Taking money out of your Fidelity investments can seem like a complex process, especially with different account types and withdrawal methods. But don't worry, we're here to guide you through it step-by-step! This comprehensive guide will help you understand the various options, what to consider, and how to execute your withdrawal successfully.
Your Guide to Taking Money Out of Fidelity Investments
Ready to access your hard-earned money from Fidelity? Let's get started!
Step 1: Identify Your Account Type and Withdrawal Needs
Before you do anything else, the absolute first step is to understand the specific type of Fidelity account you're looking to withdraw from. This is crucial because withdrawal rules, tax implications, and available methods vary significantly depending on whether it's a retirement account (like an IRA or 401(k)) or a taxable brokerage account.
Ask yourself: What kind of Fidelity account holds the funds I want to withdraw? Is it a:
Brokerage Account (Taxable): This is a standard investment account where you've invested after-tax money. Withdrawals are generally straightforward, but you might incur capital gains taxes if you sell investments for a profit.
IRA (Individual Retirement Account): This includes Traditional IRAs, Roth IRAs, SEP IRAs, and SIMPLE IRAs. These accounts have specific rules regarding withdrawals, especially before age 59½, to avoid penalties.
401(k) or other Employer-Sponsored Retirement Plan: These are workplace retirement plans, and withdrawals are often more restricted, typically requiring you to be separated from service or meet specific hardship criteria.
529 College Savings Plan: Designed for educational expenses, these have specific qualified withdrawal rules to maintain their tax benefits.
Cash Management Account: This is more like a banking account with Fidelity, and withdrawals are generally very easy.
Once you know your account type, you can proceed with confidence, understanding the potential implications of your withdrawal.
Step 2: Determine Your Withdrawal Method
Fidelity offers several convenient ways to get your money, each with its own timing and limits.
Sub-heading: Electronic Funds Transfer (EFT)
Description: This is the most common and often preferred method for transferring money between your Fidelity account and your linked bank account. It uses the Automated Clearing House (ACH) network.
Pros: No fees from Fidelity, generally reliable and secure.
Cons: Can take 1-3 business days for funds to arrive in your bank account. There are daily withdrawal limits, typically up to $100,000 for withdrawals.
How to initiate:
Log in to your Fidelity.com account.
Navigate to "Accounts & Trade" or "Move Money."
Select "Transfer & Withdraw."
Choose the Fidelity account you want to withdraw from and the linked bank account as the destination.
Enter the amount.
Review and confirm the transaction.
Sub-heading: Bank Wire
Description: A bank wire is a faster way to transfer funds directly to your bank account.
Pros: Funds are typically available the same business day if submitted by Fidelity's cutoff time (usually 4 p.m. ET). Higher transfer limits, up to $1 million per day.
Cons: Your receiving bank may charge a fee for incoming wires.
How to initiate:
This typically requires a phone call to Fidelity customer service.
Provide them with your bank's wire transfer instructions (bank name, routing number, account number, beneficiary name).
Confirm any fees with your bank beforehand.
Sub-heading: Paper Check
Description: You can request a physical check to be mailed to your address of record or an alternate recipient.
Pros: Useful if you don't have a linked bank account or prefer a physical check.
Cons: Slowest method, typically taking 5-7 business days to process and mail.
How to initiate:
Log in to Fidelity.com or call customer service.
Navigate to the withdrawal section.
Select "Request a Check" and fill out the necessary details.
Sub-heading: ATM Withdrawal (Fidelity Cash Management Account)
Description: If you have a Fidelity Cash Management Account with a debit card, you can withdraw cash directly from ATMs.
Pros: Immediate access to cash. Fidelity reimburses ATM fees for certain accounts.
Cons: Daily ATM withdrawal limits apply.
How to initiate: Use your Fidelity debit card at any ATM.
Sub-heading: Other Options (Mobile Payment Apps)
Description: Fidelity accounts may be compatible with third-party payment apps like PayPal, Venmo, Apple Pay, Google Pay, and Samsung Pay, depending on the account type.
Pros: Convenient for smaller, quick transfers.
Cons: Compatibility varies by account type and the specific app. Limits may apply.
How to initiate: Link your eligible Fidelity account to your chosen mobile payment app and follow the app's instructions for transfers.
Step 3: Consider the Tax Implications (Crucial!)
