How To Withdraw Funds From a Brokerage Account?

To withdraw money from your brokerage account, you usually have to: create a withdrawal request in your cabinet at the broker, and wait for it to be processed. You may need to close all or part of your open positions beforehand.

Withdrawing money either for personal expenses or to capitalize on your investment gains from your trading account is the primary aspect of managing your investments.

If you want to know about the process behind withdrawing funds, understand the costs involved, or anticipate potential problems that may arise during the process, you've come to the right place. This article will help you understand the basics of brokerage accounts and how to solve the possible issue that comes along for better trading.

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What happens to money in a brokerage account?

The money is subjected to a specific set of rules and functions quite differently from a regular bank account. Like they are:

Kept in Custody - This means that the brokerage firm takes responsibility for safeguarding your funds and ensuring they are used for their intended purposes – trading and investing
Used for Investments - The primary purpose of a brokerage account is to facilitate the buying and selling of financial assets and your deposited funds are used to purchase these assets
Cash vs. Margin - Brokerage accounts can have cash balances or margin balances. Cash balances reflect the actual cash you have in the account, while margin balances allow you to borrow money from the broker to trade larger positions. However, using a margin also involves interest costs and additional risk
Access to Profits and Losses - Profits are added to your account and losses are debited, providing you with a ledger statement for regular fund checking
Withdrawals - You can withdraw money from your brokerage account anytime, subject to certain rules and procedures

Steps to Withdraw Money from a Trading Account

Withdrawing money from your trading account is a straightforward process, provided your account is verified. As a rule, brokers, to combat money laundering, do not allow you to withdraw money from accounts for which identity verification has not been passed. Learn also what to do if the broker does not withdraw money.

Log into Your Account - Begin by logging into your brokerage account using your secure credentials. Ensure you have access to your account dashboard
Move to Withdrawal Section - Once logged in, navigate to the withdrawal section within your account. This section may be labeled as "Withdraw Funds" or something similar
Choose the Withdrawal Method - Decide among options like bank transfers, wire transfers, electronic wallets (e-wallets), or checks
Enter the Amount - Type the amount you want to withdraw from your trading account
Choose Method (if applicable) - Depending on your chosen withdrawal method, you may need to provide additional details such as bank account information or e-wallet credentials
Confirm and Wait - Review your withdrawal request for accuracy, and if everything looks correct, confirm your withdrawal. The brokerage firm will then process your request

Above step by step instructions to withdraw money from a trading account are common in most of the broker firms however, the withdrawal process depends on different broker firms. You may have to add-on in these steps if the broker requires you to do so. Always check the common procedure of brokers before making a withdrawal request.

How much does it cost to withdraw from a brokerage account?

The cost of withdrawing funds from a brokerage account differs in each brokerage firm according to the features and policies set by them. Here are some facts that affect the withdrawal charges.

Brokerage Policies
Wire Transfer Fees
Paper Checks
ATM Fees
Currency Conversion Fees
Brokerage-Specific Fees

Here’s a more detailed article for you on understanding and comparing the brokerage fees, including withdrawal fees.

Possible problems with withdrawal of funds and how to solve them

Sometimes, you can encounter challenges while withdrawing funds from the brokerage account. They might be like:

Verification Issues - If your account isn't fully verified, the withdrawal may be delayed or denied
Insufficient Funds - To solve this, double-check your account balance and adjust the withdrawal amount accordingly
Pending Trades or Open Positions - Some brokerages may require you to close any open positions or pending trades before processing a withdrawal
Withdrawal Restrictions - Some brokerages impose withdrawal restrictions, such as minimum withdrawal amounts or withdrawal frequency limits
Bank Account Issues - While withdrawing, ensure that the account details you provided are accurate. Incorrect information can lead to failed withdrawals
Technical Glitches - Occasionally, technical issues on the brokerage's platform can hinder withdrawals. To solve this, contact customer support for assistance and provide details about the problem
Withdrawal Fees - If unexpected withdrawal fees are deducted, review your brokerage's fee schedule to understand the charges and consider choosing a different withdrawal method if possible
Processing Delays - Withdrawals may take longer to process during high-volume periods or due to the brokerage's internal processes
Communication - In case of any issues or questions regarding your withdrawal, always maintain open communication with your brokerage's customer support
Security Checks - Brokerages may conduct security checks, especially for large withdrawals, which can lead to temporary delays

Pros and Cons of a brokerage account

Diversification
You can diversify your investments across various assets to spread risk and potentially enhance returns
Professional Guidance
Some brokerages offer research tools, expert advice, and investment insights to help you make informed decisions
Liquidity
You can typically access your funds quickly, taking advantage of prompt opportunities

Market Risk
Investments in brokerage accounts are subject to market fluctuations, meaning you can lose money if asset values decline
Fees and Commissions
Brokerages often charge fees for trades, account maintenance, and other services. These costs can eat into your returns
Complexity
Managing a brokerage account can be complex, especially for beginners. It requires knowledge of the financial markets and investment strategies
Emotional Challenges
Volatile markets can evoke emotional responses, leading to impulsive decisions that may harm your investment portfolio
Regulatory Risks
There are regulatory risks associated with investing, such as changes in tax laws or regulations that can impact your returns

To learn more about choosing the right brokerage account, you can refer to the best brokerage accounts for beginners.

