What is ‘Early Withdrawal’
The removal of funds from a fixed-term investment before the maturity date, or the removal of funds from a tax-deferred investment account or retirement savings account, such as an IRA or 401(k) before a prescribed time. Early withdrawal could be anything earlier than the account owner’s attainment of a prescribed minimum age requirement, or the maturity of a fixed-term investment, such as a certificate of deposit (CD).
Explaining ‘Early Withdrawal’
When an early withdrawal is made, the investor usually incurs an early withdrawal fee, which acts as a deterrent to frequent withdrawals before the end of the early withdrawal period. As such, an investor would usually only opt for early withdrawals if there were pressing financial concerns that warranted it, or if he or she had a markedly better use for the funds.
Further Reading
- The impact of the early withdrawal option on time deposit pricing – www.sciencedirect.com [PDF]
- Remittances, financial market development, and economic growth: the case of Latin America and the Caribbean – onlinelibrary.wiley.com [PDF]
- Leaving university early: Exploring the differences between continuing and non‐continuing students – www.tandfonline.com [PDF]
- Evidence of early withdrawal in time deposit portfolios – link.springer.com [PDF]
- Access to financial services and financial infrastructure withdrawal: problems and policies – www.jstor.org [PDF]
- The social dynamics of early withdrawal from the labour force in France – www.cambridge.org [PDF]
- Optimal financial crises – onlinelibrary.wiley.com [PDF]
- Toxic epidermal necrolysis and Stevens-Johnson syndrome: does early withdrawal of causative drugs decrease the risk of death? – jamanetwork.com [PDF]
- Financial valuation of guaranteed minimum withdrawal benefits – www.sciencedirect.com [PDF]
