Define: Early Withdrawal Penalty

UK Accounting Glossary

Definition: Early Withdrawal Penalty



Advertisement



Full Definition of Early Withdrawal Penalty


An early withdrawal penalty is a fine levied on funds removed from an investment before they are allowed to be removed, according to the agreement signed. For example, cashing in a one-year certificate of deposit after six months will result in an early withdrawal penalty equivalent to a few month’s interest. The purpose of an early withdrawal penalty is to punish an investor for withdrawing funds that the investor agreed to let an institution use for a stated period of time. Retirement accounts typically come with an early withdrawal penalty. For example, most accounts will levy an early withdrawal penalty on funds removed before age 59½. This early withdrawal penalty may be as much as 10% of the withdrawn amount.


Advertisement




Cite Term


To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
https://payrollheaven.com/define/early-withdrawal-penalty/
Modern Language Association (MLA):
Early Withdrawal Penalty. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. February 27, 2020 https://payrollheaven.com/define/early-withdrawal-penalty/.
Chicago Manual of Style (CMS):
Early Withdrawal Penalty. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/early-withdrawal-penalty/ (accessed: February 27, 2020).
American Psychological Association (APA):
Early Withdrawal Penalty. PayrollHeaven.com. Retrieved February 27, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/early-withdrawal-penalty/

Definition Sources


Definitions for Early Withdrawal Penalty are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • BusinessDictionary.com
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 9th February 2020.