This is perhaps the most important step, especially when withdrawing from retirement accounts. Ignoring tax implications can lead to unexpected penalties and a significantly reduced payout.
Sub-heading: Taxable Brokerage Accounts
Capital Gains: If you sell investments that have appreciated in value, you will owe capital gains tax on those profits. The tax rate depends on how long you've held the investment (short-term vs. long-term).
Cost Basis: Fidelity tracks your cost basis, which is the original price you paid for your investments. This is used to calculate your gains or losses.
No Early Withdrawal Penalties: Since these are not retirement accounts, there are no IRS early withdrawal penalties.
Sub-heading: Retirement Accounts (IRAs, 401(k)s, etc.)
Traditional IRA/401(k) (Pre-tax contributions):
Taxable Income: Withdrawals are generally taxed as ordinary income.
Early Withdrawal Penalty (before 59½): A 10% IRS penalty usually applies to withdrawals made before age 59½, in addition to income tax.
Exceptions to Penalty: There are several exceptions to the 10% early withdrawal penalty, such as for qualified higher education expenses, first-time home purchases (up to $10,000), unreimbursed medical expenses, disability, or death. Always consult IRS Publication 590-B or a tax advisor for the most current and complete list of exceptions.
Required Minimum Distributions (RMDs): Once you reach a certain age (currently 73 for most), you are generally required to start taking withdrawals (RMDs) from these accounts. Failure to do so can result in a steep penalty.
Roth IRA (After-tax contributions):
Qualified Withdrawals (Tax-Free & Penalty-Free): If you are 59½ or older AND have had the Roth IRA open for at least 5 years, all withdrawals (contributions and earnings) are generally tax-free and penalty-free.
Non-Qualified Withdrawals: If you don't meet the qualified withdrawal criteria, your contributions can be withdrawn tax-free and penalty-free at any time. However, earnings may be subject to income tax and the 10% early withdrawal penalty.
Order of Withdrawal: Contributions are generally considered to be withdrawn first, then conversions, and finally earnings.
401(k) Hardship Withdrawals: These are specific withdrawals allowed under certain "immediate and heavy financial needs" as defined by the IRS and your plan. While they may avoid the 10% penalty, they are still subject to income tax.
Always consider consulting a tax professional before making significant withdrawals from any investment account, especially retirement accounts, to fully understand your individual tax situation and minimize potential liabilities.
Step 4: Initiate the Withdrawal Online (Recommended for Most Cases)
Fidelity's online platform is generally the most straightforward way to manage your withdrawals.
Log in to Fidelity.com: Go to
www.fidelity.com Navigate to "Move Money": Once logged in, look for a "Move Money" tab or link. This is usually prominently displayed in the main navigation or on your account summary page.
Select "Transfer & Withdraw": Under the "Move Money" section, you'll typically find an option for "Transfer & Withdraw" or "Withdraw Money." Click on this.
Choose Your Source Account: A list of your Fidelity accounts will appear. Carefully select the account you wish to withdraw funds from.
Enter Withdrawal Details:
Amount: Specify the exact amount you want to withdraw.
Destination: Choose where you want the money to go. This will usually be a pre-linked bank account (EFT), or you'll have options for a check. If it's a retirement account, you might also have options to transfer to another Fidelity account with the same SSN.
Frequency: Decide if it's a one-time withdrawal or if you want to set up recurring withdrawals (e.g., for retirement income).
Tax Withholding (for Retirement Accounts): For pre-tax retirement accounts, you'll likely be asked about federal and state tax withholding. Be mindful of this! Withholding too little could lead to a tax bill later, while withholding too much could reduce your immediate funds. You can generally choose to have a percentage withheld or a specific dollar amount.
Review and Confirm: Carefully review all the details of your withdrawal request, including the amount, destination, and any tax withholding. Make sure everything is accurate.
Submit Request: Click "Confirm" or "Submit" to finalize your withdrawal. You'll usually receive a confirmation message and possibly an email.
Step 5: Monitor Your Withdrawal Status
After submitting your request, it's a good idea to keep an eye on its progress.
Online Status: Fidelity's "Activity & Orders" or "Pending Transfers" section within your account will typically show the status of your withdrawal.
Email Confirmations: You may receive email notifications from Fidelity regarding the initiation and completion of your transfer.
