If you're on a Galaxy Fold, consider unfolding your phone or viewing it in full screen to best optimize your experience.
No matter what you're investing for, there comes a time when you need to withdraw money from a brokerage account. This may be a bit different than what you're used to. Unlike with a bank account, taking money out of this type of investment account can sometimes involve extra steps. The main reason is that your money is presumably invested and not available as cash.
Fortunately, it's not too difficult to get the hang of this process. Once you learn how to withdraw money from a brokerage account, you'll be able to access your money when you need it.
When you want to withdraw money from brokerage account, here's how:
You can only withdraw cash from your brokerage account. If you want to withdraw more than you have available as cash, you'll need to sell stocks or other investments first. If you want to move your investments from one account to another, check out our guide on how to transfer a brokerage account.
Keep in mind that after you sell stocks, you must wait for the trade to settle before you can withdraw money from your brokerage account. This typically takes two business days. After your trade has settled, you can follow the withdrawal process above to get your cash. You will also owe taxes after selling stock if you've made a profit.
One final factor to note is that if you have a margin account, your broker might let you take cash out before your trades settle. However, you could be charged margin interest for the period of time between when you submit the request to withdraw money from a brokerage account and when the settled funds reach your account. Always check with your broker before making an automated withdrawal to ensure you won't get hit with interest charges or other fees by jumping the gun.
$0 for stocks, $0 for options contracts
$0
A clear standout for a modern investing experience, particularly for beginner and long-term investors. The ability to buy fractional shares, as well as the ability for everyday investors to participate in IPOs, bolsters our overall opinion.
On SoFi Active Investing's Secure Website.
$0 for stocks, ETFs, and options; up to $6.99 monthly for Robinhood Gold
$0
With no commissions, access to trade fractional shares and cryptocurrency through Robinhood Crypto, Robinhood is a no frills but efficient brokerage account.
On Robinhood's Secure Website.
Commission-free; other fees apply
$0
E*TRADE offers low fees and tons of account types. If you need it, chances are, E*TRADE has it. You can access advanced features through its popular Power E*TRADE platform. Open an E*TRADE account to trade fee-free mutual funds and do all your investing in one place.
On E*TRADE's Secure Website.
If you've opened an individual retirement account (IRA) with your broker and you want to make a withdrawal, there are additional rules you need to know.
Withdrawals from retirement accounts have brokerage taxes that withdrawals from regular brokerage accounts don't. If you take money out of a traditional IRA or 401(k) account, you have to pay income tax on the amount of your withdrawal. You'll add the withdrawal to your taxable income when preparing your tax return, and then you must pay the resulting taxes, which will depend on your tax bracket.
What's more, those who are younger than age 59 1/2 often have to pay early withdrawal penalties, which is why it's not recommended to tap into your retirement savings early. The federal government charges early withdrawal penalties equal to 10% of the withdrawal. Your state may also charge a penalty of its own. Fortunately, there are some exceptions. It may be possible to avoid a penalty if your withdrawal is for any of the following:
The way taxes and penalties are handled depend on the broker. Some require you to withhold these from the amount you withdraw, which means you'd need to take out more money to end up with the amount you want. Others let you decide if you want to withhold anything. If not, then you're responsible for paying any applicable taxes and penalties when you file your tax return.
It's not quite as fast or easy to withdraw money from a brokerage account as it is to get money out of your bank account. If you need to make any trades, those will take a couple days to settle. You'll also need to wait for the funds to transfer to your bank account after you make the withdrawal, unless you pay extra to wire the money.
What this means is that it's best to give yourself some time to withdraw money from a brokerage account. You'll be able to get a hold of your money, but it's not a process that you can rush.
Uncover the names of the select brokers that landed a spot on The Ascent's shortlist for the best online stock brokers. Our top picks pack in valuable perks, including some that offer $0 commissions and big bonuses.
Yes, you can pull money out of a brokerage account with a bank account transfer, a wire transfer, or by requesting a check. You can only withdraw cash, so if you want to withdraw more than your cash balance, you'll need to sell investments first.
It generally takes one to three business days for an ACH transfer to a bank account, less than 24 hours for a wire transfer, and seven to 10 days for a check.
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent, a Motley Fool service, does not cover all offers on the market. The Ascent has a dedicated team of editors and analysts focused on personal finance, and they follow the same set of publishing standards and editorial integrity while maintaining professional separation from the analysts and editors on other Motley Fool brands.
E*TRADE services are available just to U.S. residents.
Robinhood disclosure
All investments involve risk and loss of principal is possible.
Securities are offered through Robinhood Financial LLC, member FINRA/SIPC. Cryptocurrency services are offered through an account with Robinhood Crypto, LLC (NMLS ID 1702840). Robinhood Crypto is licensed to engage in virtual currency business activity by the New York State Department of Financial Services. Cryptocurrency held through Robinhood Crypto is not FDIC insured or SIPC protected. For more information see the Robinhood Crypto Risk Disclosure.
Trades of stocks, ETFs and options are commission-free at Robinhood Financial LLC. Other fees may apply. Please see Robinhood Financial’s Fee Schedule to learn more.
Fractional shares are illiquid outside of Robinhood and are not transferable. Not all securities available through Robinhood are eligible for fractional share orders. For a complete explanation of conditions, restrictions and limitations associated with fractional shares, see the Fractional Shares section of our Customer Agreement.
Robinhood Gold is an account offering premium services available for a $5 monthly fee. Not all investors will be eligible to trade on Margin. Margin investing involves the risk of greater investment losses. Additional interest charges may apply depending on the amount of margin used. Bigger Instant Deposits are only available if your Instant Deposits status is in good standing.