Standard or urgent withdrawal from an investment account

When you ask an investment provider for your money, the cash does not usually arrive the same day. A standard withdrawal typically reaches your bank account within a few working days, while an urgent withdrawal can be faster but often carries a fee. How long it actually takes depends on the provider, the type of account, and whether your investments need to be sold first.

The range across providers is wide. HSBC says withdrawals from its stocks and shares ISA usually arrive within 4 business days with no exit fees¹. Royal London says 1 to 2 working days². Vanguard says a few days, with no exit or withdrawal fees³. At the slower end, NS&I says withdrawals from its Direct Saver, Direct ISA, Premium Bonds and Income Bonds can take 3 to 5 days to reach your bank account⁴.

If you need the money faster, some providers offer an urgent withdrawal service. ii charges £15 for an urgent withdrawal⁵. That fee comes out of the money you receive, so the amount landing in your bank will be less than the amount you asked for.

How long a standard withdrawal takes to reach your bank

The clock usually starts when your provider receives a complete instruction, not when you decide to withdraw. If your account holds investments rather than cash, the provider may need to sell holdings first, which adds dealing time. That is one reason two providers can quote very different timescales for what sounds like the same request.

NS&I publishes some of the most detailed timescales. For withdrawals up to £50,000 made online or by phone, the payment normally reaches your account by the end of the first banking day after the day NS&I receives your instruction⁴. For larger amounts, or for postal instructions, the timescale stretches. If a withdrawal takes your combined daily total above £50,000, and NS&I receives your phone instruction before 13:00, the payment normally reaches your account two banking days later⁴. If the instruction arrives before 20:00, it is processed that day and the payment normally arrives between two and four banking days after that⁴.

Other providers quote their own windows. Enterprise Credit Union says standard withdrawals requested before 3.00pm on a working day are processed the same day and usually reach your bank after 4.30pm⁸. Royal London says 1 to 2 working days². HSBC says usually within 4 business days¹.

A useful distinction is between the provider's processing time and your bank's clearing time. Even when a provider releases the money promptly, it can take a further day to appear in your account, depending on the payment system used.

Fees and charges for taking money out

Withdrawal charges fall into a few categories, and it helps to know which one applies to you before you request the money.

• Dealing charges. If your provider has to sell shares, investment trusts or exchange-traded funds to fund your withdrawal, you may be charged each time it buys and sells. Less common are fees for buying and selling traditional funds⁹. These charges reduce the amount available to send to you.
• Urgent withdrawal fees. Some providers charge a flat fee for a faster service. ii charges £15 for an urgent withdrawal⁵.
• Exit fees and early withdrawal charges. The FCA's rules for non-mainstream pooled investments warn that you may have to pay exit fees or additional charges to take money out early¹⁰. Fixed term savings accounts may also charge a fee if you want to withdraw before the term ends¹¹.
• Pension drawdown charges. These can include set-up and administration fees, fees on the withdrawal of a tax-free lump sum, fees on each additional withdrawal, tax on each additional withdrawal, transfer fees or exit charges, and fees for ongoing fund management¹².
• Currency and transfer charges. If you are withdrawing to a non-UK bank account, Abundance Investment says it may make charges to recover expenses, including costs for making a withdrawal requiring an international money transfer¹³.

Withdrawing from an ISA, pension or general investment account

The account type changes both the tax treatment and, often, the speed.

Stocks and shares ISAs. Most providers allow withdrawals at any time. Vanguard says you can withdraw anytime, money usually reaches your bank in a few days, and there are no exit or withdrawal fees³. Royal London allows withdrawals via its mobile app, online service, withdrawal form or customer service team, with money arriving in 1 to 2 working days². Legal & General says you can withdraw whenever it suits you¹⁴. HSBC says usually within 4 business days with no exit fees¹.

Cash ISAs. Instant access ISAs usually allow withdrawals with a standard variable rate of interest, and flexible ISAs allow money out and back in during the same tax year without re-counting towards the limit⁷. Skipton describes its Easy Access Cash ISA as allowing you to withdraw anytime¹⁵. RBS says you can take money out whenever you need it¹⁶.

Lifetime ISAs. The government's technical note says an account holder should usually be able to withdraw their savings and investments within 30 days of requesting them¹⁷. Withdrawals for reasons other than a qualifying one normally attract a withdrawal charge, though the legislation sets out exceptions, including payments to an invalid account, excess payments, properly levied fees or charges, a default event not attributable to the account investor, and amounts recouped¹⁸.

General investment accounts. Aegon says you can take regular withdrawals if needed and can access your money at any time¹⁹. Bestinvest says you can set up a regular withdrawal from your Investment Account or ISA over the phone²⁰.

