Getting your money out of your Fidelity Investments account is a common and often straightforward process, but the how and when can vary significantly based on your account type and needs. Whether you're planning a major life purchase, supplementing your income in retirement, or simply reorganizing your finances, understanding the various withdrawal methods and their implications is crucial.
Ready to access your funds? Let's dive in!
Navigating Your Fidelity Funds: A Step-by-Step Guide to Withdrawals
Successfully withdrawing money from Fidelity involves a few key considerations, from choosing the right method to understanding potential tax implications. This comprehensive guide will walk you through the process.
Step 1: Identify Your Account Type and Purpose of Withdrawal
Before you even think about clicking "withdraw," pause and consider: What kind of Fidelity account do you have, and why do you need this money? The answer to these questions will heavily influence your options and any potential fees or tax consequences.
Brokerage Account: This is typically the most flexible. You can withdraw cash that has settled from investments or cash you've directly deposited.
Fidelity Cash Management Account: Designed more like a traditional bank account, these offer easy access to cash via debit card, checks, and electronic transfers.
Retirement Accounts (IRA, 401(k), etc.): These come with specific IRS rules regarding withdrawals, especially before age 59½. Early withdrawals often incur penalties and taxes, while Required Minimum Distributions (RMDs) kick in at a certain age.
529 College Savings Plan: Withdrawals from these accounts are tax-free if used for qualified educational expenses.
Fidelity Go Account: For robo-advised accounts, you might need to liquidate investments first to get cash.
Understanding the nature of your account is the first and most critical step in determining the best withdrawal strategy for you.
Step 2: Ensure Your Funds Are Available for Withdrawal (Settled Funds)
Just like in a traditional bank, funds need to be "settled" before they can be withdrawn. If you've recently sold investments, the cash proceeds might not be immediately available.
Equity Trades: Typically, cash from stock or ETF sales settles in 2 business days (T+2).
Mutual Funds: Mutual fund sales usually settle on the next business day after the trade (T+1), but can sometimes take longer depending on the fund.
To avoid delays, always check your account's "Available to Withdraw" or "Cash Available for Withdrawal" balance before initiating a transfer. You can usually find this information in your online Fidelity portfolio.
Step 3: Choose Your Withdrawal Method
Fidelity offers a variety of ways to get your money, each with its own pros and cons regarding speed, limits, and fees.
Sub-heading 3.1: Electronic Funds Transfer (EFT) to Your Bank Account
This is the most common and often most convenient method for withdrawing money from your Fidelity account to an external bank account.
Process:
Link Your Bank Account: If you haven't already, you'll need to link your external bank account to your Fidelity account. You can do this by logging into Fidelity.com, navigating to "Accounts & Trade" > "Transfers" > "Linked accounts and banks." You can securely link using Plaid (instant verification) or manually enter your bank's routing and account numbers (which may require micro-deposits for verification).
Initiate Transfer: Once linked, go to "Accounts & Trade" > "Transfers," select your Fidelity account as the "Transfer from" account, and your linked bank account as the "Transfer to" account. Enter the desired amount.
Confirm: Review the details and confirm the transfer.
Timing: EFTs typically take 1-3 business days to reach your external bank account.
Limits: Fidelity usually has a daily withdrawal limit of $100,000 for online EFTs. For larger amounts, you may need to call customer service.
Fees: Fidelity does not charge fees for EFTs.
Sub-heading 3.2: Bank Wire Transfer
Wire transfers are ideal for large sums of money and when you need funds quickly.
Process: You can initiate a wire transfer online or by calling Fidelity customer service. You'll need the recipient bank's name, routing number, account number, account holder's name, and address.
Timing: If submitted before 4 p.m. ET on a business day, funds are typically available the same business day.
Limits: The daily limit for bank wires is generally $1 million per client. Larger amounts may require a phone call.
Fees: While Fidelity generally doesn't charge for outgoing wires, your receiving bank might charge a fee.
Sub-heading 3.3: Requesting a Paper Check
For those who prefer a physical check, Fidelity can mail one to you or a third party.
Process: You can request a check online through your Fidelity account or by calling customer service.
Timing: A check typically takes 5-6 business days to process before being mailed, and then additional time for postal delivery.
Fees: Fidelity generally does not charge for sending a paper check.
Sub-heading 3.4: Using a Fidelity Debit Card (for Cash Management Accounts)
If you have a Fidelity Cash Management Account, you'll receive a debit card that allows for easy ATM withdrawals and point-of-sale purchases.
Process: Use your Fidelity debit card at any ATM displaying the Visa® or Plus® logo.
Timing: ATM withdrawals are instant.
Limits: There's usually a daily ATM cash withdrawal limit (e.g., $400) and a daily purchase limit (e.g., $2,500). Fidelity also reimburses ATM fees from other institutions.
Fees: No direct fees from Fidelity for ATM withdrawals, and they reimburse fees charged by other ATM operators.
Sub-heading 3.5: Transferring to Another Fidelity Account
If you simply want to move money between different Fidelity accounts (e.g., from a brokerage account to a Cash Management Account), this is usually instantaneous.
Process: Log in to your Fidelity account, go to "Accounts & Trade" > "Transfers," and select the Fidelity accounts for the transfer.
