How to Get Money Out of Your Stash Account

Accessing funds from your Stash account involves a process that varies depending on the account type. This guide outlines the procedures for withdrawing money from your Stash accounts and highlights key tax considerations.

Understanding Your Stash Accounts

Stash offers various account types, each designed for different financial goals, which influences how money is held and subsequently withdrawn. The primary accounts relevant for holding and accessing funds include Stash Invest, Stash Retirement, and Stash Banking. Stash Invest functions as a taxable brokerage account, where your money is typically held in investments like stocks and exchange-traded funds (ETFs). Stash Retirement accounts consist of Traditional IRAs and Roth IRAs, which are tax-advantaged accounts intended for long-term savings for retirement. These accounts have specific rules regarding withdrawals due to their tax benefits. Lastly, the Stash Banking account operates like a traditional checking account, holding readily available cash. The nature of each account dictates whether you are transferring cash, selling investments, or initiating a distribution.

Initiating a Withdrawal from Stash

Before initiating any withdrawal, ensure you have a linked external bank account, as this is where your funds will be transferred. You can link an external bank account through the Stash platform, which may involve instant verification or manual verification that takes several business days. Once your external account is linked, the withdrawal process differs based on your Stash account type.

For funds held within your Stash Invest (taxable brokerage) account, you must first sell your investments to convert them into cash. After selling, the funds from these sales typically take one to two business days to settle before they become available for withdrawal. Once settled, you can then transfer the cash to your linked external bank account, which usually takes an additional one to three business days to appear. Stash generally allows transfers with a minimum of $1, and standard transfers do not incur direct fees from Stash.

Withdrawing from a Stash Retirement account, such as a Traditional or Roth IRA, involves initiating a distribution request within the Stash platform. Since these accounts hold investments, you will also need to sell your holdings first, with the sales settling in one to three business days. After settlement, the funds can be sent to your linked bank account, a process that typically takes three to five business days. It is important to note that retirement account withdrawals often require acknowledgment of potential tax implications and penalties, which will be discussed further.

For money in your Stash Banking account, the process is generally simpler as it holds readily available cash. You can transfer funds directly to your linked external bank account, with transfers usually completing within one to three business days. Alternatively, you can access funds via ATM withdrawals using your Stash debit card, with a typical daily limit of up to $1,000. Some out-of-network ATMs may charge a fee, and Stash itself may charge a $2.50 fee for out-of-network ATM use. For faster access, Stash offers “instant transfers” from your banking account to a linked debit card for a 1% fee, with funds typically arriving within minutes.

Tax Considerations for Withdrawals

Understanding the tax implications of withdrawals is crucial, as different Stash account types have distinct tax treatments.

For withdrawals from a Stash Invest (taxable brokerage) account, any profits realized from selling investments are subject to capital gains tax. If you held the investment for one year or less, the gains are considered short-term capital gains and are taxed at your ordinary income tax rate. If held for more than one year, they are long-term capital gains, which typically qualify for lower tax rates. The original principal amount invested is not taxed upon withdrawal. You will generally receive IRS Form 1099-B, “Proceeds From Broker and Barter Exchange Transactions,” to report these sales for tax purposes.

Withdrawals from Stash Retirement accounts carry specific tax rules designed to encourage long-term savings. For a Traditional IRA, distributions are generally taxed as ordinary income in retirement. If you withdraw money before reaching age 59½, the distribution is typically subject to a 10% early withdrawal penalty, in addition to being taxed as ordinary income, unless an IRS-recognized exception applies. Common exceptions include withdrawals for qualified higher education expenses, unreimbursed medical expenses exceeding a certain percentage of adjusted gross income, or up to $10,000 for a first-time home purchase.

For a Roth IRA, qualified withdrawals are entirely tax-free and penalty-free. A withdrawal is considered qualified if the account has been open for at least five years and the account holder is age 59½ or older, is disabled, or is using the funds for a qualified first-time home purchase (up to $10,000 lifetime limit). If a Roth IRA withdrawal is non-qualified, the earnings portion may be subject to income tax and the 10% early withdrawal penalty. For both Traditional and Roth IRAs, you will receive IRS Form 1099-R, “Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts,” to report distributions. Withdrawals from your Stash Banking account are generally not taxable, as this account holds funds on which taxes have already been paid.