What are the costs associated with early withdrawal?

Modified on Mon, 11 Dec, 2023 at 9:18 AM

Clients who choose to withdraw deposited funds associated with any given strategy-linked security prior to the maturity of that investment will be responsible for the early withdrawal trade closure costs associated with such early withdrawal, including but not limited to the prorated Wrap Fees, and trade closure costs associated with unwinding the strategy-linked security prior to maturity. Trade Closure Costs will vary based on the maturity term initially selected. The following table illustrates these costs for each term of maturity. These calculations are approximate, and the percentages associated with trade closure costs can vary depending on Federal Funds rate changes, what the rates are at the time of account opening, and subsequent purchase of a strategy-linked security.

The below examples are hypothetical and purely to illustrate the approximate trade closure costs associated with early withdrawal from an investment program:

Early withdrawal trade closure costs

(Approximate)

Wrap fee

(duration total, based on 20 bps per annum)

Program Duration in days

(Calendar Days

/ Leap year calendar days)

Early withdrawal trade closure calculation

(calculated on the value of the initial deposit)

Prorated Wrap fee calculation

(calculated on the greater of

1. The notional value of the investment or

2. the value of the initial deposit)

FedFundsRate + 50bps

0.2000%

365/366

[(FedFundsRate + 50 bps) * [Remaining Duration] / [Program Duration]

(20 bps/365 or 366 days * number of days since trade execution)

FedFundsRate + 75bps

0.4000%

730/731

[(FedFundsRate + 50 bps) * [Remaining Duration] / [ProgramDuration]

(20 bps/365 or 366 days * number of days since trade execution)

FedFundsRate + 100bps

1.0000%

1825/1827

[(FedFundsRate + 50bps) * [Remaining Duration] / [Program Duration]

(20 bps/365 or 366 days * number of days since trade execution)

You can also view an estimate of your potential early withdrawal costs in your Save App and Online Portal. To view a program's potential early withdrawal costs, log in to our account and head to the "Investments" tab. Here, you will see a list of your investments and the details associated with each, including investment date, term, maturity date, status, and more. To view the early withdrawal costs of a specific program, select the row of the active "Savings Program" you wish to view. After selection, click the "Closure" tab to see the "Early Closing Estimates" for that specific program.