Automatic Withdrawal

Automatic withdrawal - An automatic withdrawal is mutual funds program where the investor chooses to have fixed payments from the holdings in his or her mutual fund holdings. These payments are usually taken out on a monthly or quarterly basis. The automatic payment will come from the dividends, short-term capital gains, and the income on any securities, which the fund would be holding for the investor. An exception to the fixed payments given out monthly or quarterly is that any capital gain on long-term securities which the fund is holding can only be paid out an a yearly basis once those capital gains have been realized.