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how exactly do mutual funds work?

my dad invested some mney in my name when I was a child into a mutual fund. It has since grown and I was wondering...can I take out some of that money and transfer it into my savings to buy a house? Or how does it work?? Do I wait till it liquidates?

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Asked by Owl_Feather at 2:59 PM on Jan. 11, 2011 in Money & Work

Level 22 (13,272 Credits)
Answers (2)
  • You really need to talk to the institution that is handling the mutual fund to see how it was set up. My mutual fund is an IRA and if I were to cash it out I would have to pay taxes and penalties, but not all mutual funds are alike and the only one who will know, is the finanicial institution it's at. You always have the option of accessing the money, but if there are penalties that might take 30% of the money, you may not want to go that route.

    Answer by slw123 at 3:43 PM on Jan. 11, 2011

  • Yes you probably can. If the money is tied up in a retirement account or an educational account, there will be penalties and taxes though.

    You will need to talk to your dad to see if the money is actually yours and how the account is set up.

    Answer by Erica_Smerica at 5:19 PM on Jan. 11, 2011

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