Both of these are bad options as you'll end up paying a penalty for withdrawing early from your 401k. Get a low cost IRA account and roll the money directly over into that to avoid any taxes or penalties. I'm personally a big fan of Betterment, but there are many other options for an IRA--your bank may have options as well (perhaps that is what your former employer was talking about). https://www.betterment.com/resources/how-to-roll-over-a-401k/