Timing: Transfers between Fidelity accounts are typically completed within minutes.
Fees: No fees.
Sub-heading 3.6: Transferring to Another Brokerage Account (Account Transfer)
If you're looking to move your entire account, or a portion of it, to another brokerage firm, you'll typically initiate this process from the receiving brokerage firm's side.
Process: Contact the new brokerage and initiate an "Account Transfer" (also known as an ACATS transfer). They will request the assets from Fidelity.
Timing: Full account transfers can take 3-5 business days, sometimes longer, depending on the complexity of the assets.
Fees: Fidelity generally does not charge for outgoing ACATS transfers, but the receiving firm might have fees.
Step 4: Consider Tax Implications (Especially for Retirement Accounts)
This is a critical step that often gets overlooked. Withdrawing from certain account types can trigger significant tax events.
Taxable Brokerage Accounts: You'll generally only pay capital gains tax on any profits from investments you sell to generate cash for withdrawal. If you withdraw cash you previously deposited or from settled dividends/interest, it's not a taxable event (unless it's an interest-bearing account).
Traditional IRA/401(k): Withdrawals from these pre-tax accounts are generally taxable as ordinary income. If you are under 59½, you may also face a 10% early withdrawal penalty, unless an IRS exception applies (e.g., first-time home purchase, qualified education expenses, disability).
Roth IRA/401(k): Qualified withdrawals (after age 59½ and the account has been open for at least 5 years) are tax-free and penalty-free. Non-qualified withdrawals may be subject to taxes on earnings and/or penalties.
Required Minimum Distributions (RMDs): If you're of a certain age (currently 73 for most), you're required to take annual withdrawals from your retirement accounts. Fidelity can help calculate and automate these for you. Failing to take your RMD can result in a 25% penalty on the amount not withdrawn.
It is highly recommended to consult with a qualified tax advisor before making significant withdrawals from retirement or other tax-advantaged accounts. They can help you understand the potential tax burden and explore strategies to minimize it.
Step 5: Monitor Your Withdrawal and Confirm Receipt
After initiating a withdrawal, it's wise to keep an eye on its status.
Fidelity Online: Log in to your Fidelity account and check the "Activity & Orders" or "Pending Transactions" section to see the status of your transfer.
External Bank: Check your external bank account or statement to confirm the funds have been received.
If you experience any delays or issues, don't hesitate to contact Fidelity's customer service. They are available by phone, online chat, or at a local investor center.
Step 6: Review and Adjust as Needed
Once your withdrawal is complete, take a moment to review your remaining portfolio and adjust your financial plan if necessary. Are you still on track for your financial goals? Do you need to rebalance your investments? Regularly reviewing your financial strategy ensures your withdrawals align with your broader objectives.
Frequently Asked Questions (FAQs) about Withdrawing Money from Fidelity
Here are 10 common questions about getting your money from Fidelity, with quick answers:
How to check my available balance for withdrawal?
You can find your "Cash Available to Withdraw" or "Available to Withdraw" balance by logging into your Fidelity.com account and navigating to your portfolio or account summary.
How to link a new bank account to Fidelity?
Log in to Fidelity.com, go to "Accounts & Trade" > "Transfers" > "Linked accounts and banks," and follow the prompts to either instantly link via Plaid or manually enter your routing and account numbers.
How to withdraw money from a Fidelity IRA without penalty?
Generally, you must be 59½ or older to withdraw from a Traditional IRA without a 10% early withdrawal penalty. For Roth IRAs, qualified withdrawals are tax and penalty-free after 59½ and five years of account ownership. Exceptions to early withdrawal penalties may apply.
How to speed up a withdrawal from Fidelity?
For the fastest access to funds, consider a bank wire transfer (typically same-day if initiated by 4 p.m. ET) or utilizing a Fidelity Cash Management Account with its debit card for instant ATM access.
How to withdraw a large sum of money from Fidelity?
For large sums, a bank wire transfer is usually the most efficient method, with daily limits often up to $1 million online. For amounts exceeding online limits, you'll need to contact Fidelity customer service.
How to set up recurring withdrawals from Fidelity?
Fidelity allows you to set up automatic withdrawals for various purposes, including Required Minimum Distributions (RMDs) from retirement accounts. This can typically be done online within your account settings or by contacting customer service.
How to avoid taxes on Fidelity withdrawals?
Avoiding taxes depends heavily on the account type. Qualified withdrawals from Roth IRAs are tax-free. For other accounts, strategies like tax-loss harvesting or careful timing of sales can help minimize tax impact, but generally, taxable accounts will incur capital gains on profits, and pre-tax retirement accounts will be taxed as ordinary income upon withdrawal. Consult a tax advisor.
How to close a Fidelity account and get my money?
To close a Fidelity account, you typically need to withdraw or transfer all funds and assets out of the account first. Once the balance is zero, you can then formally request account closure online or by contacting Fidelity customer service.
How to transfer money from Fidelity to another brokerage?
Initiate an "Account Transfer" (ACATS) from the receiving brokerage firm. They will facilitate the transfer of assets directly from your Fidelity account to your new account.
How to get money from Fidelity if I don't have a linked bank account?
You can request a paper check to be mailed to you, or you can link a bank account (which may take a few days for verification) to enable electronic transfers.
