How to Take Money out of a Bond Fund
A bond mutual fund owns a portfolio of bonds, and investors in the fund own shares that are a proportional interest in the bond portfolio. Bond mutual funds pay out the interest earned on the portfolio as monthly dividends. If you have been reinvesting the bond fund dividends, you can switch the dividends to cash payments and receive a monthly income from your bond fund account. To sell or redeem shares, you must contact the mutual fund company.
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Instructions
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Determine how much of your bond fund account you want to redeem. You can pick a dollar amount or number of shares.
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Decide how you want to receive the proceeds from the fund redemption. The fund company can mail you a check or you can have the money electronically deposited in your bank account.
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Call the bond fund company using the customer service phone number on your account statement. Tell the customer service representative you want to redeem shares from your bond fund account.
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Tell the customer service representative how much of your bond fund account you want to redeem and how you want to receive the proceeds. The representative will verify you are the owner of the account and set up the redemption as you requested.
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Tips & Warnings
The share price for mutual fund redemptions is set at the end of the business day. Your share price will be the quoted price in the next day's financial news.
Mutual fund companies will only mail checks to the address they have on record for you or send the money to a bank account in your name. This prevents another person from getting money from your bond account.
Redeeming shares of your bond fund is a taxable event and you will have to declare a capital gain or loss on your income tax return. You will need the amount you received from selling the shares and the cost of the shares when they were purchased.