Pensions. Pension withdrawals are different because of the tax treatment. Income drawdown charges can include fees on each additional withdrawal and tax on each additional withdrawal¹². Tax is deducted at your marginal rate, which is one reason the amount you receive can be less than the amount you requested.

Where the money cannot come out early. Abundance municipal investments are fixed term, so you cannot withdraw invested money early, although you can try to sell your investment²¹. Term deposit accounts at Capital Credit Union do not permit withdrawals, though the account can be closed early under exceptional circumstances with no interest paid²².

Where a withdrawal can be delayed or suspended

Several things can slow a withdrawal down or stop it altogether, and most of them are set out in your provider's terms.

• Investments must be sold first. If your account holds investments rather than cash, the provider sells enough to cover your request. Standard Life's Smoothed Return Pension Fund warns of a delay of up to 10 working days between the instruction and the actual transaction when switching out of or selling²³.
• Fund suspensions. If a fund holds units in or shares of a UK UCITS, recognised UCITS or non-UCITS retail scheme and dealings are suspended, the business period may be extended to 7 days after the end of the suspension²⁴. This is a rule designed to protect remaining investors when a fund cannot sell its assets quickly.
• Fixed term and notice accounts. Fixed rate savings accounts either permit no withdrawals during the fixed term, or permit them at the expense of a withdrawal penalty²⁵. Children's regular savings accounts usually limit the number of withdrawals you can make each year and restrict the amount of money you can pay in²⁶.
• Peer-to-peer investments. Which? warns that you could face waits of several months to withdraw your money from peer-to-peer platforms²⁷.
• Minimum balances. NS&I's Investment Account requires a minimum withdrawal of £1, and at least £1 must remain in the account to keep it open⁴.
• Payment account rules. Payment accounts with basic features must allow you to withdraw cash within the European Union in sterling or in the currency of the member state where the withdrawal is made²⁸.

What happens to your ISA allowance when you withdraw

This is the point that catches most people out. Money taken out of an ISA loses its tax-free status²⁹. If you pay it back into a different ISA, it counts towards your annual allowance³⁰. Several providers state this plainly: Santander says if you withdraw money from your ISA, it will lose its tax-efficient status³¹; Legal & General says withdrawing your money or closing your account will cause you to lose the ISA tax benefits in relation to the money withdrawn³².

The exception is a flexible ISA. TSB says flexible ISAs allow money out and back in during the same tax year without re-counting towards the limit⁷. If your ISA is not flexible, replacing withdrawn money uses fresh allowance.

There is an important difference between withdrawing and transferring. If you make the withdrawal yourself, the funds are no longer considered tax-free savings and can only be reinvested into an ISA as part of your current or future annual allowance³³. If you complete a formal ISA transfer instead, the tax-free status is kept³⁴. Leeds Building Society puts it simply: if you withdraw the funds and close the ISA, then pay those funds into another ISA, that will use your allowance, and this can also mean losing your tax-free status³⁵.

Abundance adds a further wrinkle for its Innovative Finance ISA: cash can be withdrawn free of charge, but invested money cannot be withdrawn because municipal investments are fixed term, and withdrawn money loses ISA status unless returned before the end of the tax year³⁶.

Why the amount you receive can differ from your account value

Several factors can make the money arriving in your bank smaller than the balance you saw on screen.

• Market movement. Investment returns are not guaranteed and the value of investments can fall as well as rise³⁷. If your holdings are sold a day or two after you request the withdrawal, the sale price may differ from the valuation you saw.
• Charges. Dealing charges, exit fees, urgent withdrawal fees and pension withdrawal fees are all deducted before the money is sent⁹.
• Tax. Pension withdrawals are taxed at your marginal rate, and Lifetime ISA withdrawals for non-qualifying reasons attract a withdrawal charge¹².
• Bonus effects. Help to Save is a savings product rather than an investment, but it illustrates the principle: withdrawing money could mean you are not able to earn a final bonus, depending on how much you withdraw and when³⁸.
• Interest adjustments. For some deposit accounts, an application to withdraw must be for the full balance including accrued interest not yet credited³⁹.

If your provider takes too long to pay out

Start by checking the timescale in your provider's terms. Some withdrawals legitimately take longer, for example when investments must be sold, when a fund is suspended, or when a large withdrawal triggers additional checks.

If your provider has missed its own published deadline, complain in writing and keep a record of when you submitted the instruction. If you are unhappy with the response, you can take the complaint to the Financial Ombudsman Service. MoneyHelper offers free, impartial guidance on your options⁶.

If you are closing an account after a terms change, you have up to 60 days from the day you were told about the changes to close it without giving notice or paying extra charges⁴⁰.

For withdrawals from a fixed term ISA, the money you withdraw or transfer to a non-ISA account loses its tax-free status, but an ISA transfer keeps it³⁴.