Bank Account: Check your linked bank account after the estimated processing time (1-3 business days for EFTs, same day for wires) to confirm the funds have arrived.
Step 6: Special Considerations and Troubleshooting
Sub-heading: Unlinked Bank Accounts
If you haven't linked your bank account to Fidelity, you'll need to do so before initiating an EFT. This usually involves:
Providing your bank's routing and account numbers.
Fidelity sending small "trial deposits" to your bank account, which you then verify online. This process can take a few business days for verification.
Sub-heading: Selling Investments Before Withdrawal
If the money you want to withdraw is currently invested in mutual funds, stocks, or ETFs, you'll generally need to sell those investments first to convert them into cash. This cash will then be available in your Fidelity account's core position for withdrawal. Be aware that sales can take a few business days to settle before the cash is truly available for withdrawal.
Sub-heading: Large Withdrawals and Limits
Fidelity has daily limits for online EFT withdrawals (e.g., $100,000). For larger amounts, you might need to:
Use a bank wire.
Call Fidelity customer service to discuss options for exceeding online limits.
Sub-heading: Errors or Issues
If you encounter any issues or have questions during the process, don't hesitate to:
Use Fidelity's Virtual Assistant on their website.
Chat live with a Fidelity representative.
Call Fidelity customer service. Their general customer service number is 800-343-3548. For specific account types (e.g., 401(k), 529), there might be dedicated phone numbers.
10 Related FAQ Questions
Here are 10 frequently asked questions, starting with 'How to', along with quick answers to help you navigate your Fidelity withdrawals.
How to link a bank account to my Fidelity account for withdrawals?
Go to Fidelity.com, log in, navigate to "Move Money," then "Transfer & Withdraw," and look for an option to "Link a Bank Account" or "Add a Bank Account." You'll typically need to provide your bank's routing and account numbers, and then verify small trial deposits.
How to avoid taxes on Fidelity withdrawals?
For taxable brokerage accounts, you can't avoid taxes on capital gains if you sell investments at a profit. For Roth IRAs, qualified withdrawals (after age 59½ and 5 years holding period) are tax-free. For Traditional IRAs/401(k)s, withdrawals are generally taxable, but you might avoid early withdrawal penalties if an IRS exception applies (e.g., first-time home purchase, qualified education expenses). Consult a tax advisor.
How to withdraw money from a Fidelity IRA without penalty?
Withdrawals from an IRA after age 59½ are generally penalty-free (though Traditional IRA withdrawals are still taxable). Certain IRS exceptions allow penalty-free withdrawals before 59½, such as for disability, qualified education expenses, or up to $10,000 for a first-time home purchase.
How to get money from Fidelity quickly?
The fastest method is generally a bank wire, which can deliver funds the same business day if submitted before Fidelity's cutoff time. Electronic Funds Transfers (EFTs) typically take 1-3 business days.
How to check the status of my Fidelity withdrawal?
Log in to Fidelity.com, go to "Accounts & Trade," and look for "Activity & Orders" or "Pending Transfers." You may also receive email confirmations.
How to withdraw more than Fidelity's online daily limit?
For amounts exceeding the online EFT daily limit (e.g., $100,000), you can usually initiate a bank wire (which has higher limits) or call Fidelity customer service to discuss alternative arrangements.
How to withdraw only the earnings from my Fidelity account?
For some accounts (especially taxable accounts and some mutual funds), you can set up an "Earnings Automatic Withdrawal Plan" to automatically distribute dividends, interest, and capital gains to your linked bank account. Check your account features online.
How to take money from a Fidelity 401(k) after leaving an employer?
After leaving an employer, you typically have options: leave the money in the 401(k) (if allowed), roll it over to a new 401(k) or an IRA (tax-free transfer), or cash it out (which will be taxable and potentially subject to a 10% early withdrawal penalty if under 59½). Rollovers are generally recommended to maintain tax-deferred growth.
How to get a paper check from Fidelity?
Log in to Fidelity.com, go to the "Move Money" or "Withdraw" section, and select the option to "Request a Check." You'll need to specify the amount and the mailing address. This method is slower than electronic transfers.
How to contact Fidelity customer service for withdrawal assistance?
You can contact Fidelity customer service by phone at 800-343-3548. You can also use their online chat feature or virtual assistant on Fidelity.com for assistance.
