Early Withdrawal

The term Early Withdrawal describes the premature removal of fixed-term investment funds.This occurs any time an investor decides to prematurely remove funds from an investment before the term length has ended. Early Withdrawal applies to any investment that has specified ending terms that are based on a specified time frame including CDs, bonds, certain mutual funds, 401Ks, and IRAs. In terms of real estate, Early Withdrawal relates to any act where a person decides to remove their funds before they have fulfilled their contract, including investors who decide to remove their money early and potential home-buyers who decide to remove their holding funds prior to the sale. This can severely impact a real estate developer’s ability to follow through with an incomplete project or a real estate agent’s ability to proceed with the buying process, therefore, strict penalties have been created to prevent persons from withdrawing their money early. Early Withdrawal can result in fines and an investor’s loss (or lessening) of stake in a particular company or fund shares.