One of the most common charges that brokers face is of being slow when it comes to honoring traders withdrawal requests. It is true that the process of depositing money in your account is a much easier than the one you will face when trying to withdraw it. As a consequence brokers are often charged with scamming their clients when it comes to the binary options withdrawal process.
However is this accusation justified or is there more to understand about withdrawing your funds from your account than is first apparent?
Depositing funds into your new binary options account is the easy part. Brokers readily accept a wide range of a payment types and will process your deposit in an instant. You can deposit money into your account via bank cards (credit/ debit), bank wire and an increasing number of third party payment providers. Think funding your account with Paypal, Skrill, Neteller etc.
In many instances, particularly if you are a new client for the broker, you can even earn a new deposit bonus to swell your account. Everything looks good at the start.
So depositing money is easy. This is because in order to deposit funds, you will have already been vetted by your bank or payment processor. You will also need cleared money in your account in order to make your deposit. The risk for the broker is therefore minimal.
The problems start when it comes to withdrawing your money.
Traders of binary options come from all parts of the world and make use of a wide variety of different deposit options. Because of the demographic differences it is no surprise that laws regarding withdrawals vary. In particular the potential for fraud and ‘money laundering’ is high when money is moved between different geographical regions. This is why brokers are often so stringent in releasing funds.
When it comes to making your first withdrawal you are likely to need to provide your broker with additional proof of your identify. This most likely will be in the form of a copy of your driving licence, passport or bank details. In short, the broker is seeking to verify that you are who you claim you are before it releases funds.
Commonly accepted form of identification include:
- Official picture ID such as a copy of your Passport or driving license
- Proof of Address from official documentation such as a bank statement or utility bill
- Copy of the front and back of your credit card showing the last 4 digits (if used)
While providing this information may seem obstructive, think about it. If your bank card was stolen would you be happy for your broker to release funds to your card without first seeking to identify who you were? Of course not. You would want the broker to take steps to avoid such a scenario happening.
Regulated brokers in particular work to strict anti-money laundering guidelines. They have to stick to strict regulatory guidelines and therefore to some extent their hands are tied. While supplying this additional information may seem a bind, it is in short, done for your security and benefit.
Most brokers limit withdrawal requests so that it is only possible to withdraw funds back to the same method that was used for the deposit. So for example, if you deposit via your credit card, don’t be surprised if you are limited to withdrawing your funds back to the same card.
If is also worth noting that some withdrawal requests can be limited to set amounts. This includes both lower and higher limits. For example, brokers will frequently only process requests in excess of say $100. They may also place an upper limit as to what can be withdrawn via a bank card and be more generous on the amount you can withdraw via wire transfer.
Traders of more modest means should not worry. However if you are planning on trading substantial amounts in your binary options account then you should check these limits to avoid potential problems later down the line.
As we have already noted funding your binary options account can be near instant. However withdrawing from your account takes time. Even when once you have provided your proof of ID, the time between the submission of your request and the money actually turning up in your account can be a number of days.
There are of course reasons for this. The broker may take a few days to process your request through their administration department. Processing withdrawals is unlikely to be a high priority as they will benefit from holding your money on account. That said, regulated brokers have to operate within guidelines, though don’t expect them to look at your request as a priority just because you do.
If you are making wire transfers, also expect your bank to add to the time taken to complete the process. Transfers between international banks takes time, in spite of the advent of electronic payments. Here again, holding on to your money for as long as possible is beneficial for financial institutions.
Overall the binary options withdrawal process can be expected to take 3 to five business days to complete. However it pays to know what to expect up front so that it does not come as a surprise. You can then plan your withdrawals and finances accordingly.