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Traditional IRA

A Traditional IRA is easy to maintain and typically offers two important tax advantages. If you and/or your spouse do not participate in a retirement plan where you work, contributions are typically tax deductible. However, if you or your spouse participate in a retirement plan at work you may still be eligible for a full or partial deduction based on your tax filing status and income. Also, every penny of the earnings in a Traditional IRA is 100% free from federal income tax until withdrawn from the account.

Tax-deferred money grows quicker, so money will grow faster in a Traditional IRA.

Requirements

  • Minimum deposit to open account is $500.
  • Additional contributions to an existing CD must be a minimum of $50.
  • Transfers and rollovers will be deposited into a new CD.

Features

  • Interest will be compounded semiannually, except for certificates of less than one year or when monthly distributions are setup.
  • This account automatically renews at maturity.
  • Account holders age 59½ or older may adjust to a higher rate once in a calendar year.
  • Contributions can be made at any time into an existing IRA.
  • Contributions are limited to a specified dollar amount based on the tax year and if you are under or over age 50.

Distributions

  • Distributions can be made without bank or IRS penalty after the age of 59½ or with other qualifying conditions such as death or disability.
  • Distributions must begin by April 1 of the year after the year you turn 70½. The taxable portion of what you take out is taxed as ordinary income.

Competitive Edge

  • Contributions to Traditional IRAs can be made at any time to the rate locked in during the current term of the CD.
  • CD rates can be increased once during each calendar year for account holders after age 59½.
  • Penalty free distributions are permitted for account holders after age 59½ regardless of where the account is in the CD term.

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Roth IRA

Contributions to a Roth IRA are not deductible; however, if the funds are distributed in a "qualified distribution" they are not subject to federal income tax. Therefore, the earnings on the Roth IRA are generally tax-free.

Requirements

  • Minimum to open account is $500.
  • Additional contributions to an existing CD must be a minimum of $50.
  • Transfers and rollovers will be deposited into a new CD.

Features

  • Interest will be compounded semiannually, except for certificates of less than one year or when monthly distributions are set up.
  • Account automatically renews at maturity.
  • Money deposited into Roth IRAs is taxed in the year it is earned.
  • Contributions are limited to a specified dollar amount based on the tax year and if you are under or over age 50.

Distributions

  • Withdrawals of earnings for qualified distribution reasons after a five-year holding period are federal tax free and penalty free.
  • Distributions can be made after age 59½ without bank penalty.

Competitive Edge

  • Contributions to Roth IRA's can be made at any time during the term and will earn the same interest rate as the original deposit.
  • CD rates can be increased once during each calendar year for account holders after age 59½.

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