Brokerage accounts and withdrawals from it come with various trader-friendly benefits but it also includes fees, risks, and delays. A bit of understanding and comparing the brokerage account before getting into one will be the key for you to start your trading journey successfully. At the same time, securities can be highly leveraged instruments, and the potential for both significant gains and losses is real. Research, analysis, and a bit of diversification can help you to rise against the odds in trading in your favor.

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Go to broker

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Regulation:

FCA, CySEC, MAS, ASIC, FMA, FSA (Seychelles)

Review

Plus500 is an international fintech holding that offers CFD and options trading worldwide through its network of branches, as well as futures trading in the U.S. The company was established in 2008 in the Israel. It is regulated by the FCA, as well as by 9 financial supervisory authorities in other countries, such as CySEC (Cyprus), ASIC (Australia), MAS (Singapore), FSCA (South Africa), among others. Plus500 is listed on the London Stock Exchange (ticker: PLUS) and is part of the companies that make up the FTSE 250 stock index. Plus500 is a reliable intermediary for accessing financial markets, used by over 25 million traders worldwide.

Pros/Cons

•Multi-regulation — licensed in 10 countries;

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9.2/10

Go to broker

Your capital is at risk.
Your capital is at risk.

Minimum deposit:

Deposit Bonus:

Regulation:

ASIC, FCA, DFSA, BaFin, CMA, SCB, CySec

Review

Pepperstone (Pepperstone.com) was founded in 2010 in Melbourne, Australia, by professional traders who were not satisfied with the quality of services provided by most brokers. The founders decided to avoid many of the disadvantages of competitors, including high commissions, delayed execution of orders, etc. The founders therefore focused on improving the technical component. The company has set itself the goal of changing the “rules of the game” and setting the bar high for online trading.
Today, Pepperstone offers clients all over the world some of the best technological solutions and favorable trading conditions. The company also provides professional tools that help traders not only master the fine art of trading, but also significantly increase trading efficiencies. In addition, Pepperstone’s platform is scrutinized by seven regulatory authorities, including ASIC (Australian Securities and Investments Commission, AFSL No.414530), FCA (UK Financial Conduct Authority, 684312), DFSA (F004356), BaFin (151148), CMA, SCB (SIA-F217), and CySec (388/20). Moreover, with Pepperstone, clients' assets are maintained in aggregated accounts with several major, global banking institutions. These facts confirm the reliability of the company and guarantee the safety of the client's capital.

Pros/Cons

•Attractive trading conditions;

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•1,200+ trading instruments;

•Low fees; and

•No inactivity fee.

•Support service works only 24/7;

•No cent account;

•Not available to US clients;

•Limited passive trading opportunities;

•Limited analytical materials available on the site. The only way to resolve this issue is to connect to trading signals;

•No news section; and

•Demo accounts can only trade for free for 60 days.

FAQs

What is brokerage cash and why can't I withdraw it?

Brokerage cash is the uninvested cash balance in your account. You may not withdraw it immediately as it's often held for trade settlement or regulatory requirements.

How much does it cost to withdraw from a brokerage account?

Withdrawal costs can vary depending on the brokerage and method used, including potential fees for wire transfers, checks, or currency conversions.

Do you have access to your money in a brokerage account?

Yes, you have access to your money in a brokerage account, but withdrawal processes and timing can vary.

What is a margin call and how do I handle it?

A margin call occurs when your account falls below the required margin level. You typically need to deposit additional funds or close positions to cover the deficit.

Team that worked on the article

Upendra Goswami is a full-time digital content creator, marketer, and active investor. As a creator, he loves writing about online trading, blockchain, cryptocurrency, and stock trading.

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Dr. BJ Johnson is a PhD in English Language and an editor with over 15 years of experience. He earned his degree in English Language in the U.S and the UK. In 2020, Dr. Johnson joined the Traders Union team. Since then, he has created over 100 exclusive articles and edited over 300 articles of other authors.

Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets. Her specialties are daily market news, price predictions, and Initial Coin Offerings (ICO).

Investor

An investor is an individual, who invests money in an asset with the expectation that its value would appreciate in the future. The asset can be anything, including a bond, debenture, mutual fund, equity, gold, silver, exchange-traded funds (ETFs), and real-estate property.

Diversification

Diversification is an investment strategy that involves spreading investments across different asset classes, industries, and geographic regions to reduce overall risk.

Index

Index in trading is the measure of the performance of a group of stocks, which can include the assets and securities in it.

Yield

Yield refers to the earnings or income derived from an investment. It mirrors the returns generated by owning assets such as stocks, bonds, or other financial instruments.

Margin Call

A margin call is a demand made by a broker or a financial institution to a trader or investor who is using margin (borrowed funds) to cover potential losses in a trading account. It occurs when the value of the securities or assets held in the account falls below a certain threshold, known as the maintenance margin or margin requirement, as specified by the broker.

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