Individual Retirement Accounts
Individual Retirement Accounts or IRAs are a way for individuals
to save for retirement. Choose from a full range of IRAs with
competitive rates and flexible options. Transfer your current IRA
or rollover your 401(k) from your employer or prior employer to the
bank you know and trust.
- Minimum balance of $250
- $10 annual maintenance fee
- Interest paid quarterly
- Early withdrawal penalties and tax penalties may apply
- Deposits allowed at any time (subject to approval and must be
within IRS guidelines)
The money put into a Traditional IRA may be tax deductible and
the account grows tax deferred. At the age of 59½ the funds can be
used without penalty. Early withdrawals (prior to age 59½) are
taxable and incur 10% premature-distribution penalty fee to the
IRS. At the age of 70½ you are required to start taking minimum
distributions from the account and contributions are no longer
allowed. Tax deductible contributions may be subject to income
taxes upon withdrawal.
The money put into a Roth IRA is not tax deductible but it does
grow tax free. Certain distributions after 5 years are tax free.
You can start withdrawing the funds at the age of 59½ without
penalty and you are never required to withdraw the money. Early
withdrawals (prior to age 59½) are taxable and incur 10%
premature-distribution penalty fee to the IRS.
A SEP or a Simplified Employer Plan is an IRA established by an
employer on behalf of an employee. Each year, the employer can
contribute a certain percentage of each eligible employee's
compensation directly to the employee's traditional IRA. A SEP IRA
gets all the same great tax benefits as a Traditional IRA.
The CESA or Coverdell Education Savings Account is a
nondeductible account that qualifies for tax-free withdrawals for a
child's education expenses-children younger than 18 years old.
Earnings grow tax-free when used for qualified education expenses,
including private elementary and secondary schooling, and higher
education through a vocational school, college or university.
Contact a Personal Banker for current interest rate
Consult your tax advisor or financial planner for more