to a Roth 401(k) using an in-plan Roth conversion. Different plan providers have different ... Read Full Answer >>
  2. I'm an 80 year old making increasing required minimum distribution (RMD) tax payments. ...

    First, some background information: the tax treatment of a Roth IRA distribution depends on whether or not the distribution ... Read Full Answer >>
  3. 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. ... Read Full Answer >>
  4. How can I get information about my deceased husband's retirement account if his employer ...

    That is unusual. Contact his employer again and if you are not satisfied with the response, ask to speak with a supervisor ... Read Full Answer >>
  5. What is the difference between a correspondent bank and intermediary bank?

    Correspondent and intermediary banks serve as third-party banks that coordinate with beneficiary banks to facilitate international ... Read Full Answer >>
  6. What net interest margin is typical for a bank?

    In the United States, the average net interest margin for banks was 3.03% in the first quarter of 2015. However, this was ... Read Full Answer >>
Related Articles
  1. 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?
  2. Taxes

    9 Penalty-Free IRA Withdrawals

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

    Selecting The Payout On Your Annuity

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

    Demystification Of Bank Accounts

    Find out which type of account suits your specific needs.
  5. Investing Basics

    What Does a Financial Intermediary Do?

    A financial intermediary is an institution that acts as a go-between in a financial transaction.
  6. Savings

    5 Things to Look for in a Private Banker

    When putting all your assets into one private banker basket, it pays to proceed with caution.
  7. Investing

    Do You Need A Private Banker?

    They offer well-heeled clients unparalleled convenience, but could be prone to certain conflicts of interest.
  8. Credit & Loans

    What is a Financial Institution?

    A financial institution is in business to, among other things, accept deposits, make loans, exchange currencies, and broker investment securities.
  9. Economics

    What Does Principal Mean?

    For banks, principal refers to the amount due on a loan, and is used to calculate interest payments.
  10. Economics

    Explaining Prime Rate

    Prime rate is the interest rate banks charge their best (e.g. prime) customers.

You May Also Like

Hot Definitions
  1. Bund

    A bond issued by Germany's federal government, or the German word for "bond." Bunds are the German equivalent of U.S. Treasury ...
  2. European Central Bank - ECB

    The central bank responsible for the monetary system of the European Union (EU) and the euro currency. The bank was formed ...
  3. Quantitative Easing

    An unconventional monetary policy in which a central bank purchases private sector financial assets in order to lower interest ...
  4. Current Account Deficit

    A measurement of a country’s trade in which the value of goods and services it imports exceeds the value of goods and services ...
  5. International Monetary Fund - IMF

    An international organization created for the purpose of: 1. Promoting global monetary and exchange stability. 2. Facilitating ...
  6. Risk-Return Tradeoff

    The principle that potential return rises with an increase in risk. Low levels of uncertainty (low-risk) are associated with ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!