What is an interfund transfer?


Quick Answer

Interfund transfers are monetary exchanges within a personal or corporate account; these transfers involve adjusting the percentages of funds that individuals or entities hold in their accounts. Interfund transfers move money among all account funds. However, transfers exist in percentages only; these funds do not permit the exchange of exact dollars and do not allow the exchange of other types of money, say experts at Thrift Savings Plan.

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Full Answer

Customers may initiate interfund transfers to change the portion of proceeds allocated to all their funds. They might initiate an interfund transfer to give more weight to a high-performing fund and reduce the negative financial impact of weaker funds. These transfers take place among all types of funds within accounts, including Roth funds and funds exempt from taxes. Customers may initiate these transfers freely but face greater restrictions after carrying out two transfers within a month, say experts at Thrift Savings Plan. For the first two transactions, customers may redistribute money among all funds. Any additional interfund transfers within that month, however, limit customers to reallocating percentages only between two funds.

Despite carrying some restrictions, intertransfer funds provide customers with several benefits. Customers may move money freely among their funds without incurring financial penalties, such as making repayments. They may carry out these transactions online or in person, and establish interfund transfers as one-time or recurring actions.

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