How to cash in your funds

Well, you’ve played the market like an expert, researched exactly the right mutual fund for you, and the fund that you’ve taken under your wing is showing a big, fat profit and you want to use a little of that money to go buy something nice. But how do you get your money back that is in the fund? And what sort of fees will be associated with that? Let’s take a look.

One of the best aspects of mutual funds is that they are “liquid”. That means that you can change your cash into mutual funds and back to cash right away with no delays. For many investors, especially first time investors who may not have a lot of extra income, liquidity is extremely important in an investment. If you need quick access to your money, you get it with mutual funds.

In some cases, you won’t even have to cash in your funds to use the money that is in them. A few different types of mutual funds, such as some fixed-income mutual funds and most types of money market mutual funds come with the ability to write checks against the money in your mutual fund. These are exactly like the checks your credit card company sends you. You’re writing a check that will be withdrawn from the amount you have invested in your mutual funds.

Many different mutual funds offer a program where you can contact the fund either over the Internet or by phone and let them know that you want to cash in a percentage of your holdings. While this transaction can take a few days, the mutual fund company will immediately transfer the cash value of your transaction into an account that you’ll have checks for. So while it may take a few days to cash in your shares, you will have instant access to the money in your account.

A final way that people usually withdraw money from their mutual fund is by a bank wire transfer. You simply tell the fund that you want to take some money out and they will wire it to your savings or checking account. Many funds, however, do require this request in writing and you will have to get an authorized form through your bank that can be sent to your mutual fund. This is done mainly to prevent fraud.

As you can see, taking money out of a mutual fund is quick and easy. The liquidity of mutual funds may be their strongest point since you know your money won’t even be out of reach when you need it.

Related Posts