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 Also, every penny of the earnings in a Traditional IRA is 100% free from federal income tax until withdrawn from the account.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.
  • Contributions can be made at any time into an existing IRA at the current rate.
  • 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 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 during the term and will earn the same interest rate as the original deposit until the end of the 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.

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 until the end of the term.

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