GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

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Early Withdrawal Penalty


Synonyms:premature takeout, service fee, withdrawal penalty
Filed Under: financial-banking, insurance, investments
Tags: banking, insurance, investment
 

Definition of early withdrawal penalty

early withdrawal penalty
1. A depositor forfeits interest or is assessed a service charge for withdrawing funds from or closing out a time deposit before its maturity date.

Related Terms and Acronyms:

  • maturity   The date when the principal balance of a loan is due and payable to the lender. Also, the date when a bond pays off its principal.
  • service charge (SC)   Fees charged to customers for specific services or as a penalty for not meeting certain requirements such as insufficient funds in a chequing account.
      ➥  Bank account transaction code.
  • time deposit   A type of deposit account with a stated maturity at which time the account reverts to another type of account or is "rolled over" for another fixed period of time.
  • withdrawal (WD)   Taking money out of a bank account or financial instrument.

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