If money is withdrawn before reaching age 59 1/2, there is also an early withdrawal penalty.

Any possible future return can be canceled out by early withdrawal penalties.

The concern comes if you need to access most of your deposit where you will have to pay an early withdrawal penalty.

Federal courts had also been in dispute over the tax treatment of these early withdrawal penalties.

There was some $128 million at stake nationwide, in 108 cases, involving the tax treatment of early withdrawal penalties.

Losing a fortune in early withdrawal penalties would defeat the whole point of the exercise.

Once you are over 59 , there are no withdrawal penalties.

The only thing they can do is close the account and take the early withdrawal penalty, which is 10 percent of the gains.

Federal regulations no longer require banks to charge an early withdrawal penalty.

However, there have been cases in which a credit union modified its early withdrawal penalty and made it retroactive on existing accounts.